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The New England electric power market is seeing sharply rising capacity costs and energy volatility. More than 4200 MW of non-gas generating capacity (oil- and coal-fired, as well as two nuclear plants) have been retired or are scheduled for retirement. The region’s wholesale electricity market values have risen and fallen due to changes in both electricity demand and fuel costs for the remaining generation fleet. And the loss of generating capacity is being reflected in rising capacity prices--elevated values that could be with us for the next 10 to 15 years.

All is not lost, though. Organizations can offset energy price volatility and rising capacity prices by participating in various ISO-NE Forward Capacity Market Load Response programs--a collaboration of options providing financial opportunities for electricity users to appropriately manage down total energy spend by incorporating avoided cost of offset strategies. Both active demand resources (like the practice of powering down machines or switching to an on-site generator) and passive demand resources (like energy efficiency measures and distributed generation) can help offset or fully mitigate the impact of rising energy costs.

This white paper by CPower’s Bill Cratty explores the factors behind the increasing cost of electricity, and the many programs available to New England customers--Real-Time Demand Response, On-Peak Hours, Price Responsive Demand, Capacity Tag Management, and more--that can help them earn year-round capacity payments, event energy payments, and savings from reduced capacity charges.