ISO-NE proposes that new data centers of 50 MW or more bring their own new capacity to get firm service

New England's grid operator and its transmission owners want new data centers and other customers drawing 50 MW or more to line up new capacity before they can get firm transmission service, under rules due at federal regulators by Nov. 16.

ISO New England laid out the plan in an information summary last updated on Oct. 9. "To address resource adequacy concerns, the ISO will put Eligible Customers on notice that large loads must 'bring your own new capacity,'" the summary says.

The proposal answers a June 18 order from the Federal Energy Regulatory Commission, which made a preliminary finding that ISO-NE's tariff "appears to be unjust and unreasonable" because it lacks clear rules for studying transmission service for large loads within 60 to 90 days. It also ordered a report on "how ISO-NE intends to ensure that adequate generation will be available to serve existing and new large loads." In August, FERC granted ISO-NE and the transmission owners a 90-day pause in the case so they could write their own tariff changes.

Under the proposed definition, a Large Load is a commercial or industrial customer at a single site with gross peak demand of 50 MW or more that connects to the transmission system at more than 60 kV. Existing loads are exempt and certain critical loads excluded.

The trigger for existing loads is still moving. The Oct. 9 summary says an existing large load would come under the rules after an increase of 5 MW or more in gross peak demand. Materials ISO-NE has since posted for a meeting on Wednesday, Oct. 14, of NEPOOL's transmission, markets and reliability committees propose raising that, "based on stakeholder feedback and a review of proposals in other regions," so a load is covered only when its peak rises by 50 MW or more above its exempt demand. Exempt demand would be the higher of a load's peak hourly draw in the 10 years before June 18, 2026, or the amount in its existing agreements.

Large loads would choose from three new transmission services. Firm Contract Demand Service gives a load the same priority as other network load, up to a fixed contracted amount. To get it, the customer must designate "sufficient new capacity resources," and all network upgrades must be finished. Until then, the load can take Interim Contract Demand Service, a temporary non-firm service lasting up to seven years or until needed upgrades are in service, whichever is longer. Non-Firm Contract Demand Service is permanent and credits a load's flexibility to reduce the upgrades needed to connect it.

All or part of a load on the two non-firm services would be dispatched down when the wholesale price at its location exceeds $250/MWh. The summary's opening says large loads will be left out of the region's Installed Capacity Requirement, but its settlement section and a Sept. 15 ISO-NE presentation limit that to the two non-firm services. Those loads are "excluded from the Installed Capacity Requirement (ICR) and from capacity cost allocation, because they are re-dispatched prior to a Capacity Scarcity Condition," the presentation says.

Large loads also could not net on-site generation against their demand. The summary sets "a netting threshold of 0 MW for Large Loads to prevent cost shifting."

Applications would carry a $50,000 non-refundable fee, a $150,000 study deposit and a readiness deposit of $10,000/MW. ISO-NE would study applications one at a time, finishing each in 90 days unless more analysis is needed. The application and study process would start June 1, 2027. The Oct. 14 materials say the new transmission services would start June 1, 2028.

Under exemption rules ISO-NE presented in September, loads already operating or sufficiently under construction would be exempt from the study procedures and the bring-your-own-capacity requirement. Loads that have signed a study agreement would skip the new study procedures but would still have to meet the capacity requirement. The Oct. 14 materials say a project counts as sufficiently under construction only if, by June 18, 2026, it had received major permits, reached financial close, ordered major equipment and shown evidence of construction on site.

NEPOOL committees are scheduled to vote on the tariff changes on Nov. 3, and its Participants Committee on the full proposal on Nov. 12.

ISO-NE's summary is dated the same day FERC ruled on a PJM Interconnection plan that also asked new large loads to bring new capacity. The commission accepted PJM's 50 MW large-load definition and a registry of those loads but rejected the rest of the filing as one package, including PJM's Interim Resource Adequacy Service. That service would have let PJM, in shortfall years, direct local utilities to cut load attributable to new large loads in their zones unless it was offset by new capacity. FERC found that several provisions "appear to place obligations directly on Eligible New Large Loads, which are, for the most part, retail customers," and that the compensation terms appeared to set a retail rate, both outside its authority.

FERC separately found that PJM had not justified a central piece of its bring-your-own-capacity rules, which locked in the capacity rating of a customer's new resources at the level from the first auction they cleared. PJM "has not sufficiently demonstrated that the potential benefits of locking in BYONC resources' capacity accreditation outweigh PJM's obligation to ensure that the PJM Region's resource adequacy needs are met," the order said.

ISO-NE's posted materials do not mention the PJM order.