Principles for Reforming Capacity Markets to Meet State and Customer Clean Energy Goals

The existing capacity market constructs in PJM, ISO-NE, and NYISO do not account for state commitments and customer preferences for renewable or no-carbon resources, or the declining costs of advanced energy technologies. Indeed, existing capacity market rules can prevent or hamper clean energy-producing resources from clearing in the capacity market and counting toward resource adequacy needs. The result is a problematic and increasingly costly trend of divorcing the procurement of capacity to address resource adequacy needs from the procurement of clean energy needed to meet state and consumer demands. As clean energy demands continue to grow, this status quo will not be sustainable.