Day-Ahead Ancillary Services Initiative (DASI) - Procure and price services required for a reliable operating plan in the Day-Ahead Energy Market

Sep 4, 2026

Day-Ahead Ancillary Services Initiative (DASI) proposal outlines how ISO-NE will procure and price ancillary service capabilities to support a reliable next-day operating plan for evolving generation. The presentation covers reliability needs satisfied through day-ahead market clearing and discusses DASI go-live timing considerations for Dec 1, 2024 to Mar 31, 2025. It provides impact assessment on other ISO markets and estimates E&AS cost and revenue changes tied to the FRM sunset.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages47

Reading Time1 h 58 min

AccessFree to download

Day-Ahead Ancillary Services Initiative (DASI)

DASI go-live date considerations

DASI impact assessment

Impact of the FRM sunset on E&AS costs/revenues

DASI’s impacts on DA NCPC

N E P O O L M A R K E T S C O M M I T T E E | M A Y 9 , 2 0 2 3 | W E S T B O R O U G H , M A Day-Ahead Ancillary Services Initiative (DASI) Procure and price services required for a reliable operating plan in the Day-Ahead Energy Market Ben Ewing Andrew Withers P R I N C I P A L A N A L Y S T E C O N O M I S T ISO-NE PUBLIC 1 | | WMPP ID: 162 | | --- | --- | | Proposed Effective Date: March 1, 2025 | | • With DASI, the ISO seeks to procure and price the ancillary service capabilities needed to meet real-time energy demand and deliver a reliable, next-day operating plan with an evolving generation fleet – With DASI, these reliability requirements will be satisfied within the clearing of the day-ahead market (DAM) • Today’s discussion includes: – Continued discussion of DASI impact assessment – Initial discussion of Tariff language ISO-NE PUBLIC 2 DASI go-live date considerations • Window of consideration: Dec 1, 2024 – Mar 31, 2025 • Implementing DASI midway through a winter season is not preferable – Participants have expressed a desire to gain experience with the design prior to periods with higher potential for stressed conditions • The DASI implementation is expected to be a significant effort – Allowing additional time to be dedicated to this work will help to ensure that it is successful • The proposed March 1, 2025 go-live date balances these considerations – With this go-live date, the final Forward Reserve Procurement Period will be October 1, 2024 – February 28, 2025 ISO-NE PUBLIC 3 DASI IMPACT ASSESSMENT ISO-NE PUBLIC 4 • We provide indicative estimates of DASI’s impact on other ISO markets – Forward Reserve Market (FRM) – Net Commitment Period Compensation (NCPC) – Estimate of total impact on E&AS costs – Forward Capacity Market (FCM) • Appendix includes responses to stakeholder requests following April MC – Provide estimate of how DASI may impact residential retail rates – Impact of a $10 strike price adder on DA A/S risk premiums – Share detailed, hourly clearing and pricing data from DASI simulations used to estimate cost impacts ISO-NE PUBLIC 5 IMPACT OF THE FRM SUNSET ON E&AS COSTS/REVENUES ISO-NE PUBLIC 6 • ISO proposes a planned Tariff effective date for DASI of March 1, 2025. The last Forward Reserve Procurement Period will end on Feb 28, 2025 • To assess the impacts of eliminating the FRM as part of DASI, we provide estimates of the following E&AS cost changes that occur because of the FRM sunset: – Elimination of FRM payments (TMNSR and TMOR credits): This tends to decrease E&AS costs/revenues – Elimination of FRM penalties (Failure to Reserve and Failure to Activate penalties): This tends to increase E&AS costs/revenues • Potential changes to RT costs are not accounted for in our methodology, as they are expected to be small relative to the change in FRM payments and would be difficult to estimate ISO-NE PUBLIC 7 • For the IA study period (2019 – 2021), the removal of the FRM would have reduced annual E&AS cost by $26.4 million, on average (data source: 2021 IMM AMR, Figure 7-10) – FRM penalty rates are proportional to FRM payment rates – Historically, FRM penalties tend to be much smaller than FRM payments . For this reason, eliminating the FRM tends to reduce costs ISO-NE PUBLIC 8 • Using publicly available information on Forward Reserve Auction clearing and pricing outcomes, estimate cost reduction associated with FRM sunset in 2022 and 2023 – In 2022, estimate total FRM credits equal to $66.1 million and penalties* equal to $2.8 million, for estimated cost reduction of $63.3 million – For first nine months of 2023, estimate FRM credits equal to $94.4 million and penalties* equal to $4.0 million, for estimated cost reduction of $90.4 million – If observed auction clearing outcomes in 2022 – 2023 persisted through 2025, then the FRM sunset would reduce E&AS costs in the range of $60- $1

FAQs

What is DASI intended to achieve in the day-ahead market?

DASI enables ISO-NE to procure and price the ancillary service capabilities needed to meet real-time energy demand and deliver a reliable next-day operating plan through day-ahead market clearing.

Why is March 1, 2025 proposed as the DASI go-live date?

The proposal balances a consideration window from Dec 1, 2024 to Mar 31, 2025 and avoids implementing mid-winter, while allowing participants time to gain design experience before stressed conditions.

How does the FRM sunset affect E&AS costs and revenues in the methodology?

The assessment estimates that eliminating FRM payments tends to decrease E&AS costs/revenues, while eliminating FRM penalties tends to increase them; the approach does not account for potential RT cost changes.

Sep 4, 2026

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