By Alex Lawton

We all appreciate the idea of squeezing out every last drop and making the most out of what you have. Our power grid should be no exception.

Yet in New England, rules governing how new resources connect to the regional grid limit full use of our system’s potential. Precious “surplus” capacity can and should be leveraged to interconnect new, low-cost clean energy technologies to deliver more reliable, affordable power.

Capacity surplus interconnection service (SIS) is a solution hiding in plain sight that would allow the region to harness more capacity resources. At its core, reforming capacity SIS is about optimizing every megawatt of deliverability at each point of generator interconnection.

Throughout the system, there often is a discrepancy between how much capacity a generator is allowed to offer to the grid (i.e. an interconnection service limitation) versus how much they’ve committed to actually offer via the capacity market, i.e., the “capacity surplus.”

Optimizing SIS could solve several problems for grid operators and policymakers amidst soaring electricity costs, rising demand, shifts in the resource mix and heightened emphasis on grid reliability. A reformed capacity SIS option would allow new capacity resources to interconnect to the system in a fraction of the time and at much lower cost, which has significant benefits for consumer bills. Interconnection historically has been protracted, expensive and risky for new generation and storage projects, adding to the cost to develop projects that customers pay for through rates.

SIS circumvents these problems because it allows new capacity resources to bypass long and expensive reliability studies if they are willing to respect the existing capacity limitations at the point of interconnection. Respecting these limits also ensures these new resources avoid costly system upgrades.

This more efficient path to connect to the grid will lower development costs and benefit ratepayers through bringing more capacity resources online faster to balance supply and demand. More capacity also supports resource adequacy and improves system reliability, keeping the lights on.

Other regions already have revitalized their capacity SIS rules to capitalize on these benefits. For instance, surplus reforms in MISO allow greater flexibility and speed for generators requesting surplus whilst ensuring that interconnection limitations are respected. As a result, MISO’s surplus process has garnered 3.6 GW of surplus service requests since 2021.

While capacity SIS technically is available in New England, outdated rules make it practically unusable for generators and prevent the region from harnessing capacity SIS opportunities. These barriers can be addressed with relatively modest revisions.

The first core issue is a restrictive condition that capacity resources must be “continuously available” on a permanent basis, which is impractical because it locks in a fixed quantity of surplus when in fact surplus availability constantly ebbs and flows based on performance audits as well as capacity accreditation. The fix: allow surplus resources the option for dynamic, periodic service.

Correcting capacity SIS deficiencies is timely specifically because of how it relates to capacity accreditation. ISO-NE is undertaking a major overhaul of its capacity market, including transitioning to a prompt and seasonal market and adopting a probabilistic approach to accredit resources based on their marginal value.

This new approach to capacity accreditation means accredited values may change significantly over time. As more renewables and advanced energy technologies enter the market, and as legacy plants receive derates for their imperfect performances during extreme weather events, accreditation values for many resources will drop. The key implication is that over time, the less capacity each generator can actually commit via their accredited limit, the more surplus headroom will open since the interconnection service limit — what generators are allowed to offer — stays the same. Ensuring capacity SIS rules are tied to accreditation reforms therefore will allow maximum use of surplus capacity on a continuous basis as accreditation values evolve.

The second core issue for surplus concerns what happens if an original generator retires, leaving just a surplus unit at the point of interconnection. Instead of allowing the surplus unit to maintain the interconnection limitation that applied to the original generator, which would enable the surplus unit to scale to that size, and avoid interconnection pitfalls, surplus units must go to the back of the line in the interconnection queue, with few exceptions.

Given the rising trend in generator retirements, a streamlined repowering process that allows surplus units to take over the interconnection rights in full and quickly begin injecting power into the grid could prove critical to maintaining electric system reliability.

In New England alone, the grid has the potential to unlock roughly 35 GW of new resources via surplus service — an amount higher than our region’s all-time peak demand. While that may be a high-end estimate, consider that according to the ISO’s 2025 CELT Report, there already is roughly 3 GW of capacity headroom on the system during winter time.

Once capacity accreditation reforms take effect in 2028, if results are similar to the previous impact analysis, approximately seven additional gigawatts suddenly could become available for the capacity commitment period in 2028.

Timing capacity SIS reforms now would dovetail with ongoing market reforms and address the urgent need for efficient new capacity resource entry. Recognizing this, industry stakeholders in New England have pushed capacity SIS reforms as a top priority for 2026.

This is a great opportunity for ISO-NE to follow through on the commitment it made in its FERC Order 2023 filing transmittal letter, promising to advance discussions on further interconnection reforms and measures that accelerate timelines.

The onus is on the ISO to undertake the initiative, gather stakeholder perspectives, and update its governing documents accordingly. If the ISO pursues these changes, New England’s grid has the opportunity to squeeze every last drop of surplus capacity to make the most out of our existing grid.

Alex Lawton is the wholesale markets director at Advanced Energy United.