ACEG said the reforms are starting to improve outcomes in several regions, but rising demand from data centers, manufacturing and electrification are increasing the cost of delay, especially where planning processes remain incremental or reactive.
“Progress is real, but it’s uneven — and demand growth means delay now carries real costs for customers,” ACEG Executive Director Christina Hayes said in a statement. “Where regions have embraced proactive, long-term planning, we’re seeing better results. Where planning remains fragmented, reliability risks and costs increasingly show up in household electricity bills.”
Grades assess performance at the regional level and do not assign responsibility to single institutions, instead reflecting the collective actions of utilities, regional planning organizations, states and other stakeholders. To earn top grades, regions must adopt proactive, long-term, scenario-based planning that evaluates multiple system benefits, integrates regional and interregional needs, and delivers transmission at the pace required to meet rising demand.
CAISO, MISO and SPP continue to show the benefits of proactive, long-term regional planning. SPP’s Coordinated Planning Process, once approved by FERC, would be an important reform that merges transmission planning and generator interconnection planning, the report said.
ISO-NE, NYISO and PJM have shown meaningful improvement due to FERC Order 1920 compliance filings and greater engagement with states.
ERCOT got a C, with the report highlighting the Permian Basin Reliability plan to electrify oil and gas drilling and data centers, which was released in July 2024 with options for 345-Kv and a 765-Kv portfolio. The Texas PUC picked the 765-Kv option in April 2025. While Texas has seen plenty of transmission planned, the report noted it still is done in a “siloed” style, which kept it from a higher grade.
Many regions — including all the non-RTO regions — “continue to face significant gaps in both regional and interregional planning frameworks,” the report said, “In these regions, transmission development often occurs through individual utility investments or ad hoc coordination rather than durable, region-scale planning processes, limiting the ability to fully capture systemwide benefits.”
The West, which is split into three regions, is meeting under the Western Transmission Expansion Coalition (WestTEC), a voluntary interregional planning process that the report called “one of the best interregional transmission planning practices in the country.”
The first report card from ACEG came out in 2023 and ranked the regions before Order 1920 was issued, while the second one from 2024 did not change the grades and checked in after that order. Now, the report takes the requirements from Order 1920 and adds a new focus on interregional transmission.
Load growth forecasts have changed significantly since the last report, with Grid Strategies’ summary of nationwide, five-year peak load forecasts going from 24 GW three years ago to 150 GW in its most recent update. Load growth is affecting transmission development, with FERC saying it was the main driver for 1,000 miles of new facilities in 2024.
“While today’s load growth can tempt a crisis‑response mindset focused solely on short‑term fixes, the industry must move beyond ad hoc solutions and embrace long‑term regional and interregional planning,” the report said. “Proactive, holistic long‑term planning that also accommodates near‑term needs has proven to deliver the lowest costs to consumers. It captures economies of scale that ‘just‑in‑time’ projects miss and enables high‑capacity upgrades to come online ahead of demand.”
The report looked at interregional planning and gave the country an overall “C-minus” that reflects continued reliance on voluntary coordination rather than a formal requirement for regions to implement interregional planning best practices capable of finding the highest value projects.
“The takeaway is not that nothing is working,” Hayes said. “Transmission planning works when it’s proactive, coordinated and long term. The challenge now is scaling those successes fast enough — across and between regions — to keep electricity affordable and reliable for all Americans as demand continues to grow.”
Under the agreement, I&M will shift its focus from building several new natural gas plants to generation sourced by a mix of gas plants, power purchase agreements, wind, solar and battery storage. The plan also highlights a proposal to develop a virtual power plant program that would allow customers to connect their personal generation to the grid.
I&M says the plan is necessary due since electricity demand is expected to double from 2025 to 2030.
New Orleans City Council Bans Data Center Development for 1 Year
The New Orleans City Council voted unanimously to ban the construction of data centers in the city for one year.
The special meeting to consider the future of data center development projects was called shortly after news broke about a proposed data center in New Orleans East. The ban period will provide the council with time to define data centers and devise a way to effectively prohibit them.
Hours after the council meeting concluded, the developer behind the New Orleans East project pulled his zoning permit.
The Environment and Natural Resources Committee voted 8-4 to advance a proposal that would establish a superfund for large fossil fuel companies to pay for infrastructure repairs, resiliency efforts and other costs in communities disproportionately affected by flooding and other disasters.
It would cost about $4 million to fully implement the program. Additional staff would also be required, though the exact number would depend on the specific plan.
State Further Behind on Emissions Goal than Expected
Modeling done by the University of Maryland’s Center for Global Sustainability indicates the state is not on track to meet its mandated 60% reduction in greenhouse gas emissions by 2031.
The data suggest state and federal policies currently on the books will reduce globe-warming emissions only 42% from 2006 levels. The same group of researchers predicted in 2023 that the state would reduce its carbon emissions 50% by 2031 — still shy of the 60% goal set by law, but better than the new estimate.
In a statement, the Department of the Environment said it still has five years to “make smart decisions, do the right thing and take advantage of technological advances.”
Utilities Back off Plan to Charge Customers Interest on Bill Reductions
National Grid and Eversource, the state’s largest gas and electric companies, said they will forgo all interest on the bill reductions requested by Gov. Maura Healey. Berkshire Gas and Unitil agreed to do the same.
Healey requested the utilities shave customer bills by 10% in February and March amid a second winter of sky-high heating charges and was frustrated the companies had planned to collect interest. Initially, the companies said they would forgive two months of interest but planned to collect the remaining deferred charges with interest up to the prime rate of 6.75%.
Consumers Energy Proposes Storage Project on Former Coal Site
The Hampton Township Planning Commission will review a special use permit request from Consumers Energy for a battery energy storage system at the site of the former Weadock coal-fired generation facility.
The $70 million Weadock Battery Energy Storage System would occupy approximately 5 acres and would include a 45-MW storage facility with 36 lithium iron phosphate batteries. The township is already home to part of an 80-MW solar farm on Consumers Energy property.
The commission will hold a public hearing Feb. 12.
The House of Representatives voted 62-5 to advance a measure that would ask voters to restrict eminent domain in a state constitutional amendment.
The legislation asks voters to approve an amendment clarifying eminent domain “may not be exercised for the purpose of transferring private property to a non-governmental entity solely to promote economic development or increase tax revenue without the provision of a public use.” The measure would not ban eminent domain completely.
If the Senate approves the measure, it will go to voters in the Nov. 3 general election.
Bill to Boost Local Approvals of Solar Projects Advances
The Senate voted 21-17 to advance a bill that would set up a framework for siting solar projects that localities could follow and prohibit the premature rejection of development.
The bill is not a mandate for localities to approve projects, but it would keep them from outright barring the projects from even applying for permits. Localities would still be able to approve or withhold permits.
EnergySolutions, the company that owns the decommissioned Kewaunee Power Station, said it plans to bring nuclear power generation back to the site.
EnergySolutions submitted a notice of intent to the Nuclear Regulatory Commission on Jan. 15, confirming plans to file for major licensing action for new nuclear power generation at the Kewaunee plant site by June 2028. The plant closed in 2013 and began major dismantlement in 2022.
If the site comes back online, it would be one of only two nuclear facilities in Wisconsin and the first to open since 1974.
Dominion Energy’s $11.2 billion Coastal Virginia Offshore Wind project off Virginia Beach’s coast reached a major milestone on Jan. 21 with the installation of the first turbine.
The tower was installed less than a week after the utility won a preliminary injunction in federal court, allowing it to resume construction on the project.
TerraForm Power, an affiliate of Brookfield Asset Management, announced the acquisition of a 1.56-GW solar project in Illinois from its original developer, Hexagon Energy.
The Steward Creek Solar project recently sealed a 600-MW interconnection agreement between TerraForm, Commonwealth Edison and PJM.
The United States officially left the Paris Agreement – for a second time – on Jan. 27, becoming the only country in the world to abandon the international commitment to slow global warming.
The departure from the climate accord comes one year after President Donald Trump signed an executive order to begin the process of withdrawal.
The U.S. is currently the planet’s second largest climate polluter after China.
FERC authorized Transcontinental Gas Pipe Line Company to proceed with its Southeast Supply Enhancement Project, a major expansion of its existing interstate natural gas transmission system spanning Virginia, North Carolina, South Carolina, Georgia and Alabama.
The order grants Transco authority to construct and operate approximately 55 miles of new large-diameter pipeline, along with significant compressor station upgrades and related facilities.
FERC staff concluded that while construction and operation would result in some environmental impacts, the effects would be reduced to less-than-significant levels with mitigation measures in place.
The U.S. District Court for the District of Massachusetts ruled the Department of Energy violated the law when it formed the Climate Working Group.
The court issued a judgment that said the creation of the group, which is comprised of five climate change skeptics, violated the law that governs how federal advisory committees work. The Environmental Defense Fund and Union of Concerned Scientists sued the DOE in 2025 for convening the working group without public meetings or notice.
BOSTON — While there is near-universal recognition that New England will need to add a significant amount of new generation over the next two decades, conflicting political and market forces have created major uncertainty about what the next wave of generation projects will look like.
This uncertainty extends to how the region will spur the development needed to meet demand growth, several speakers said at a Northeast Energy and Commerce Association conference on power markets in Boston on Jan. 29.
The scale of the need could be substantial: ISO-NE forecasts peak load roughly doubling by 2050, and decarbonization would require additional clean energy to replace much of the existing fossil fuel fleet.
Incentivizing new generation solely through the wholesale markets may be a difficult proposition. Although energy affordability has dominated policy discussions over the past year, wholesale market prices had remained relatively low until the past two months, which have brought a major increase in energy costs due to sustained cold weather. (See Cold Weather Drives Record December Energy Costs in New England.)
Dan Dolan, president of the New England Power Generators Association, said there has been a “dramatic disconnect” between consumer costs and wholesale market prices. For generators relying on capacity and energy revenues, “if anything, there’s a revenue crisis.”
With consumer prices already high, the increased energy and capacity prices needed to spur new development could lead to political backlash and caps on market prices.
This dynamic has occurred in PJM, where “we’re just now seeing these markets shifting from being long on capacity to being more at equilibrium,” said Ben Griffiths of NRG Energy. “It’s not clear that the prices that [power developers] would require to bring in new entry are actually politically feasible.”
If market prices alone are not enough to bring new generation online, the New England states could assume an even larger role in the procurement of new generation and capacity. But continued reliance on state power procurements would bring its own set of difficulties.
Connecticut’s 10-year power purchase agreement with the Millstone nuclear plant has demonstrated some of these challenges. The difficulty of reconciling PPA costs through rates has led to major swings in the monthly costs to consumers, and Connecticut officials have been pushing for other states to shoulder some of the plant’s costs after the current contract expires in 2029.
Griffiths noted that former ISO-NE CEO Gordon van Welie had pushed the states to take on a larger role in capacity procurement through bilateral contracting.
He added that the region could consider capacity market changes aimed at increasing revenue certainty, such as altering the demand curve to stabilize prices or reintroducing some version of a price lock for new capacity.
But he expressed skepticism about the long-term sustainability of the proposal by the PJM state governors and the White House’s National Energy Dominance Council for a one-time “backstop” auction to procure 15-year contracts with new capacity resources. (See Government-proposed ‘Backstop’ Auction to Test PJM Stakeholder Process.)
“It doesn’t feel long-term sustainable to have bifurcated markets that are providing the same benefits in real time,” Griffiths said, adding that he is “increasingly skeptical of the approach of trying to move all the money out of the capacity market.”
Bob Ethier, current PJM board member and former vice president of system planning at ISO-NE, stressed the need for longer-term solutions to high costs.
“The tension that I see is that there are times where we can do things in the short term that will lower bills but will hurt the market’s functioning in the long run,” he said, emphasizing the importance of maintaining long-term entry and exit signals in the market.
Multiyear price locks for capacity could help reduce year-to-year price volatility, he said, adding that states may be better situated to pursue this strategy than RTOs. He emphasized the need to have these conversations prior to price spikes.
Once a crisis hits, like in PJM, “all we can do is ride [it] out, tweak things around the edges and hopefully learn from it for the next one.”
Policy Pickles
Conflicting objectives between federal and state policies have also added significant challenges and uncertainty to resource development, several speakers said.
“We’re in a pickle in the region for what we can build and what is a sound investment,” said Matt Nelson, principal at Apex Analytics and former chair of the Massachusetts Department of Public Utilities. “We’ve lost some tailwinds and are picking up a lot of headwinds when it comes to clean energy policy.”
Despite the load growth projections and increased demand over the past two years, there is a relatively small amount of generation in the ISO-NE interconnection queue. The first iteration of the Order 2023 cluster study process, initiated by ISO-NE in October, includes 5,632 MW of storage, 355 MW of solar and the 1,200-MW SouthCoast Wind project, which faces considerable challenges from the Trump administration. (See Storage Projects Dominate ISO-NE Transitional Cluster Study.)
Nelson said each new resource category has its own drawbacks: New gas generation seems unlikely with the region’s winter gas constraints and grid’s current “overreliance” on gas; new nuclear looks to be at least 10 years out; the federal government appears to have taken offshore wind off the table; and large-scale solar development faces questions about the loss of federal incentives and a potential capacity revenue hit from ISO-NE’s proposed accreditation changes.
To address load growth amid so much uncertainty about sources of new development, the region must build consensus around a cohesive plan, Nelson said. He added that distributed solar and storage may play an increasingly large role over the next few years.
“State programs are about the only thing left where clean energy resources can get an incentive,” he said.
Aaron Lang, a lawyer focused on clean energy development at firm Foley Hoag, said renewable developers are dealing with “a mountain of uncertainty” related to tariff policy and other potential state and federal policy changes over the past year.
“The pressure is really on the states to do a lot of stuff,” he added, while expressing some optimism about Massachusetts’ efforts to establish a new consolidated permitting and siting process for clean energy resources.
The new process stems from climate and energy legislation passed by the state in 2024. Under the new rules, developers must apply for consolidated state and municipal permits, with the permitting review process limited to 15 months for large projects and 12 months for smaller projects.
The law requires the state to promulgate final regulations by March 1. The state plans to start processing projects through the new process in July.
While there may be some short-term “bumps in the road,” the new process should provide long-term benefits for resource development, he said. “The idea of a consolidated permit is an excellent idea.”
Consumer Cost Drivers
Over the past couple years, New England has seen electricity prices rise faster than inflation, though the inflation-adjusted rate of increase has been relatively modest for most of the region, said Todd Schatzki, principal at the Analysis Group. When accounting for use and rates, customer costs have fallen since 2010 but have risen since 2020, he said.
He emphasized that the cost increases are not felt equally by all customers, with larger impacts on residential customers who have not seen wage growth in line with inflation.
Sandy Grace, vice president of U.S. policy and regulatory strategy at National Grid, presented a cost breakdown of a typical Massachusetts residential electric bill for November. The main cost categories were energy supply (41.3%), distribution (21.4%), transmission (14.9%), energy efficiency (7.6%), net metering (4.6%) and utility fixed charges (4.4%).
Example electric bill for a National Grid residential customer in Massachusetts | National Grid
“It really does require a partnership across sectors to address these costs,” she said.
Rhode Island Public Utilities Commission Chair Ron Gerwatowski focused much of his remarks on the rise of transmission rates in the region.
Asset condition spending, or investment to address degradation of existing transmission infrastructure, has risen significantly in recent years and makes up the bulk of new regionalized transmission spending in ISO-NE. The rising costs, coupled with the limited regulatory scrutiny the spending receives, has prompted efforts to establish internal asset condition review capabilities at ISO-NE.
While this role would not be a regulatory entity, it would be intended to increase transparency into projects and provide information that could be used by third parties to challenge project costs with FERC.
“Quite frankly, it may not be enough,” Gerwatowski said. “We need the transmission owners to temper their appetite for investment in asset condition projects.”
If transmission owners do not scale back their spending, the states may be forced to try to step in and do it for them, he said, noting that states “still control both the method and the timing” of how transmission rates are recovered.
Instead of allowing the quick recovery of transmission spending as pass-through costs, the states could require the recovery of transmission costs through the full base rate case process, he said.
Introducing regulatory lag “could give the financial folks an incentive to push back” on asset condition spending, he said.
If state regulators have little or no confidence in the asset condition planning and development process, he added, “What other options do we have?”
American Electric Power and Springdale Energy will pay ReliabilityFirst a combined $180,000 in penalties for violations of NERC’s reliability standards, according to settlements between the regional entity and the utilities approved by FERC.
NERC submitted the settlements Dec. 30, 2025, in its monthly spreadsheet notice of penalty, along with a separate nonpublic SNOP regarding violations of NERC’s Critical Infrastructure Protection standards (NP26-3). FERC indicated in a Jan. 29 filing that it would not further review the SNOPs, leaving the penalties intact.
AEP’s settlement, carrying a $150,000 penalty, concerned PROC-026-1 (Relay performance during stable power swings), which was in effect from 2018 to 2024. The standard has been replaced by PRC-026-2, but the violation by two AEP subsidiaries, Ohio Power and Indiana Michigan Power, occurred while the earlier version was in effect, according to a self-report submitted by the utility in October 2022.
According to the settlement, PJM notified AEP in December 2020 that it had added the utility’s 765-kV Sorenson-Marysville line to its list of elements covered by PRC-026-1. Requirement R2 of the standard says a transmission owner must ensure the load-responsive protective relay settings on a transmission line meet the criteria in the standard within 12 months of being notified of the line’s inclusion.
The Sorenson substation is owned by Indiana Michigan Power, while the Marysville substation is owned by Ohio Power, and both are managed by separate engineers. While the engineer overseeing the Marysville facility reviewed the line relays within the 12-month period, the Sorenson facility’s manager did not review its relays until August 2022, about eight months after the deadline. Two of the relays were found to be out of compliance and require adjustment.
RF determined the root causes of the violation were “ineffective internal controls and workflow tools to ensure evaluations were completed in compliance with PRC-026-1,” the RE wrote in the SNOP. AEP had flagged the Sorenson relays within its tracking system, but no one was assigned to complete the evaluation and no follow-up notifications were issued to ensure completion.
RF also observed a lack of coordination between AEP’s subsidiaries, with the engineer from Indiana Michigan incorrectly assuming Ohio Power’s engineer would complete the evaluations on the Sorenson facility as well as the one in Marysville.
The RE assessed the violation as posing a moderate risk to grid reliability: greater than minimal because an extra-high voltage line was affected, the evaluation was late and the relays eventually were found to be noncompliant; but not serious or substantial because of the “limited scope of the noncompliance.” RF acknowledged that AEP performed an extent of condition review across the footprint of all its operating companies and found no other instances of noncompliance with PRC-026-1 R2.
AEP’s mitigation activities included performing the required evaluations of the Sorenson-Marysville line, along with the extent of condition review and creating a unified process for evaluating relays for PRC-026 compliance. The utility also updated its tracking system to specify the due date, estimated completion date and personnel assigned to each task.
Vendor Failed to Ensure Springdale’s Compliance
Springdale’s settlement stemmed from a violation of PRC-025-2 (Generator relay loadability). The utility notified RF in August 2022 that it was in violation of requirement R1 of the standard, which requires generator owners to apply the appropriate settings to their load-responsive protective relays “while maintaining reliable fault protection.”
RF observed that Springdale’s violation “was a continuation of a prior noncompliance” that the utility had failed to fully mitigate. Springdale reported the initial noncompliance in February 2020, telling the RE that it had failed to ensure the correct relay settings on three of its five generating units. To mitigate the issue, the utility hired a vendor to update the relay settings.
A month later, the vendor reported it had completed the updates; based on this report, Springdale reported to RF that mitigation was complete. However, when the utility retained a new vendor to review relay settings two years later, the second vendor discovered the settings still were not in compliance.
Springdale launched an investigation into the original vendor, which reported that “the technician who performed the work had properly changed” one relay’s settings but had incorrectly changed another. Six relays were affected by the oversight. The original vendor returned to fix the error in May 2022, but the second vendor reported in June that one of the units still was not compliant, affecting two relays. These finally were brought into compliance in November 2022.
RF determined that the root cause of the second noncompliance was vendor oversight, because the utility did not validate that settings changes had been implemented correctly. The RE assessed the violation as a moderate risk, observing that although the noncompliance lasted more than three years and the size of the settings changes increased the risk of an unnecessary trip, the limitation to three of five generating units “somewhat” reduced the potential magnitude of harm. The earlier violation did not constitute a reason to aggravate the penalty, RF added.
Springdale’s mitigation efforts included updating its vendor contracts to require engineering review of changes within 48 hours and vendor draft reports within 30 days after completion of work. The utility also implemented a vendor quality assurance process to ensure Springdale staff review the vendors’ work, and a requirement that the NERC compliance manager review the vendor draft report to check that it includes all necessary information to demonstrate compliance.
CAISO released its first mandatory report under the California assembly bill that paves the way for an independent regional organization to assume responsibility over the ISO’s energy markets.
Under AB 825, CAISO must submit an annual report to the California governor and Legislature about the ISO’s various initiatives and decisions. Gov. Gavin Newsom signed the law in September 2025, and CAISO submitted the first report to the Legislature on Feb. 1, according to a news release.
“The ISO appreciates the commitment by Gov. Newsom and the Legislature to support independent governance of the real-time and day-ahead regional electricity markets that benefit consumers across the West,” CAISO CEO Elliot Mainzer said in a statement. “We look forward to continuing to work with the state and stakeholders throughout the region to help make that new governance framework a reality.”
AB 825 allows for the creation of an independent organization to oversee CAISO’s Western Energy Imbalance Market and soon-to-be-launched Extended Day-Ahead Market. The bill authorizes CAISO and California’s investor-owned utilities to join the organization.
In the AB 825 report, CAISO listed activities from the past year, including federal tariff proceedings, policy initiatives, decisions, market activity and transmission planning.
The report lists suggested enhancements to congestion revenue rights, initiatives to address reliability needs and uncertainties between the day-ahead and real-time market, new resource adequacy rules, storage enhancements and greenhouse gas coordination, among other initiatives.
CAISO also is working to “extend participation in the day-ahead market to the [WEIM] entities in a framework similar to the existing WEIM approach for the real-time market. EDAM will improve market efficiency by integrating renewable resources using day-ahead unit commitment and scheduling across a larger geographic area,” according to the report.
The report notes that CAISO intends to seek approval from its Board of Governors for its 2025/26 transmission plan in May 2026.
Under the 2024/25 transmission plan, CAISO received approval for 31 projects valued at $4.8 billion, 28 of which are for reliability purposes for $4.6 billion. The ISO estimated it needs 76 GW of additional capacity to meet increasing building electrification and electric vehicle loads. (See CAISO Approves $4.8B Transmission Plan to Support 76 GW of New Capacity.)
NYISO began what is expected to be a yearlong effort of revising its Reliability Planning Process at a Transmission Planning Advisory Subcommittee meeting Jan. 20.
“This is the best opportunity, if you have more concrete feedback, especially any specific suggestions so that we can consider those as we consider revisions before we roll them out,” said Ross Altman, NYISO’s senior manager of reliability planning.
The existing process uses a single base case to determine whether the transmission system meets all reliability criteria. Base case assumptions are identified in May, finalized over the summer and voted on in fall. The final reliability need assessment is issued in late fall. This goes hand-in-hand with the Comprehensive Reliability Plan (CRP), which considers system conditions a decade into the future.
“The only specific feedback we’ve received so far to process revisions is to consider a longer horizon,” Altman said. “There was a suggestion of 15 years. We welcome folks’ thoughts on that.”
Altman said the use of base case means the ISO needs to use the most conservative assumptions to account for growing uncertainty across all elements of grid planning. (See NYISO’s 2026 to be Dominated by Reliability Concerns.) The use of a single base case when reliability margins are tight can mean “flip flopping” between having and not having a reliability need.
Several stakeholders said they were concerned with moving away from a single base case to multiple base cases or scenarios that might trigger a reliability need. Representing Multiple Intervenors, Mike Meager asked Altman to clarify how the ISO would weigh different scenarios or circumstances probabilistically.
Altman said it was difficult this early in the process for the ISO to come up with a “true stochastic” look at probabilities.
“Not declaring needs on outliers is something we’re thinking about how to accomplish,” Altman said.
He said the process must maintain that reliability needs be based on criteria, and he added that multiple combinations of system conditions could more accurately reflect the changing grid. He stressed that the ISO was committed to “open and transparent” stakeholder involvement in revising the process.
The ISO is planning to review key study assumptions for the 2026 reliability needs assessment study with a particular focus on load uncertainty, aging generation, emergency assistance and generator outage rates.
Howard Fromer of Bayonne Energy Center asked how the ISO planned to stick to a 10-year planning horizon for the CRP, given that it was planning on folding multiple forecasts into the reliability process.
“How do we prevent that flexibility you’re looking for from swamping the competitive market, which is what we designed to achieve whatever our reliability requirements are?” Fromer asked.
Altman said that was always a risk when using a decadelong planning horizon for a one-year market. He suggested that the issue be separated from short-term reliability needs planning.
Fromer replied that it deserved consideration because the ISO could force a lot of unnecessary infrastructure investment.
Another stakeholder asked whether NYISO would consider changing some of its base case inclusion rules to be more realistic rather than conservative. Meager said he agreed and wanted the ISO to seriously consider how realistic its assumptions are.
“It’s not difficult to show some reliability criteria will be violated … if there’s no bounds or restrictions or constraints on what assumptions the NYISO can pick and choose to use each year,” Meager said.
Altman replied that the ISO is indeed considering the issue.
Alex Novicki, representing Avangrid, requested that extreme weather events be accounted for in the base case because, he said, NERC was going to try to account for them in upcoming resource adequacy standards.
Meager also questioned the ISO’s timeline for potential changes.
“What you are contemplating are some of the most significant changes to the Reliability Planning Process we have ever considered, with huge impacts moving forward,” Meager said. “There’s not a lot of meat on the bones before us right now. The idea that we’d be voting on tariff changes in a couple months is incredibly ambitious, if not highly unlikely.”
New York generators had to rely on oil as gas was scarce throughout the Eastern Interconnection during the Jan. 25-27 winter storm, NYISOsaid in a preliminary analysis that was a last-minute addition to the Installed Capacity Working Group’s agenda Feb. 2.
“We wanted to be timely and at least talk about some high-level stuff about what happened last week for folks so we could at least level-set some of the conversation,” said Shaun Johnson, NYISO vice president of market structures.
While the storm, dubbed “Fern” by the Weather Channel, caused few disruptions in the Northeast, it had such a large footprint that it affected demand and prices across the East.
“For those of you who are upstate New York natives, last week’s weather was cold, but it wasn’t extreme New York cold,” Johnson said. “The really important part of this is that it was cold in Atlanta.”
The weather created high demand for natural gas, causing price spikes that rippled through the market. Downstate generators had difficulty obtaining natural gas at all. Index prices during the winter storm were in the $50 to $200/MMBtu range, with some spot quotes in excess of $300. Average prices typically are much lower, with Johnson citing October 2025’s average of $2.17/MMBtu as an example.
Dual-fuel units shifted to trucked-in oil, which is less efficient than piped gas. Simultaneously, snow on solar panels and overcast conditions prevented solar resources from shaving down the peak load.
“During the first two days of Fern, we went through 20% of our oil inventory in New York,” Johnson said. He said the ISO ran its fuel survey multiple times over the week and heard stories of oil-fired generators being continuously served by caravans of tanker trucks “running out the gate” the entire week.
Johnson opened a map of the U.S. from the National Oceanic and Atmospheric Administration that showed the entirety of New England, New York and most of the PJM footprint under an extreme cold advisory. Cold weather extended southward into Tennessee Valley Authority and SPP territory. Effectively, the entire eastern half of the U.S. was in a state of elevated natural gas and electricity demand.
Johnson cited the NYISO 2025 Gold Book forecast of 24,200 MW of peak load in winter. He said the ISO had come close to that several days the previous week. He displayed a graph of day-ahead peak load forecasts during Fern that plateaued just under the Gold Book forecast for several days.
Additionally, several emergency actions were taken to reduce demand. The Special Case Resource program was activated multiple hours daily Jan. 25 to Jan. 30.
External prices also were extremely high, making it impossible to stabilize prices with cheap imports, Johnson said.
For most of the electrical industry’s history, weather was a constraint we designed around. Climate, by contrast, now is a system we operate inside of: a wild, unstable system.
That distinction matters more than many grid leaders, regulators and policymakers have absorbed. Extreme heat, wildfires, intense rain, drought and sea level rise often are approached as separate hazards — each deserving its own planning docket, modeling exercise or capital program. And while this column just completed a series on the impact of each hazard on the grid, they are not a collection of independent risks; they are a tightly coupled system of climate-driven stresses that interact, compound and persist in ways the grid never was built to handle.
Climate risk no longer is an environmental problem. It’s a governance, planning and management problem. And it sits squarely on the desks of utility executives, system operators and policymakers.
From Discrete Events to Systemic Risk
The industry knows how to deal with events. We respond to heat waves, storms, fires and floods when they occur individually. Mutual assistance is activated, crews are staged, emergency declarations are issued and restoration begins.
Climate change has turned those events into conditions.
Dej Knuckey
Heat no longer is a single-day peak but a multiday, multinight stress that simultaneously drives record demand, reduces generation efficiency and lowers transmission capacity. Drought is not just a hydroelectric issue; it constrains thermal cooling, increases wildfire risk and exposes weaknesses in the water-energy nexus. Wildfires are not seasonal hazards but year-round threats with cascading impacts on air quality, solar output, worker safety and liability exposure. Extreme rainfall doesn’t merely knock down lines; it floods substations, undermines foundations and complicates recovery logistics. Sea level rise isn’t a future storm-surge problem; it’s a slow, permanent redrawing of where infrastructure can safely exist.
Taken together, these risks do not stack neatly. They collide.
A heat dome can arrive during a drought, elevating fire risk. Fires strip vegetation, increasing the likelihood of debris flows and flash flooding when rain eventually comes. Flooded substations disrupt power to water systems just when pumping capacity is needed most. Smoke degrades solar output and limits air operations for line inspections. Each stress amplifies the next.
We can’t plan for each hazard in isolation.
Polycrisis, Meet Multisolving
Two terms I keep coming back to as I consider how the industry will manage in a future in which uncertainty is the norm are polycrisis and multisolving.
The term “polycrisis” was coined by French complexity theorists in the early 1990s and popularized in the early 2020s as the planet struggled with a pandemic, climate change, wars and economic instability. Climate change interacts with energy sources, generation, transmission and distribution infrastructure and the safety, well-being and economic stability of residential and commercial customers. It interacts with other critical infrastructure systems that both depend on and support the grid. And this is happening against a backdrop of income inequality, declining health outcomes, population migration and unstable federal emergency management support. Climate is not a single crisis for the grid.
“Multisolving” was coined by Dr. Elizabeth Sawin and focuses on the positive flipside of the coin: solving for one problem can solve for others. Think of it as the BOGO of the solutions crowd. For the grid, building resilience against one extreme challenge comes with the bonus of creating resilience against others, with a further ripple effect of improving reliability and lowering corporate exposure. Similarly, decarbonizing the grid with renewables and energy storage comes with the bonus of lowering exposure to fuel prices, increasing grid stability and improving the health of communities near power generation.
They are both linked to unintended consequences: polycrisis in a negative sense where one challenge results in multiple, compounding challenges; multisolving in a positive sense where one solution solves more than one challenge.
Grid Resilience in the Time of Climate Change
Most grid planning frameworks still assume three things that no longer hold: historical climate baselines, independent hazards and short disruption durations.
Reserve margins, resource adequacy models and integrated resource plans often are still calibrated to yesterday’s weather. Reliability metrics reward fast restoration after discrete outages, not the ability to avoid catastrophic system failure during prolonged, overlapping stresses. Yesterday’s n-1 contingency planning won’t work when climate delivers n-many failures simultaneously.
The problem isn’t a lack of data. Climate science has advanced rapidly, and hazard modeling is more sophisticated than ever, assuming inputs and assumptions are adjusted for today’s reality. The problem is institutional inertia: Planning processes and regulatory structures have not evolved at the same pace as the risk landscape.
The industry needs to focus on correlation risk. Heat waves reduce solar efficiency at the same time demand peaks. Wildfire smoke causes “wiggling” in photovoltaic output while also limiting crew deployment. Flooding disrupts electricity, communications and transportation at once. These interactions are predictable and need to be built into planning assumptions.
This planning needs to be done against a backdrop of rapidly accelerating risk. The creators of the First Street Correlated Risk Model found, “the frequency of losses resulting from major climate disasters in the U.S. has increased over fivefold in the past four decades, with climate change and increased development in vulnerable areas being the primary drivers.”
And there’s no one-solution-fits-all. Existing adaptation approaches typically assume rather simplified models, an IEEE study found. “The reality, however, is that climate change patterns and the uncertainties they introduce can differ regionally, complicating the formulation of effective countermeasures.”
As climate hazards become more frequent, more extreme and more varied, the industry can’t afford to rely on plans that appear robust on paper but are brittle in practice. The industry must invest in comprehensive planning and prioritize infrastructure upgrades that address multiple risks.
Climate Risk Has Become a Balance-Sheet Issue
The most underappreciated shift may be financial rather than technical.
Climate exposure is reshaping utility balance sheets. Wildfire liability has driven bankruptcies and forced restructuring, insurance providers are retreating from high-risk regions or sharply raising premiums, and credit rating agencies are flagging climate exposure as a material risk. Capital costs are rising fastest for utilities with the greatest climate vulnerability, often the same utilities facing the largest infrastructure reinvestment needs.
In effect, climate risk is becoming a de facto regulator, often acting faster and more bluntly than public utility commissions.
This matters because resilience investments too often are framed as discretionary or extraordinary: nice to have if regulators approve, deferrable if rates are politically sensitive. But in reality, failing to invest in resilience now simply shifts costs forward, where they reappear as higher borrowing costs, insurance gaps, emergency repairs and, ultimately, customer harm.
Swiss-Re Institute, which studies the risk landscape closely — because reinsurance companies are the ones pricing the growing risk — said, “Ongoing risk assessment is necessary to ascertain how resilient infrastructure is. Assets that are poorly maintained are more vulnerable.”
Conversely, today’s resilience investments can pay dividends beyond repairing and preparing for the same risk. Think about the $1 billion, four-year Con Edison storm fortification initiative following Superstorm Sandy: It was triggered by outages following a storm surge, but is paying dividends as the utility faces ice storms, heat waves and more.
Executives who treat climate adaptation as an environmental compliance issue are misreading how quickly financial markets are moving.
No Utility is an Island
Another lesson emerging across climate hazards is that grid resilience cannot be built in isolation. Power outages cascade. They shut down water pumping and wastewater treatment. They cripple communications networks. They undermine emergency response and health care delivery. During fires and floods alike, loss of electricity turns manageable crises into life-threatening ones.
Yet in many states, energy planning remains siloed from water utilities, emergency management agencies, transportation departments and telecom providers.
Cross-infrastructure coordination can’t be ad hoc or occur only after a disaster. Integrated planning and response reduce both risk and cost. If infrastructure needs to be protected from rising sea levels, for example, it’ll be more cost effective if all affected agencies coordinate resilience investments, hardening power, water, wastewater treatment and roads simultaneously.
At the same time, a region may be more of an island than ever before: If multiple states face an event at the same time, like the winter storm that recently shut down a solid slice of the lower 48, mutual aid agreements break down as crews are needed locally and flying in distant crews becomes impossible. Mutual aid is ideal, but some disasters will be more Lord of the Flies than Swiss Family Robinson.
Resilience is not something the power sector can buy on its own. It is an interdependent system, and governance structures have to reflect that reality.
What a Climate-adjusted Grid Strategy Actually Looks Like
If climate risk is now a core management challenge, what follows is not a checklist of projects but a shift in mindset.
First, resilience must move beyond asset hardening toward system flexibility. Hardening substations and elevating or undergrounding equipment remain necessary, but they are insufficient on their own. Islandable microgrids, distributed energy storage and modular recovery strategies allow systems to absorb shocks rather than simply resist them. Flexibility — not brute strength — is what enables systems to function under compound stress.
Second, planning must explicitly account for duration. Multiday heat waves, weeks of wildfire smoke, yearslong droughts and permanent sea-level rise pose fundamentally different challenges than short, sharp events. Planning processes that focus on peak hours or single-day extremes underestimate both operational strain and human fatigue.
Third, we must align incentives with future conditions. Regulators play a critical role here: Cost-recovery frameworks still favor post-event rebuilding over preemptive adaptation, even though avoided outages and avoided disasters deliver far greater public value. Utilities, for their part, need to treat resilience as a core dimension of service quality — not a regulatory add-on.
Planning for grid resilience requires a comprehensive framework such as the one developed by NARUC | NARUC
Fourth, reliability metrics need updating. Measures that prioritize restoration speed after outages do little to encourage investments that prevent catastrophic failure in the first place. In a climate-altered grid, success increasingly looks like outages that never happen, liabilities that never materialize and emergencies that never escalate.
Leadership in a Non-Stationary World
The grid already is operating inside a climate-stressed environment. The question facing leaders and policymakers is not whether the lights can be kept on during the next storm, it is whether governance structures, planning tools and investment frameworks can evolve fast enough to manage permanent instability.
That evolution will be uneven. Some utilities and system operators are already internalizing climate risk as a core design constraint. Others remain trapped in a compliance mindset, waiting for clearer regulatory signals or the next disaster, legal action or insolvency to force action.
The future of our industry will not be defined by how cheaply it delivers electrons, but by how well it absorbs shock, and that can happen only if leaders treat climate risk as the multidimensional management challenge it has become.
