Ayotte Demands Action On ISO-NE Screw Up Sending Electricity Rates Soaring

By Michael Graham, NH Journal

Granite State energy experts have long complained that New Hampshire gets a raw deal from ISO-New England, the grid that serves all six states in the region.

Some Republicans have even suggested that the state consider leaving the regional grid to get off the hook for subsidizing other states.

Now, Gov. Kelly Ayotte has entered the fray.

On Tuesday, she announced she’s taking aim at a little-known change in New England’s electricity market that she says is driving up costs for Granite State ratepayers. And, perhaps not intentionally, she’s reminding ratepayers about the long-running problem of New Hampshire underwriting the rest of the region’s energy policies.

In a March 16 letter to ISO New England’s Board of Directors, Ayotte called for urgent reforms to the grid operator’s new “Day-Ahead Ancillary Services” (DA A/S) market, warning it has already added hundreds of millions of dollars in unexpected costs.

“Electric bills are through the roof, and New Hampshire families and businesses shouldn’t bear these unnecessary additional costs,” Ayotte said in a statement. “New England’s electric system needs to be reliable and affordable, and it must be reformed immediately to lower costs for Granite Staters.”

According to ISO-NE’s Internal Market Monitor, the new system has added approximately $921 million in costs across New England since its implementation in March 2025, far exceeding the roughly $140 million annual increase originally projected.

Ayotte said those overruns — roughly $8.58 per megawatt-hour of electricity — represent about nine percent of the total value of the region’s energy and ancillary services market.

“The unprecedented cost increases … are imposing substantial and unanticipated burdens on electricity consumers across New England, including those in New Hampshire,” Ayotte wrote. “New Hampshire’s consumers should not be expected to shoulder unnecessary costs.”

Ancillary services are essentially the electric grid’s insurance policy: backup power, reserves, and fast-response resources that keep the system stable when demand spikes or power plants fail.

In March 2025, ISO-NE made a major change in how those services are purchased.

Instead of buying electricity first and securing backup later, the new system requires grid operators to procure both power and reliability services together in the day-ahead market, effectively paying generators in advance to be ready.

Supporters say the change was designed to improve reliability in a grid increasingly dependent on intermittent renewable energy like wind and solar.

But critics say the redesign has resulted in overpaying for that “insurance.”

Rep. Michael Vose (R-Epping), chair of the New Hampshire House Science, Technology and Energy Committee, said while the concept makes sense, the execution has been costly.

“The new system basically creates a financial contract that pays power plants ahead of time to be ready. If real-time prices spike, settlements adjust (like insurance payouts), so generators earn money for being available, and customers ultimately pay for that reliability,” Vose explained.

“But the system design had some flaws that caused an overpayment for this insurance. The bottom line is that the new system switched to a smarter insurance system, but accidentally set the premiums way too high. The governor is asking them to fix it.”

Ayotte is urging ISO-NE to quickly adopt recommended changes from the Internal Market Monitor, including adjustments to pricing formulas and forecasting requirements that critics say are inflating costs.

She also called for swift action through the Federal Energy Regulatory Commission to implement those reforms.

The dispute over ancillary services is the latest flashpoint in what many Granite State policymakers see as a longstanding problem: New Hampshire paying more than its fair share under ISO-NE policies.

A recent regional study found that New England’s broader energy policies — particularly aggressive decarbonization mandates — could drive massive cost increases in the coming decades, with electricity rates potentially doubling and total regional costs reaching $815 billion by 2050.

At the same time, the report found New Hampshire’s more market-driven approach, including continued reliance on natural gas and fewer electrification mandates, actually lowers costs for the entire region.

“New Hampshire’s energy policies produce substantial benefits for the entire ISO-NE region,” the study concluded, estimating that those policies could save New England $56.5 billion over time.

That dynamic — where New Hampshire provides reliability benefits while facing rising costs — is fueling frustration among state leaders.

ISO-NE has defended its market changes as necessary to maintain grid reliability as the region transitions away from fossil fuels.

But Ayotte says the current system is failing to strike the right balance.

“New England’s electricity system must remain both reliable and affordable,” she wrote. “In its current form, (the ancillary services market) is falling short of that responsibility.”

Ayotte has made lowering electric costs a central focus of her administration. Earlier this month, her nominee to chair the New Hampshire Public Utilities Commission, Chris Ellms, was confirmed with affordability as a top priority.

She has also directed the state Department of Energy to explore next-generation nuclear power as a long-term solution.

Jared Chicoine, commissioner of the New Hampshire Department of Energy, supports Ayotte’s actions.

“At a time when the challenges of affordability couldn’t be clearer, Gov. Ayotte is calling for quick action by ISO New England to reform a program that has not lived up to the needs of New Hampshire ratepayers.

“The New Hampshire Department of Energy will work with ISO New England to ensure that a reliable grid is also an affordable one.”

This story was originally published by the NH Journal, an online news publication dedicated to providing fair, unbiased reporting on, and analysis of, political news of interest to New Hampshire. For more stories from the NH Journal, visit NHJournal.com.