The $921M Number: How DASI Costs Exploded
When ISO-NE designed DASI and filed it with FERC, the projected incremental cost was approximately $140 million per year. The actual result after one year is $921 million — driven by:
- Extreme winter severity: Winter 2025/2026 was the coldest in 20 years, driving record gas-fired generation demand. The co-optimized market amplified price coupling between energy and reserves.
- Reserve scarcity pricing: DASI’s co-optimization triggered reserve constraint penalty factors far more frequently than modeled. December 2025 and January 2026 costs alone exceeded the entire annual projection.
- Structural gas dependency: ~50% of New England generation is gas-fired, with constrained pipeline capacity. When gas supply tightens, both energy AND reserve prices spike simultaneously under DASI.
Governor Ayotte’s Political Escalation
New Hampshire Governor Kelly Ayotte has taken the most aggressive stance of any New England governor, calling for:
- Immediate DASI market rule changes to reduce the cost burden on ratepayers
- House Bill 690 (signed July 2025): A year-long study into whether New Hampshire should withdraw from the ISO-NE grid entirely to protect ratepayers from costs driven by other states’ environmental policies
- Rejection of cross-subsidy: Ayotte argues NH ratepayers are paying for reliability costs driven disproportionately by Massachusetts and Connecticut clean energy mandates under the CLCPA
While a full NH withdrawal from ISO-NE is unlikely in the near term, the political pressure accelerates the timeline for FERC-filed reforms. ISO-NE has acknowledged the overrun and committed to filing reform proposals by summer 2026.
What This Means for Commercial Buyers
- Immediate cost impact: DASI-related charges are now a material incremental line item on New England commercial bills. Treat the 20-40% ancillary-service impact range as scenario guidance until ISO-NE and FERC filings clarify the reform path.
- Contract review urgency: Supply contracts with “regulatory change” clauses may allow mid-term repricing. Review terms with your provider immediately.
- Reform timeline: ISO-NE plans a FERC filing by summer 2026. If approved, relief could arrive by late 2026 or early 2027, but the $921M already incurred will be absorbed by ratepayers.
- NH businesses: The grid withdrawal study creates regulatory uncertainty unique to NH. Monitor HB 690 study progress — a withdrawal recommendation (however unlikely) would fundamentally restructure NH electricity markets.
- Demand response: DASI’s co-optimization increases the value of flexible load during reserve scarcity events. C&I facilities with curtailable capacity should explore expanded DR participation.
Source: ISO New England; Governor Kelly Ayotte press statements; InDepthNH; NH Journal; Tradition Energy Market Intelligence; New Hampshire HB 690.