Introducing DASI – New England’s New Ancillary Market
At the beginning of March, ISO-NE changed the way its ancillary market operates. It implemented the Day-Ahead Ancillary Services Initiative (DASI), which will impact all customers in the region. In this first blog on the topic, we’ll cover the history of the ancillary market in ISO-NE and how DASI differs.
What Are Ancillaries?
Ancillary services are crucial for maintaining grid stability and supporting the reliable delivery of electricity. These services include resources like regulation, operating reserves, and voltage support. Ancillary costs are set in their own independent market, similar to energy or capacity.
Historical Ancillary Market in ISO-NE
In the past, the ISO-NE ancillary cost would be set for six months at a time. Ancillary suppliers would bid into the market however many megawatts (MW) they would be able to provide at a given time and their cost. Historically, this has been a low percentage of total costs for customers and typically fixed in energy contracts. With the implementation of DASI, that may no longer be the case—the price may no longer be fixed in future contracts.
What is DASI?
DASI, pronounced “daisy,” is an initiative from ISO-NE to lessen the need for fast start generation assets and diminish loads settled on the real time market over time. As the name suggests, this new market structure operates on the day-ahead market, so costs are more variable. Most notably, DASI includes a new component to the ancillary market. This new component was designed to bridge the gap between supplier bids and expected demand. This cost is set on the real-time market, which means increased costs for consumers during times of uncertainty.
What This Means for Customers
While ancillary services have always been part of electricity costs, the recent implementation of DASI has made these charges both higher and more unpredictable. Unfortunately, there’s little consumers can do to avoid these changes, as ISO-NE doesn’t allow for public input. That’s where working with an experienced energy partner like Environ can make a difference. Our team monitors evolving market dynamics and helps clients develop strategies to manage volatility, reduce exposure, and stay ahead of rising costs.
