On March 31, 2026, FERC accepted ISO-NE’s Phase 1 Capacity Auction Reforms (CAR). The 3-year forward Forward Capacity Auction (FCA) — the model that has priced capacity in every fixed New England supply offer for nearly two decades — is being replaced with a prompt Annual Capacity Auction held roughly one month before each delivery period. The resource exit timeline is compressed from four years to one. The first auction under the new framework runs in 2028 for the 2028/29 commitment period.
That is the structural change. The broker implication is simpler: every fixed offer with a delivery window crossing June 1, 2028 has a capacity assumption that no longer has a clean forward signal to stand on.
Bottom line upfront: If you are still quoting flat, no-reopener fixed offers for Cal 2028 or Cal 2029 delivery, stop. The capacity block in those offers is now speculative. Gridwealth is not fixing capacity past 5/31/28 without a pass-through or a reopener tied to the first prompt auction. Expect every credible supplier to take a similar stance over the next 60 days.
Why This Matters for Your Customer Conversations
Capacity is the component of a C&I electricity rate that you cannot see on the LMP tape. It shows up inside the “all-in” price your supplier quotes, and historically it has been underwritten by FCA clearing prices published years in advance. Brokers and suppliers could quote Cal 2028 and Cal 2029 fixed products because the FCA had already told them what capacity cost would be.
That goes away under CAR Phase 1. The 2028/29 capacity block won’t be priced until ~one month before delivery. Until that auction clears, suppliers are taking a view — not pricing a published number.
Two practical consequences
1. Fixed-capacity offers extending past 5/31/28 are changing. At Gridwealth, we are not fixing capacity beyond 5/31/28 on offers quoted today unless the offer includes a capacity pass-through or a reopener tied to the first prompt auction. If a broker channel is still seeing flat, no-reopener fixed quotes for Cal 2029 delivery in April 2026, ask what capacity clearing price is baked in and how it was derived.
2. Customers with renewals spanning 2028 need to understand the reopener. This is not a scary conversation — it is a customer education moment. Explain that capacity pricing is becoming more accurate (prompt auctions use real supply and demand data, not 3-year-old forecasts) and that the reopener protects the customer from paying a speculative premium. Frame it as “the market is getting more transparent,” not “there is a new risk.”
What CAR Phase 1 Actually Changes
| Dimension | Old (FCA) | New (Prompt ACA) |
|---|---|---|
| Auction timing | ~3 years before delivery | ~1 month before delivery |
| Commitment period | Annual, June–May | Annual, June–May (Phase 1); seasonal coming in Phase 2 |
| Resource exit timeline | 4 years | 1 year |
| First auction under new rules | — | 2028 (for 2028/29 commitment) |
| Phase 2 FERC filing | — | Expected end of 2026 — seasonal auctions + updated accreditation |
The Rest of the Picture: The Underlying Commodity Signal Is Still Buy
While the capacity story has changed, the energy and gas picture has not. As of this week:
| Indicator | Value | Trend |
|---|---|---|
| Henry Hub prompt (Apr 13) | $2.63/MMBtu | ▼ 5-month low |
| Henry Hub spot (Apr 20) | $2.71/MMBtu | Near 5-month low |
| Algonquin Apr bidweek | $2.695/MMBtu | Inverted to Henry Hub |
| EIA storage (Apr 10) | 1,970 Bcf | +59 Bcf (beat +51 Bcf est.) |
| Storage vs 5-yr avg | +108 Bcf surplus | Bearish for summer gas |
| Mass Hub DA LMP | ~$60/MWh | 5 weeks under $65/MWh (longest since 2023) |
Translation: if your customer’s decision is when to buy energy, the signal has not weakened. This is still the cheapest sustained shoulder window of 2026.
The Broker Play, in Two Sentences
Offer a 12-month fixed through November 2026 for customers expiring April through July — a clean, reopener-free product that captures the trough. Offer a 24-month fixed with a CAR Phase 1 capacity reopener for customers who want to blend the Cal 2027–2028 backwardation into their blended rate.
Either play beats waiting. Gas is cheap, storage is over-supplied, AC load hasn’t built yet. The worst case for your customer is calling in June asking why pricing moved up $5–10/MWh.
A Note on Rhode Island and BERDO
Rhode Island: the savings pitch just got harder. Reposition.
RI Energy’s Last Resort Service Small Commercial rate dropped to 10.485¢/kWh effective April 1 — a 15.9% reduction vs. the winter rate (Docket 26-03-EL). Headline-savings pitches against LRS will be harder through September. Reposition RI conversations toward budget certainty, REC bundling, and the pending RI Energy $230M rate case (effective September 1, 2026 if approved: ~4.83% residential electric uplift, ~20.6% gas uplift). The math still works in the customer’s favor; the story is different.
BERDO: the deadline moved, the obligation did not.
The BERDO Review Board extended the 2026 reporting deadline from May 15 to August 15, 2026. This is a scheduling break, not a compliance reprieve — Boston buildings with excess 2025 emissions still need a pathway: efficiency upgrades, RECs/PPAs, or Alternative Compliance Payment at $234/metric ton CO&sub2;. MA Class I RECs are currently ~$38–42/REC and Gridwealth’s 100% MA Class I REC product is BERDO-eligible. Use the extra runway to close, not to stall.
What Gridwealth Is Doing
- Rewriting the capacity assumption in every offer with post-5/31/28 delivery. Brokers will see standardized reopener language shortly.
- Publishing updated broker channel talking points for MA H.5175 (MA House passed the residential-supplier compromise 128-27 on Feb 26; C&I and CCA are not touched) and the new CAR Phase 1 framework.
- The Gridwealth ISO-NE Zone Dashboard and DASI Bill Shock Estimator remain the fastest way to convert market data into customer-facing math. If you are pitching an index-supply renewal against winter 2027, the estimator is designed exactly for that conversation.
Need the CAR Phase 1 explainer for your next customer call?
We’re sending brokers an updated channel pack this week — H.5175 status, CAR Phase 1 reopener language, RI positioning. Request a quote or the broker pack below.
Request a Quote or Broker Pack →
