DASI Explainer & Bill Shock Estimator
What Is DASI?
DASI stands for Day-Ahead Ancillary Services Initiative. Launched by ISO New England in March 2025, DASI represents a fundamental restructuring of how New England's power system secures the operating reserves needed to keep the grid reliable.
The Change: DASI replaced the old Forward Reserve Market with a co-optimized day-ahead market for both energy and ancillary services. Before DASI, ISO-NE only purchased reserves in real time. With DASI, ISO-NE now secures reserves a full day in advance to improve grid reliability. The tradeoff: the cost has been staggering.
Timeline & Context
- February 2024: FERC approves DASI as part of ISO-NE's market redesign
- March 2025: DASI goes live, replacing the Forward Reserve Market
- March 2025 – February 2026: First full 12 months of operation during the coldest winter in 20 years
- Summer 2026 (expected): FERC and ISO-NE file proposed reforms to address cost overruns
Why DASI Matters for Brokers
DASI costs are now a permanent component of wholesale electricity pricing in New England. Unlike one-time events, this is a structural cost layer that must be factored into every competitive supply quote. Brokers who price contracts as if DASI doesn't exist are leaving margins on the table.
The Cost Shock — By the Numbers
DASI was supposed to be a modest change. The numbers told a different story.
The Reality Gap
ISO-NE's original estimate of $1–2/MWh for DASI costs turned out to be dramatically low. The actual average cost from March 2025 through February 2026 was $8.58/MWh — a staggering gap that exposed assumptions about market conditions that did not hold.
DASI as a Share of Total Costs
DASI now accounts for approximately 9% of total wholesale energy and ancillary service costs in New England. For a typical commercial customer buying power in a competitive supply contract, this represents an unexpected but permanent uplift to pricing.
What Happened This Winter (2025–2026)
Winter 2025–2026 was not just cold. It was the coldest winter in 20 years in New England, and it hit during DASI's first full operating season. The combination amplified DASI costs to historic levels.
The Market Context
- Highest winter energy use since 2014 – demand for heating and power generation skyrocketed
- Peak load reached highest level since 2018 – grid stress was sustained over weeks, not hours
- Most expensive winter wholesale market in ISO-NE history – total energy market values for Dec–Jan–Feb reached approximately $6 billion
- Natural gas basis (Algonquin Citygate) spiked multiple times – generators' fuel costs rose sharply, pushing energy prices higher
DASI Costs During Winter 2025–2026
- December 2025: approximately $17/MWh DASI cost
- January 2026: approximately $48/MWh DASI cost
- January 26–27 alone: Two days consumed the equivalent of two full years of originally projected DASI costs
These spikes were driven by the structural nature of the day-ahead reserve market: when gas prices surge and supply gets tight during cold snaps, the cost to fill the day-ahead reserve requirement becomes enormous.
The Structural Flaw
DASI was designed assuming normal market conditions — moderate demand, stable fuel prices, and ample supply. A 1-in-20-year cold snap revealed the system's vulnerability. When the energy market is tight and expensive, setting aside reserves one day ahead becomes prohibitively costly.
Why January Was So Expensive
In January 2026, the wholesale energy market was trading at elevated levels, natural gas basis costs were crushing, and generators had little spare capacity. ISO-NE still needed to procure operating reserves the day ahead. Generators demanded $48/MWh for reserves instead of the typical $8–$10.
Will Next Winter Be as Expensive?
Probably not — but don't expect DASI costs to return to the pre-March 2025 baseline either.
The Likely Scenario
Winter 2025–2026 was a 1-in-20-year cold event. Weather forecasts for 2026–2027 are not predicting a repeat. A milder winter would likely see DASI costs drop to $10–$20/MWh, a significant decline from January's peaks but still well above the original $1–2/MWh estimate.
Key Variables to Watch
- Natural gas prices: LNG regasification capacity and U.S. export demand will set the floor for gas prices
- LNG import availability: Any outage or constraint tightens gas supply and increases prices
- Generation retirements: Every plant retirement reduces dispatchable supply and makes reserves harder to secure
- ISO-NE DASI reform timeline: FERC filing expected summer 2026
- Regional political pressure: Market reform debates could influence FERC's willingness to approve cost-saving changes
DASI Cost Expectations
- Normal weather: $5–8/MWh
- Cold snap: $15–50+/MWh
- Extreme scenario: $40–60+/MWh for days or weeks
Bottom line: DASI is a permanent cost layer. The question is no longer whether DASI will be an issue, but how much should be reserved for DASI when quoting fixed-rate supply.
Interactive Bill Shock Calculator
Use the calculator below to estimate how DASI costs would impact your customer across different scenarios. Adjust annual usage and select a scenario to see annual, monthly, and incremental costs.
Calculator
Based on DASI costs as of April 2026. Estimates are illustrative and subject to change.
Select Parameters to See Impact
Enter your customer's annual usage and choose a DASI scenario, then click Calculate.
📈 Annual DASI Cost Comparison
* Mild = potential scenario with normal weather and ISO-NE reforms pending. Average = actual average from March 2025–Feb 2026. Severe = worst-case if elevated winter conditions persist. Extreme = peak January 2026 levels observed during the coldest winter in 20 years. All costs are incremental to baseline ancillary cost of approximately $1.50/MWh pre-DASI.
What This Means for Your Customers
Default Service / Basic Service
DASI costs are already embedded in utility rates. Customers on default service have no choice and bear the full cost. They will see the impact reflected in future rate cases or rider adjustments.
Fixed-Rate Competitive Supply
Customers are protected if their contract does not include a DASI pass-through clause. This is a key selling point. A broker can quote a fixed rate that reflects current DASI costs, locking the customer in for 1, 3, or 5 years.
Critical: New contracts must reflect current DASI realities. Quoting as if DASI is still $1–2/MWh can destroy margins.
Variable / Index-Based Supply
DASI costs flow through directly. Customers on variable or index-based contracts felt the full impact of this winter's cost spike. These are the customers most likely to experience real bill shock.
The Bottom Line for Brokers
DASI adds roughly 9% to total wholesale energy and ancillary costs. Every new quote issued after March 2025 must account for this. Offering fixed-rate contracts that shield customers from DASI volatility is a strong competitive advantage — provided the quote is built with realistic DASI assumptions.
Sources & References
Official Documentation & Analysis
Cost Analysis & Monitoring
Gridwealth Resources
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