Energy Market Update - Sustainability Corner

Heinrich Lays Down Permitting Reform Marker on Expedited Generator Interconnection

• Sen. Martin Heinrich (D-NM) introduced the Grid Connection and Congestion Management Act on July 16, 2026.
• The bill would require RTOs and ISOs to offer a fast-track generator interconnection option called Basic Access Service for Energy-Only Delivery (BASED).
• Under BASED, projects could connect to the grid through an expedited process by agreeing to curtail output during periods of grid congestion or reliability constraints.
• The proposal is modeled after ERCOT's"connect and manage" interconnection framework.
• The stated goal of the legislation is to reduce interconnection delays and bring new generation and energy storage resources online more quickly.
• The bill has been introduced and is under congressional consideration.

EPA Clarifies Regulatory Obligations for “Islanded” Power Plants

• On July 16, 2026, EPA issued a memorandum clarifying that“islanded” power generation facilities with no physical connection to the electric grid are not subject to the Clean Air Act Acid Rain Program (ARP).
• The clarification was issued in response to requests from states and industry seeking guidance on the regulatory treatment of off-grid power plants, including facilities proposed to serve data centers.
• EPA stated that, based on ARP regulatory definitions, the program does not apply to power generation facilities that are not connected to the larger electricity grid.
• The memorandum references a proposed approximately 500 MW natural gas-fired facility intended to exclusively power an adjacent data center and operate without a grid connection.
• EPA noted that the memorandum is limited to clarifying applicability of the Acid Rain Program and does not provide a final determination for any specific facility.
• The memo's reasoning may have implications for evaluating applicability of other Clean Air Act programs and regulations, including the Carbon Pollution Standards, Good Neighbor Plan, and Mercury and Air Toxics Standards (MATS)
• According to a July 2026 Environmental Integrity Project report, at least 74 planned behind-the-meter natural gas plants have been proposed to serve data centers, though it is unclear how many would operate without a grid connection.

NYISO: NYSERDA Releases 2026-2029 Strategic Outlook

• NYSERDA released its 2026–2029 Strategic Outlook, outlining near-term priorities for advancing New York's clean energy, reliability, and affordability objectives.
• The outlook emphasizes continued Tier 1 renewable energy solicitations, prioritizing contracted projects that can achieve commercial operation by 2030 and maintain eligibility for existing federal tax credits.
• NYSERDA identified continued development of its Nuclear Master Plan as a key workstream supporting New York's planned 8.4 GW Nuclear Reliability Backbone.
• The agency plans to procure 3 GW of new bulk energy storage through Index Storage Credit contracts by 2028 as part of New York's goal of deploying 6 GW of energy storage by 2030.
• The outlook highlights ongoing monitoring of annual and seasonal clean energy deliveries from the Champlain Hudson Power Express (CHPE) transmission project into New York City.
• NYSERDA noted that implementation priorities are being pursued amid project delays, federal policy uncertainty, rising electricity demand, and evolving market conditions.

NYISO: NYISO and ConEd Studies Warn of Reliability Challenges

• NYISO's 2025–2044 System & Resource Outlook finds that maintaining reliability and meeting New York's clean energy goals will require significant investment in new generation and transmission infrastructure as electricity demand grows from electrification, large loads, and economic development.
• NYISO states that policy choices will significantly affect future resource needs, with scenarios pursuing a fully zero-emissions electric system requiring substantially more new capacity and infrastructure than scenarios allowing limited emissions from other resources.
• The outlook emphasizes that firm, flexible, and dispatchable resources remain important for reliability, while also highlighting the role of nuclear generation and the need for commercially viable dispatchable emissions-free technologies.
• Both NYISO and Con Edison identify growing reliability pressures from increasing demand, generator retirements, renewable project delays, and transmission limitations.
• Transmission capability is highlighted as a critical factor for reliability, reducing congestion, and enabling new resources to deliver power where needed.
• Con Edison’s reliability planning effort was initiated following PSC direction to address potential reliability needs in New York City and evaluate solutions that can maintain system reliability.
• The reports highlight the importance of coordinating new resource additions with planned retirements to maintain electric system reliability during the transition.
• Near-term stakeholder and regulatory proceedings are expected to continue as PSC review advances and NYISO progresses its reliability planning process.

ISO-NE: Internal Market Monitor’s Winter Markets Report Highlights Value of LNG

• ISO New England's 2026 Winter Quarterly Markets Report focused on the 19-day cold snap from January 23–February 10, 2026, which included Winter Storm Fern. The event was the second-longest consecutive cold-weather period since 2010, behind only the 2015 polar vortex.
• Winter peak demand reached 20,221 MW, the highest winter peak load observed in New England since January 2019.
• Wholesale electricity costs totaled $6.53 billion ($196/MWh) during Winter 2026, up 45% from Winter 2025 and more than double Fall 2025 levels. Nearly 45% of total energy, ancillary service, and uplift costs occurred during the 19-day cold snap.
• New England was a net exporter of electricity during several hours of the cold snap despite high regional demand. Differences in net interchange were identified as the primary driver of large day-ahead and real-time LMP deviations.
• At the New England Clean Energy Connect (NECEC) interface, no imports cleared in the day-ahead market until January 28, while real-time imports began flowing during most hours starting the evening of January 26.
• Higher loads and lower net imports increased reliance on natural gas and oil generation. During portions of the cold snap, oil generation exceeded natural gas generation, and oil was utilized at levels not seen since at least Winter 2015.
• LNG and oil inventories played a critical role in maintaining reliability. The New England gas system relied on LNG to support pipeline deliveries on approximately 58 days during Winter 2026. LNG send-out reached 45.9 million MMBtu, roughly double Winter 2025 levels and equivalent to about 39% of total gas-fired generation fuel requirements.
• Winter 2026 was the first winter operating under ISO-NE's Day-Ahead Ancillary Services (DA A/S) market. DA A/S payments increased from $34.1 million in Fall 2025 to $157.1 million in Winter 2026, although they remained a relatively consistent share of total energy and ancillary service costs, increasing from 2.1% to 2.5%

New Hampshire DOE Releases Report on Leaving ISO-NE

• On July 15, 2026, the New Hampshire Department of Energy released a report examining the costs, benefits, and feasibility of withdrawing from ISO New England (ISO-NE), as directed by HB 690 (2025).
• The report concludes that leaving ISO-NE would likely increase electricity-related costs for New Hampshire consumers. Total electricity supply and transmission costs were projected to be 13.6% higher by 2030 compared to remaining in the regional market.
• While bilateral energy arrangements could reduce some energy costs, those savings were projected to be outweighed by higher transmission, capacity, and operating reserve costs.
• The study found transmission costs would increase because New Hampshire would no longer share regional transmission expenses with other New England states and would need to bear a larger share of costs associated with maintaining transmission access.
• Capacity and operating reserve costs were also projected to rise because New Hampshire would need to develop replacement mechanisms to support resource adequacy and grid reliability outside ISO-NE markets.
• The report states that New Hampshire would need to assume functions currently provided by ISO-NE, including transmission planning, market administration, system operations, resource adequacy administration, and reliability coordination.
• The study notes that withdrawal would likely involve significant legal, regulatory, implementation, and administrative costs, as well as potential exit fees and the need to maintain compliance with federal reliability requirements.
• The report ultimately recommends that New Hampshire remain in ISO-NE and pursue policy objectives through existing regional stakeholder processes, including engagement with ISO-NE, NEPOOL, the New England States Committee on Electricity (NESCOE), and FERC proceedings.

LevelTen Energy’s snapshot on U.S. and EU Power Purchasing Agreement (PPA) pricing is below. For more information on LevelTen please visit www.leveltenenergy.com.

Sustainability Corner: Net Zero vs. Carbon Neutral

What is Carbon Neutral?

Carbon neutrality refers to a state where carbon dioxide (CO₂) emissions associated with an organization, product, service, event, or activity are balanced through a combination of emissions reductions and carbon offsets. Carbon neutrality does not necessarily require eliminating all emissions before using offsets.

Key Facts

• Focuses primarily on carbon dioxide (CO₂) emissions.
• Emissions may be balanced through carbon offset projects.
• Can apply to specific products, facilities, events, or entire organizations.
• There is no single universally accepted carbon-neutral standard.

What is Net Zero?

Net Zero refers to reducing greenhouse gas (GHG) emissions as close to zero as possible and balancing any remaining emissions through carbon removals. Net Zero generally applies across a company's entire emissions inventory and requires significant emissions reductions before addressing residual emissions.

Key Facts

• Covers all greenhouse gases, not just CO₂.
• Includes Scope 1, Scope 2, and often Scope 3 emissions.
• Requires substantial emissions reductions before neutralizing residual emissions.
• Carbon removals are used only for emissions that cannot be eliminated.
• Widely incorporated into corporate climate strategies and international climate targets.

Key Differences

• Carbon Neutral focuses primarily on balancing CO₂ emissions.
• Net Zero focuses on reducing all GHG emissions to the greatest extent possible before addressing remaining emissions.
• Carbon offsets are commonly used to achieve carbon neutrality.
• Net Zero typically relies on carbon removals for remaining residual emissions after reductions

Related Terms

• Carbon Offset: A reduction, avoidance, or removal of emissions used to compensate for emissions produced elsewhere.
• Carbon Removal: The process of removing CO₂ from the atmosphere through natural or technological methods.
• Residual Emissions: Emissions that remain after all feasible reduction measures have been implemented.

Key Takeaway:

Carbon Neutral focuses on balancing carbon dioxide (CO₂) emissions, often through a combination of emissions reductions and carbon offsets. Net Zero focuses on reducing all greenhouse gas (GHG) emissions as close to zero as possible.

For questions on these items and more please reach out to SustainabilityTeam@Constellation.com and your inquiry will be directed to an inhouse expert.