New Hampshire Explores ISO-NE Exit: What an Unprecedented Grid Separation Means for Commercial Energy
New Hampshire has taken the unprecedented step of authorizing a $230,046 study under House Bill 690 to explore options for withdrawing from ISO New England. The state is seeking to insulate its ratepayers from costs associated with the region's environmental policies, which drive capacity market premiums and renewable mandates. ISO-NE has called such a withdrawal "unprecedented" and warned it "could degrade grid reliability." The timing is notable: February 2026 saw real-time LMPs spike to $315/MWh on February 9 and $120/MWh on February 17, with emergency grid procedures active for 18 days through February 11. For commercial buyers across New England, this amounts to a regulatory wildcard that could reshape market structure itself.
HB 690: What New Hampshire Is Actually Studying
House Bill 690 doesn't commit New Hampshire to leaving ISO-NE. It authorizes a formal study — costing $230,046 and spanning a full calendar year — to examine options for insulating NH ratepayers from costs they argue are driven by other states' environmental policies.
The core grievance: New Hampshire ratepayers are paying capacity market premiums that reflect Massachusetts', Connecticut's, and Rhode Island's aggressive renewable mandates and clean energy targets. NH legislators argue these policies raise capacity auction clearing prices for all six New England states, including those without comparable mandates.
February 2026: A Climate of Frustration
The HB 690 study comes during one of the most volatile winter months in recent ISO-NE history. The grid experienced:
- $315/MWh real-time LMP spike on February 9 at 1:00 AM, driven by high fuel prices during cold weather. Peak load hit 19,123 MW that evening.
- Emergency procedures active for 18 days: Master/Local Control Center Procedure #2 (M/LCC 2) was implemented from January 25 through February 11 due to severe weather.
- $120/MWh spike on February 17, caused by loads exceeding forecasts, with peak demand at 17,123 MW.
- Persistent congestion: Maine Load Zone depressed pricing due to binding Maine-New Hampshire interface constraints; Rhode Island elevated pricing from transmission line limits.
⚡ Expert Insight — KilowattLogic Research
"The NH exit study is politically motivated but economically legitimate. New Hampshire's objection isn't to the ISO model itself — it's to paying for policy decisions made in Boston and Hartford. The probability of actual withdrawal is low (the reliability complications are enormous), but the study will produce valuable data on cost allocation that could influence FERC proceedings on New England market design. For commercial buyers in NH, the actionable takeaway is: don't wait for the study results (12+ months). Lock in competitive supply contracts now, because the political uncertainty adds a risk premium to NH markets."
Vermont Adds Pressure: Data Center Cost Allocation
New Hampshire isn't alone in questioning ISO-NE's cost allocation. Vermont federal lawmakers are urging ISO-NE to require data centers to cover the costs of their own electricity consumption and grid upgrades. Vermont legislators are also considering bills to regulate data center development and minimize ratepayer impacts — a direct echo of the cost-shifting concerns driving NH's study.
ISO-NE's Capacity Market Redesign Adds Context
Concurrent with the political friction, ISO-NE is executing its own market redesign. The first phase of a capacity market restructuring was filed with FERC in December 2025, establishing a prompt auction schedule and deactivation reforms. The second phase — creating seasonal auctions and new resource accreditation standards — is being designed throughout 2026.
The Day-Ahead Ancillary Services Market also completed its first year of operations on February 28, 2026, with assessment findings expected in Q1/Q2. ISO-NE's February draft demand forecast continues to project load growth from heating electrification and transit, which means the cost pressures driving NH's frustration are likely to intensify.
Commercial Buyer Implications
Suppliers pricing NH contracts may build in uncertainty premiums. Consider longer-term fixed-rate contracts to lock in before the study creates headlines.
$315/MWh spikes demonstrate that gas pipeline constraints — not market structure — drive the most expensive hours. Dual-fuel capability and demand response enrollment are the best near-term hedges.
ISO-NE's seasonal capacity auctions (Phase 2, being designed in 2026) could address cost allocation concerns without the disruption of a state withdrawal. Watch for FERC filings in Q2-Q3.
ISO-NE is reviewing six proposals to address Maine congestion, with a preferred solution announcement expected in September. If approved, this could reduce New England-wide congestion costs.
Bottom Line
New Hampshire almost certainly will not leave ISO-NE — the reliability and grid interconnection complications are too severe. But HB 690 is a serious political signal that cost allocation in the New England capacity market is reaching a breaking point. For commercial buyers, the study matters less than the ongoing market dynamics: $315/MWh winter spikes, capacity market redesign, and data center cost-shifting debates will shape your energy costs far more than any state withdrawal scenario. Focus your procurement strategy on winter volatility hedging and capacity cost management.
Sources: NH House Bill 690, ISO-NE Weekly Market Reports (Feb 2-8, 9-15, 16-22, 2026), ISO Newswire, The Dartmouth, VTDigger, Grid Status. LMP data from ISO-NE official market reports. Emergency procedure timeline confirmed via ISO-NE operations reports.