Comments on Meeting Resource Adequacy Challenges in Regional Transmission Organization and Independent System Operator Regions

The Federal Energy Regulatory Commission convened a Commissioner-led technical conference (Docket No. AD25-7-000) to examine whether current resource adequacy frameworks in ISO/RTO regions are sufficient to maintain reliability amid rapidly growing electric demand and a changing generation mix. Danielle Powers and Mark Karl were among those to submit responsive comments to offer perspective on the state of capacity markets and the reforms needed to ensure long-term system security.

Traditional capacity market constructs, originally designed around fleets of dispatchable, fuel-secure resources, is no longer effective in today’s environment. While reforms such as Effective Load Carrying Capability and seasonal capacity auctions may provide incremental improvements, they do not address the structural challenges facing the grid. In particular, current markets fail to account for the full range of reliability attributes, send weak investment signals, and rely too heavily on short-term centralized procurement.

With AI-driven data center load and electrification expected to push peak demand sharply upward across all regions in the next decade, urgent, structural reforms are needed. Regions must go beyond incremental market design tweaks and embrace a more proactive, long-term approach to procurement and planning. This includes strengthening requirements for load-serving entities to enter into long-term bilateral contracts, establishing or expanding central procurement entities such as regional power authorities to secure essential reliability services, and potentially restoring utility-owned generation under cost-of-service regulation for capital-intensive resources. These tools are critical to re-establishing durable, forward-looking investment signals.

Ultimately, the conclusion is clear: ensuring long-term reliability in a rapidly evolving electric system will require bold action, not marginal adjustments. A greater commitment to centralized planning and procurement, aligned with policy, reliability, and investment goals, is essential to delivering a resilient and reliable grid in the decade ahead.

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All views expressed by the authors are solely the authors’ current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, related companies, or clients. The authors’ views are based upon information the authors consider reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such.