20+ Years of ISO New England

A New Era of Competition and Reliability

When you compare New England’s earlier electric power system with today’s power grid, the contrast is striking.

1970s through early-1990s: For decades, the region’s utilities operated as vertically integrated, regulated monopolies that generated, transmitted, and distributed electricity to retail customers at cost-of-service rates. Dissatisfied with these rates and a lack of investment in new infrastructure and more efficient, cost-effective technologies, the region began pursuing an alternative framework, one that would introduce competition into the industry.

Mid-1990s on: After passage of the Energy Policy Act of 1992, the Federal Energy Regulatory Commission (FERC) created independent system operators and, in 1997, gave ISO New England responsibility for ensuring a reliable supply of electricity for the region and establishing and overseeing competitive wholesale markets for buying and selling electricity.

• Working closely with the New England states, electric power companies, and other regional stakeholders, the ISO helped lead the nation's most advanced effort at industry restructuring.
• A new competitive marketplace with open access to transmission lines created a level playing field for buyers and sellers of wholesale electricity. During that same period, five of the six New England states passed laws creating competitive retail electricity markets and ultimately divesting most of the utility-owned generation in the region.
• This transferred the risk in developing new power resources to investors and away from retail customers and created an incentive to build and run these plants as cost-effectively as possible.
• ISO New England was designated a Regional Transmission Organization in 2005, with broader authority over the development of the transmission system and greater independence to design fair and efficient wholesale markets.

Today, the ISO continues to fulfill its historic mission of using competitive markets to secure a reliable supply of electricity for New England's households and businesses. See the ISO timeline for more highlights of its two decades serving the region.