While New Hampshire could theoretically withdraw from ISO New England, there is significant practical uncertainty tied to such a move, London Economics International concludes in a recent report.
The report also concludes that exiting from ISO New England would likely increase electricity supply and transmission costs for New Hampshire customers.
Background
New Hampshire House Bill 690 directed the New Hampshire Department of Energy to investigate the state of New Hampshire’s withdrawal from ISO New England and other strategies “to assure that New Hampshire ratepayers do not pay for public policy initiatives of other New England states, including environmental policies, in a manner that is unjust and unreasonable.”
HB 690 also asks whether New Hampshire state agencies, utilities, or other entities could assume responsibilities currently performed by ISO-NE, and what withdrawal could mean for electricity costs, reliability, governance, and regulatory obligations.
London Economics International was engaged by NHDOE to investigate and report on this matter.
The July 2026 report is intended to summarize the findings of a six-month process that LEI undertook with the support of the NHDOE staff and other stakeholders to investigate these issues.
Analysis Identifies Three Theoretical Options
For the analysis, LEI initially determined that there are three theoretical options for New Hampshire to consider: (1) New Hampshire does not leave ISO-NE and seeks reform; (2) New Hampshire partially withdraws from ISO-NE with one or more entities taking on primary functions of ISO-NE; and (3) New Hampshire comprehensively withdraws from ISO-NE with one or more entities assuming all functions of ISO-NE.
“From its analysis and informed by discussions with stakeholders, LEI determined that a partial exit as defined by (2) above would not be feasible due to the necessary cooperation with ISO-NE and federal regulatory approval required,” the report said.
“Overall, LEI’s analysis indicates that withdrawal from ISO-NE is legally and operationally possible but there is considerable uncertainty as it is unprecedented, and the State of New Hampshire is not officially a part of ISO-NE. Moreover, ISO-NE’s governing documents do not lay out a guide to such a withdrawal. Such a withdrawal would only be viable if New Hampshire can establish a successor structure that performs the functions ISO-NE currently provides and satisfies applicable federal and regional reliability requirements.”
Were New Hampshire to withdraw from ISO-NE, LEI identified that “a pragmatic and administratively coherent withdrawal structure would involve implementation of stand-alone functions within New Hampshire but also continue with trading with ISO-NE,” the report said. LEI called this a comprehensive “exit but trade” scenario.
Under this scenario, New Hampshire would no longer participate in ISO-NE as part of the regional market and transmission framework, but the New Hampshire transmission system would remain physically interconnected with the rest of New England and resources in New Hampshire would be able to continue to trade surplus energy, capacity, and ancillary services with the ISO-NE administered markets.
LEI also said that all the functions that ISO-NE currently performs would need to be assigned to other (willing) parties if a withdrawal occurred.
ISO-NE currently provides three core services – regional grid planning, market administration, and grid operations.
ISO-NE’s responsibilities with relation to these services would need to be taken over by some combination of New Hampshire utilities, state agencies, and/or a new state-authorized entity, or contracted third-party administrator, the report said.
Any successor non-ISO-NE structure would remain subject to applicable federal jurisdiction, open-access transmission requirements, and North American Electric Reliability Corporation and Northeast Power Coordinating Council reliability standards.
New Hampshire laws, as well as various agreements and business practices, would need to be modified to achieve compliance with Federal and regional planning mandates, as well as transmission system operating and reliability requirements, by New Hampshire entities, LEI said.
New Hampshire as a state is not itself a direct participant in ISO-NE. Instead, Transmission Owners are the direct participants in ISO-NE.
“This means for New Hampshire to withdraw from ISO-NE, it will have to seek cooperation from Transmission Owners and enact laws mandating Transmission Owners located within New Hampshire to withdraw from ISO-NE.” the report said.
In addition, New Hampshire’s statutes do not simply “join” the state to ISO-NE in one place, LEI said.
Rather, ISO-NE and regional market participation “are embedded throughout the state’s restructured electricity framework. If New Hampshire utilities were to leave ISO-NE, most of these laws could theoretically continue under a successor structure. However, the statutes would likely require more than minor definitional edits, as multiple references to ISO-NE and other regional structures would need to be replaced with a new institutional and market framework.”
Costs
LEI also said that New Hampshire consumer costs would likely rise on a net basis because of the loss of efficiency associated with being part of a larger, competitive wholesale energy market. “New Hampshire ratepayers would also face transition costs and costs of the new administrative responsibilities that New Hampshire would have to take on.”
LEI quantified the impacts of the comprehensive “exit but trade” scenario using a total ratepayer cost approach at the wholesale level. The analysis included transmission-rate modeling, wholesale energy-market simulation, and investigation of ancillary services costs and capacity costs.
Based on LEI’s forward-looking modeling, New Hampshire’s withdrawal from ISO-NE under this “exit but trade” scenario would result in approximately $148 million higher annual transmission and supply costs compared to continued participation in ISO-NE. Some costs – like energy – go down, while others go up, the report noted.
The principal driver of higher costs is related to higher stand-alone transmission costs, because the revenue requirement to support the current and planned New Hampshire transmission system that is designed for a regional network would be recovered from a smaller New Hampshire load base.
On the other hand, energy market costs may be lower for New Hampshire load.
A benefit-cost analysis in the report does not include: (a) any FERC-mandated exit fees; (b) legal expenses with implementing a withdrawal; or (c) consideration of the ongoing operating budgets for the new roles and responsibilities that New Hampshire entities would need to take on from ISO-NE (system operations, planning, and market administration).
“These additional costs are uncertain but, based on LEI’s review of experiences in other markets, are likely to be material.”
