Carbon pricing and clean-energy mandates are modeled at the regional and state level. Because these programs do not apply uniformly across the Eastern Interconnection footprint, this page documents each program once and notes which ISOs and states it constrains.
| Program | Type | Applies to |
|---|---|---|
| RGGI | CO2 cap-and-trade | NYISO and ISO-NE in full; the NJ, MD, DE, and VA portions of PJM. Not MISO (and not PJM’s PA load). |
| Federal PTC / ITC | Production & investment tax credits | All ISOs (embedded in CEM investment economics) |
RGGI carbon budget
The Regional Greenhouse Gas Initiative (RGGI) is a cap-and-trade programme covering CO2 from power plants in the northeastern states. Generators in member states must purchase allowances at quarterly auctions; the cap declines annually. Only generators located in RGGI member states face the constraint.
| Parameter | Value | Source |
|---|---|---|
| 2024 regional cap | ~91 million short tons CO2 | RGGI Model Rule |
| Annual decline | 2.275% per year (2024+) | RGGI 2024 Interim Control Period |
| CCR Tier 1 trigger | ~$15.37/short ton (2024, +7%/yr) | RGGI Model Rule |
| CCR Tier 2 trigger | ~$26.32/short ton (2024, +7%/yr) | RGGI Model Rule |
| CCR volume (each tier) | 10% of base cap | RGGI Model Rule |
The capacity expansion model enforces the declining RGGI cap, with the CCR tiers releasing additional allowances at their triggers, and produces the resulting allowance-price path. That path is seeded into the dispatch model, where generators obligated under RGGI pay it as a per-megawatt-hour carbon adder: plant-specific emissions intensity (tCO2/MWh, from heat rates and fuel CO2 content) times the allowance price. This raises the marginal cost of fossil generation in member states, and as the cap tightens it accelerates economic retirements. Only generators located in RGGI member states carry the adder.
The modeled allowance price rises from about $35/tonne in 2026 to roughly $95/tonne by the late 2030s as the cap tightens, then eases toward the mid-$80s by the mid-2040s.
| Input | Source | Link |
|---|---|---|
| RGGI cap schedule and CCR parameters | RGGI Model Rule (2024 revision) | RGGI Model Rule |
| RGGI auction clearing prices | RGGI Auction Reports | RGGI Auctions |
| RGGI member state list | RGGI website | RGGI States |
State storage mandates
State storage mandates act as buildout floors and ceilings in the near term across several MISO states (for example Illinois, Michigan, Minnesota, Missouri, and Indiana).
Federal tax credits
PTC and ITC values by technology are embedded in the CEM investment economics, reducing the effective CAPEX of eligible renewables and storage. These apply across all modeled ISOs.