New England Grid Operator Misses the Mark on Clean Energy

The company running the power grid in the six New England states is making a costly and environmentally careless bet on how electricity for the region’s 7.2 million customers is generated during times of greatest demand.
Block Island Wind Farm turbine

Chris Bentley via Flickr under a Creative Commons license

The company running the power grid in the six New England states is making a costly and environmentally careless bet on how electricity for the region’s 7.2 million customers is generated during times of greatest demand.

ISO New England wants to change the rules by which it operates and favor fossil fuels to the exclusion of clean energy.

In pressing its case with federal regulators in a filing last month, the grid operator is ignoring the public policy goals of the region’s states, which are pursuing a carbon-free future to fight the effects of climate change.

In fact, by changing the way energy resources are compensated, the grid operator’s plan is likely to make it more difficult for offshore wind and other clean resources like demand response—where large customers volunteer to curtail electricity use when the grid is stressed—to compete.

The Sustainable FERC Project, NRDC, and like-minded colleagues are asking the Federal Energy Regulatory Commission (FERC) to reject this proposal and pursue instead less expensive and more forward-looking alternatives consistent with Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont’s priorities.

We were joined in our May 15 filing at FERC in opposition to the grid operator’s proposal by Acadia Center, Conservation Law Foundation, Sierra Club, Union of Concerned Scientists, and Vote Solar.

ISO New England on April 15 asked FERC to approve so-called “Energy Security Improvements” to its power market rules that would bestow an advantage to power plants fueled by gas, coal, or fuel oil.

The proposal would provide payments to fossil fuel resources that store more fuel on site or make contractual arrangements for delivery of fuels like liquified natural gas (LNG). The grid operator claims these payments are needed to ensure the region has enough energy to meet electricity demand.

The proposed changes are in response to FERC having found, in 2018 under the Federal Power Act, that the grid operator’s existing rules may be “unjust and unreasonable” because of a risk that New England, which currently relies heavily on gas-fired power generation, could be unable to meet electricity demand during the coldest days of an unseasonably cold winter.

During such periods, competition for gas to meet heating demand can reduce the amount of gas available to generate electricity. The grid operator refers to this problem as an issue of fuel or energy security.

Unfortunately, ISO New England—which is a nonprofit corporation that answers only to FERC—took the easy way out in crafting its proposed solution, which seeks to lock in the region’s current carbon-intensive power plants while ignoring the clear preferences of the New England states.

Rather than facilitating the growth of 21st century alternatives to fossil fuel generators, the grid operator seeks to double down on dirty and outdated 20th century technologies. According to the grid operator itself, its proposed changes could funnel millions of customer dollars a year to fossil fuel power plant owners.

As we have previously commented to FERC, ISO New England’s analysis of winter energy concerns, upon which FERC based its 2018 finding, was deeply flawed.

In fact, subsequent analyses from the grid operator and others have shown that New England’s growing clean energy resources, being built in accordance with state laws, are helping make the regional grid more energy secure.

For example, a December 2018 analysis from the grid operator shows that fuel-free resources like offshore wind can overperform during winter storms—which are often accompanied by higher wind speeds—providing critical energy to the grid at the times the grid operator is most concerned about gas shortages, and providing cheaper, fuel-free energy that lowers costs for customers.

New England is the cradle of the nation’s offshore wind industry. The first wind farm, the Block Island Wind Farm, went operational in 2016. Its 30 MW powers roughly 17,000 homes in Rhode Island.

Much more is coming. Massachusetts, Rhode Island, and Connecticut have committed to build at least 5,000 MW of offshore wind farms in the coming years.

Combined with growing levels of energy efficiency, solar power, and other clean resources in the region, New England is transforming its grid to be less polluting and less reliant on fossil fuels.

But the grid operator’s proposal ignores these benefits and trends. It provides no pathway for fuel-free resources to provide energy security at lower cost by moving the grid off fossil fuels entirely.

Under federal law, states retain the exclusive right to determine what type of technologies should generate electricity for their citizens. Each of the New England states has set aggressive goals to decarbonize their electricity generation by encouraging new wind and solar power projects as well as investments in energy efficiency.

We urge FERC to reject ISO New England’s ill-conceived, costly change to its market rules. Both institutions need to be key players in helping the New England states realize their transition to a clean energy future, not stand in their way.

Doing right by the region’s ambitions will protect public health, help us build a stronger and more reliable grid, support action to fight the climate crisis, and save customers millions of dollars.

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