Battle underway to get more clean energy into New England’s electric grid
In January 2020, Katie Dykes, commissioner of Connecticut’s Department of Energy and Environmental Protection — speaking to environmental advocates attending the Connecticut League of Conservation Voters annual environmental summit — leveled this broadside at the independent system operator that runs the six-state New England electricity grid and the federal authorities that govern it:
“Because of the lack of leadership on carbon at the ISO-New England, we are at the mercy of a regional capacity market that’s driving investment in more natural gas and fossil fuel power plants that we don’t want and that we don’t need,” she said. “This is forcing us to take a serious look at the costs and benefits of participating in the ISO-New England markets.”
It was widely misunderstood. “People interpreted that as physically leaving the grid,” Dykes said a year later. “Ratepayers have gotten a lot of benefits of more reliable and affordable power by participating in a regional grid.”
What she had been talking about was a market paradigm the ISO uses to purchase power for the grid. Not much more than a year later, she is still talking about it. And with nothing short of evangelical zeal and little deference to a potentially paralyzing pandemic, Dykes has commandeered the other five New England states, the ISO, system stakeholders and more than a little national interest into a bona fide effort to figure out how to increase renewable power, decrease the use of fossil fuels and lower costs — or at least not let them go through the roof — and keep everyone on civil terms with each other.
“Our goal has been to ensure that we have an electricity supply that is meeting our carbon goals, that’s affordable and that’s reliable,” she said.
And that, she has also said repeatedly, means the grid needs to change.
A blueprint called the New England Energy Vision was unveiled in October, signed by all six states through the New England States Committee on Electricity (NESCOE), which represents the six New England governors’ electricity interests. The Energy Vision launched a series of online public forums featuring experts on the key areas the states felt needed overhaul: the wholesale market, transmission and governance. A fourth on equity and environmental justice was added later. The forums have generated a blizzard of documents, presentations, studies, comments and more — all laden with an alphabet soup of acronyms.
While success is not guaranteed, the effort is now bolstered by a new administration in Washington that is already making ambitious moves to deal with climate change including appointing new leadership at the Federal Energy Regulatory Commission, which regulates the ISO-NE and other grid operators.
Looking broadly at the issues that are driving what Dykes considers New England’s key problems is high up on FERC’s agenda. In March, FERC began a series of technical meetings on topics that include the market structures Dykes is complaining about.
The recent power crisis in Texas has provided extra heft by illuminating potential hazards for a grid that does not operate properly.
ISO 101
The ISO for New England, which is actually a non-profit RTO – a Regional Transmission Organization – has three main functions today: operating the transmission portion of the grid, running the wholesale markets that supply power for the grid, and doing the long-term planning for both.
The ISO-NE did not have all of those functions when it came into existence as part of deregulation in the late 1990s. Over its first 10 years, the ISO evolved from a regional power operator into one that also ran competitive wholesale electric markets and the regional transmission system — those tall power lines, not the ones that come to your house.
But it wasn’t until 2008 that it began operating what’s called the Forward Capacity Market (FCM). It’s the mechanism the ISO uses to purchase future energy resources three years in advance. It was envisioned to give the ISO the security that power will be there and to provide a commitment to potential new power sources so they can get financed and built, though not all are.
Up until 2008, states were deciding what future power they wanted, and the focus was still mostly on supporting a classic centralized grid, which has big so-called baseload power plants and long power lines crisscrossing the region. How clean the power was, from the standpoint of standard pollutants, as well as cost were the big considerations, so the push was to convert from coal and oil to natural gas.