States want federal help to deal with power grid operator
Tong, others say consumers paying millions more than they should
Connecticut Attorney General William Tong is blaming New England’s regional power grid for continued high electric rates in the state, saying ISO-New England failed to follow a competitive bidding process as is required law.
Tong has joined officials in Massachusetts and Maine in asking the Federal Energy Regulatory Commission to force the Holyoke, Mass.based grid operator to do competitive bidding in the development of transmission lines.
“Connecticut is plagued with some of the highest energy costs in the nation, and families and businesses simply cannot afford these bloated contracts,” Tong said in a statement released Thursday. “Restoring competition to this broken system could save ratepayers millions of dollars while also opening doors to improved energy efficiency and use of renewable technologies. ISO-NE has evaded the competitive bidding process, and this practice needs to end.”
Matt Kakley, a spokesman for ISO-NE, on Friday defended the grid operator’s actions.
“ISO New England’s transmission planning process has resulted in significant improvements to the regional transmission system, increasing reliability, providing access to lower cost resources, and enabling the retirement of older fossil fuel plants” Kakley said in a statement. “Among these improvements were upgrades in Southwest Connecticut that effectively eliminated congestion costs for the region, and primarily for Connecticut consumers.”
Tong was joined by Massachusetts Attorney General Maura Healey and Maine Public Advocate Barry Hobbins in signing onto the letter to FERC. Also signing onto the letter were Katie Dykes, commissioner of the Connecticut Department of Energy and Environmental Protection, as well as Richard
Sobelewski, the state’s acting consumer counsel.
Healey said in a statement that the way ISO-NE operates when it comes to transmission line work “has cost ratepayers across the region millions of dollars.”
“Allowing for competition will help support our transition to a cleaner, reliable energy system” she said.
Dykes said “ratepayers have been waiting for years to get the benefit of a competitive process.”
“Competitive processes could also enable the incorporation of new technologies to provide a more efficient and resilient grid,” she said. “It’s time for ISONE to move that forward.”
But Kakley said that “contrary to these parties’ assertions, ISO New England has properly applied its federally-approved tariff.”
FERC officials weren’t immediately available for comment.
The letter to federal energy regulators is the latest volley in an ongoing dispute between the Connecticut officials and ISO-NE.
Dykes said during an energy forum at Trinity College in Hartford in midJanuary that Connecticut is being hurt by “a lack of leadership at the grid operator.”
“We are at the mercy of a regional capacity market that is driving investment in more natural gas and fossil fuel power plants that we don’t want and we don’t need,” Dykes said. “This is forcing us to take a serious look at the cost and benefits of participating in the ISO New England markets.”
Building new electric transmission grids accounts for approximately 20 percent of the cost of running the regional electric grid, according to Connecticut officials. Investment of approximately $1.3 billion is planned for the near future, with 67 various projects planned, proposed or under construction currently, they said.
Sources told Hearst Connecticut Media Thursday that a detailed white paper assessing the pros and cons of the state’s relationship with ISO-NE — and what would be involved in exiting the regional power market — likely will be released soon.
Regional transmission grid operators were created to assure that massive regional blackouts, like the one that hit the Northeast in 1965 never occurred again.
In addition to protecting the reliability of New England’s power grid, ISO-NE also oversees what is known as the forward capacity market. That market is designed to assure the region has adequate power supplies years in advance of when they are needed.
Paul Chernick, president of Research Insight, an Arlington, Mass.-based consulting firm that specializes in the regulation of electric and gas utilities, said friction between ISONE and its members isn’t that unusual.
State officials in the region believe the grid operator isn’t tough enough in dealing with the electric generating companies that bid into the market and that the region’s transmission grid shouldn’t cost as much as it does. But Chernick said ISO-NE is doing a good job in making sure the region’s power grid is reliable.
“I don’t have any inside knowledge of this, but this could be a negotiating tactic by the states to get more of what they want,” he said.
It’s highly unlikely, according to Chernick, that Connecticut would sever its relationship entirely with ISO-NE — or even be allowed to by the federal government. But it is possible Connecticut officials could determine it is in the state’s best interest to exit the forward capacity market, he said.