Members of the Federal Energy Regulatory Commission on Thursday continued to raise concerns about ISO New England’s ability to get through tough winter weather when the region’s natural gas-fired power plants may not have enough fuel to run.
FERC Chairman Richard Glick started the agency’s monthly meeting by noting that California’s grid operator managed record-breaking heat earlier this month without rolling blackouts, partly due to demand response, energy storage and imports from neighboring areas.
Glick then pivoted to New England’s wintertime reliability problems, which was the subject of a FERC technical conference in Burlington, Vermont, this month.
“The region is still heavily reliant on [liquefied natural gas] imports, and that's just not sustainable,” Glick said. “It might be in the short term, it might be necessary to continue that reliance, but in the long term, it's just not sustainable.”
New England has options such as additional transmission lines and non-gas-fired generation like offshore wind, Glick said.
Also, ISO-NE may need to consider market changes, according to Glick.
“It's very important to consider market changes, such as a seasonal market to incentivize generators to make arrangements that provide more assurance that there's going to be fuel supply when it's needed,” Glick said.
Other commissioners echoed Glick’s comments.
“The situation is dire,” FERC Commissioner James Danly said, adding that he doubts ISO-NE’s capacity market is providing for an adequate power supply or that it is producing just and reasonable rates.
FERC may need to consider shifting the responsibility for maintaining adequate power supplies from ISO-NE to the region’s six states, according to Danly.
FERC Commissioner Allison Clements said the agency needs to take a leadership role in addressing wintertime reliability issues in New England, a region that relies on gas for its power plant fleet but has limited pipeline capacity.
“There is no reason the commission should stop pressing the region or delay further action on the elements of the solution that are within our authority,” Clements said, noting New England has been grappling with reliability questions for nearly two decades.
Like other commissioners, Clements urged stakeholders to respond to FERC’s request for comments in response to the technical conference. Clements asked stakeholders to share their views on ISO-NE’s planned analysis of New England’s resource adequacy challenges, possible market reforms and potential non-market solutions.
At least one commissioner raised broad concerns about grid operators’ ability to deal with reliability risks.
It appears that organized power markets like ISO-NE may not be able to provide adequate grid reliability, according to FERC Commissioner Mark Christie.
Meanwhile, FERC on Thursday directed ISO-NE to respond to a recent appeals court decision that partly struck down FERC’s approval of a plan to pay power plant owners in New England an incentive to have three-days worth of on-site fuel during two upcoming winters.
The U.S. Court of Appeals for the District of Columbia Circuit rejected allowing an estimated $40 million a year in “windfall payments” to coal, hydroelectric, biomass and nuclear generators as part of ISO-NE’s Inventoried Energy Program, saying the incentive wouldn’t affect their behavior. Payments to other types of generators, like gas-fired power plants or oil-burning units, can go forward under the ruling.
FERC gave ISO-NE 60 days to refile its program in line with the court’s decision.
