Myth vs. reality: region’s energy exec. issues warning

There was a clear message last week from the head of regional grid operator – New England’s energy challenges are not behind us. “We’ve been very fortunate to have a mild winter thus far,” said ISO-NE CEO Gordon van Welie in a call with reporters last week. “But that’s not something that we can count on in the future.”

gas transitions

New England’s volatile wholesale electricity prices follow those of natural gas. As this chart illustrates, natural gas has become the predominant source of fuel for power plants in the region. Source: ISO-NE.

Those mild temperatures, which have helped to ease the pressure on wholesale natural gas and power prices this winter, were prompting some to declare in haste that New England’s energy crisis is over. The reality is that the need for new energy supply and infrastructure is just as great, if not greater, today than it was a year ago.

The next several years will to see more power plant retirements, uncertainty for new energy projects, and prices that reflect volatile commodity markets. In the meantime, New England families and business owners will pay the price of a market in transition.


Dave Solomon’s Power Plays: Power man sounds alarm on system’s demands
New Hampshire Union Leader, 22 January 2015

New England’s energy threatened by natural gas line capacity
New Haven Register, 22 January 2015

Winter energy ‘crisis’ fizzles
Nashua Telegraph, 22 January 2015

Good news for Maine, NH has to wait CMP rate decrease a pleasant surprise
Foster’s Daily Democrat, 22 January 2015

Winter energy crisis averted, but long-term strategy still needed
Bangor Daily News, 21 January 2015

Power grid operator: Without more natural gas, electricity prices will stay erratic
Nashua Telegraph, 22 January 2015

Charlie Baker should focus on wind
Boston Globe, 22 January 2015

State of the Grid: Managing a System in Transition
ISO-New England, 21 January 2015

Poliquin says natural gas could help save Maine mills
AP via WCSH, 22 January 2015

Despite Industry Changes, Energy Questions Linger
Business NH Magazine, 21 January 2015

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The false promise of falling prices

It’s easy to be fooled by recent headlines about falling energy prices, but make no mistake – New England’s energy challenges are still very real. The region’s electricity prices, which are the highest in the nation, continue to be at the mercy of volatile commodities driven by supply and demand.

Luck appears to be on New England’s side this winter. Milder temperatures have lowered demand for power compared to last year. On the days that have dipped below zero, there was an adequate supply of fuel for power plants thanks, in part, to ISO-New England’s Winter Reliability Program. Current wholesale prices even mean some customers in Maine are catching a break with their seasonal rates.

Winter fuel mix chart for EB

This chart shows the amount of power, in megawatt hours (MWh) generated by source on January 1, when it was 23 degrees, compared to January 8, when it was 6 degrees. Note the dramatic increase in the use of gas, coal, and oil to meet demand for the colder day. Source: ISO-NE

The energy markets are also reacting to this winter’s dramatic change in oil prices. Cheap oil keeps natural gas prices low by providing a more affordable alternative fuel during times of high demand. It also brings down the cost of importing LNG, which has figured more prominently in to New England’s fuel supply this winter.

In the short term, lower oil prices may seem like good news. But looking long term, relying too heavily on a commodity like oil or natural gas can be risky to consumers who are paying for last year’s high demand and short supply. New Englanders will continue to pay extremely high energy rates until the region diversifies sources of power and ensures adequate supplies of fuel at all times of the year.


Electricity prices fall
CommonWealth Magazine, 12 January 2015

New England has most expensive wholesale electricity in nation
New Haven Register, 12 January 2015

England’s natural gas dependence rose in 2014
Hartford Business Journal, 13 January 2015

Dave Solomon’s Power Plays: What crisis? Prices, supply not a concern in 2015
New Hampshire Union Leader, 15 January 2015

Resources’ participation in 2014/2015 Winter Reliability Program improves fuel adequacy this winter
ISO Newswire, 12 January 2015

Price pain turns to gain for many of CMP’s customers
Portland Press Herald, 13 January 2015

What’s happening to oil prices?
Boston Globe, 6 January 2015

Oil Plunge Boosts U.S. Natural Gas Imports to 7-Year High
Bloomberg, 9 January 2015

Column: Why Electricity Costs Spiked
Valley News, 18 January 2015

Haddad files energy bill
CommonWealth Magazine, 16 January 2015

It’s time for answers to state’s energy crunch
Lowell Sun, 15 January 2015

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Passing the test?

The region experienced its first arctic cold snap last week – a major test of New England’s electrical grid since losing the power supplied by Vermont Yankee nuclear power station, which retired at the end of December. So what happened?

To the casual observer, not much felt different other than the frigid temperatures. The lights stayed on and, though prices edged higher, the wholesale cost of electricity was far lower than it was last year during the so-called “polar vortex.” But a closer look shows what went into keeping the juice flowing.

fuel mix 1-8-15

The mix of sources used to generate electricity in New England, just before 7AM, January 8th, which included more coal and oil than usual. Before Vermont Yankee closed, an average fuel mix also included more nuclear. Source: ISO-New England ISO to Go app.

Much more of New England’s power came from firing up coal and oil plants. During extremely cold periods, as the demand for both electricity and for heat goes up, so does the cost of natural gas. Coal and, especially, oil cost less than natural gas to generate electricity during this period and made up much more of the mix than usual.

These existing power plants are critical to ensure grid reliability and temper wild price swings during periods of extreme cold or peak-electricity use. At the same time, as the New England states look for long term solutions that also help meet carbon reduction goals, both public and private sector leaders are calling for a balanced approach that includes the infrastructure needed to access increased supplies of natural gas and clean, renewable energy.


Outlook: New England gas demand set to rise
Argus Media, 2 January 2015

“The closure of the Vermont Yankee nuclear power plant could boost New England natural gas prices this winter, with heating demand expected to reach peak levels in coming weeks.”

Arctic Blast Boosts Spot Power on PJM to 10-Month High
Bloomberg, 8 January 2015

“In the Northeast, average spot prices at the hub serving Boston and Northeast Massachusetts were up 1.8 percent at $111.30 a megawatt-hour as of 5 p.m.”

New England power grid forced to deploy oil units
Argus Media, 8 January 2015

“The New England power grid has dispatched oil-fired units more often than normal in the past two days as electricity demand surged amid cold weather and natural gas prices in the region topped those for fuel oil.”

BIA stresses policies beneficial to NH economy
Union Leader, 5 January 2015

“The energy positions include advocacy for policies that ensure reliability and lowering the long- and short-term costs of energy, with positions including efforts to alleviate ‘the current regional energy crisis, advocate for state and regional policies and initiatives that enable the development of low cost, reliable sources of energy, e.g. expanded natural gas pipeline capacity and increased electrical transmission into the region.’”

State-funded report recommends big increase in gas pipeline capacity
Boston Globe, 8 January 2015

“The report looked at various scenarios — allowing for major new power lines from Canada, for example — to come up with a range of 0.6 billion to 0.8 billion cubic feet per day of additional gas pipeline capacity for Massachusetts in 2020.”

Utilities agree to provide power line access to Aroostook wind farm
Portland Press Herald, 7 January 2015

“The agreement between Central Maine Power and Emera Maine is the first of several transmission projects the two companies are jointly pursuing to address transmission congestion issues that must be solved to bring large-scale renewable generation into the region.”

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The end of an era

The end of the year also brought the end of an era for energy in New England as the Vermont Yankee nuclear power station powered down its reactor for the final time. The plant’s closure inspired a number of articles and editorials reflecting on VY’s economic impact, nuclear as a power source, and the future of the region’s strained power system; it was the third generator on the grid to close in 2014, following Salem Harbor and Mt. Tom coal plants in Massachusetts earlier in the year.

Where does New England’s power grid go from here? It’s a topic that will likely be at the center of continued debate in 2015 as the region ponders proposals for new natural gas pipelines and the integration of more renewable resources. It’s also a discussion that has a sense of urgency, considering the recent power plant retirements, noticeably higher electricity prices, and the continued effect of a constrained supply on New England’s energy market.

2014 retirements

New England lost three sources of power in 2014. Other power plants are scheduled to close or are at risk of retiring by the end of the decade.

Mixed reaction as Vermont Yankee plant shuts down
Boston Globe, 29 December 2014

Three States Shoulder Economic Burden Of VT Yankee’s Closure
New England Public Radio, 24 December 2014

Vermont Yankee nuclear reactor shutdown does not end debate: Editorial
Springfield Republican, 31 December 2014

Maine and Vermont’s Yankee connection: Nuclear shutdown, natural gas, dry casks
Bangor Daily News, 1 January 2015

Pipeline politics
Worcester Telegram & Gazette, 31 December 2015

Pipeline push gets a second wind
New Hampshire Union Leader, 25 December 2014

Americans Want America To Run On Solar and Wind
Forbes, 1 January 2015

Fuel prices fall, electricity rises: Confused about energy costs?
Providence Journal, 1 January 2015

Wholesale electricity prices and demand in New England
ISO-Newswire, 22 December 2015

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Rising rates, important debates

GREEN_Elect_Rates Chart

New England’s energy challenges are driving up rates for all utilities, compared to last winter.

As the weather cools off, the debate over energy projects is heating up. Whether it’s natural gas pipelines, wind farms, or just about anything else, one energy consultant says we’ve gone BANANAs (meaning Build Absolutely Nothing Anywhere Near Anything).

The difficulty in finding consensus is getting heightened attention as the region’s energy crisis drives up electric bills and raises the possibility of rolling blackouts. Yet, despite the climate of opposition, both project developers and policy makers in the region continue to work to solve these challenges before they become worse.

(The links below are referenced above)

Mike Marland Editorial Cartoon
Concord Monitor, Dec. 21, 2014

For help responding to pipeline plan, local residents look south
Keene Sentinel, 16 December 2014

“The New Hampshire towns affected include five in Cheshire County —Fitzwilliam, Richmond, Rindge, Troy and Winchester where residents and town officials have already begun to look to Massachusetts anti-pipeline activists for help.”

Opposition lines up against new Alexandria wind plant proposal
Union Leader, 16 December 2014

“Whitlock said the company understood there was opposition to Spruce Wind already in place, in part from opponents of wind-energy plants in the area who take credit for playing a role in chasing away a previous wind-energy project from the area.”

New energy projects face long road ahead
Union Leader, 10 December 2014

“Michael Harrington, a former commissioner of the New Hampshire Public Utilities Commission and now an independent energy consultant, put it this way: ‘It’s so difficult to build in New England we are now BANANAS,’ he said in an interview between presentations.”

Pipeline And Nuclear Shortages Send New England’s Utility Bills Soaring
Forbes, 17 December 2014

“Not sure why New Englanders are so surprised. It was their choice to throw all-in for natural gas and renewables in a land of harsh winters. But they’ve refused to build new gas pipelines. And they’re shutting a nuclear plant that has 20 years of cheap reliable cold-resistant energy left on it.”

Despite outcry over hike in R.I. electric rates, National Grid tells state panel it has no choice
Providence Journal, 16 December 2014

“While the price of power alone is going up 54 percent in Rhode Island, the increase is even steeper in other parts of the region. Rates in Massachusetts have gone up between 59 and 99 percent, while rates charged by one utility in New Hampshire have more than doubled.”

Donnelly: Who’s afraid of rolling blackouts?
MASSter List, December 18 2014

“Rolling blackouts? It sounds like an alarmist comment from some kind of survivalist. But the rolling blackout concern came from the most sober of energy institutions, ISO New England, which is charged with ensuring the reliability of New England’s power grid. And ISO New England is worried about 2016.”

Editorial: Power plant plan deserved a fair hearing
Eagle Tribune, 17 December 2014

“No one wants a power plant in their back yard — and that’s the problem. We all need and use electricity. Well, electricity does not appear by magic. It comes from power plants.”

William A. Walaska: Fighting R.I.’s soaring energy bills
Providence Journal, 14 December 2014

“Addressing these challenges requires a coordinated regional effort. That is why, in December 2013, Gov. Lincoln Chafee joined with all the New England governors to create the Regional Energy Infrastructure Initiative to advance regional infrastructure investments and diversify our energy sources. Critical to the success of this initiative is participation by all New England states.”

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Locating our energy future

We are still more than two weeks away from the end of the year, but some are already declaring 2015 the year of energy. Looking around New England, one can see why. After repeated calls from business leaders, and warnings from power companies, the region is seeing a number of energy proposals come forward.

Some would be located in Maine, some in Vermont, and some in New Hampshire. These projects would expand natural gas pipelines or deliver hydropower and wind energy via transmission lines. In Massachusetts, policy makers are pushing for more incentives to get at least one of these projects built.

New England’s energy challenges require a comprehensive solution. Regardless of which projects get final approval it is clear that the region’s energy future depends on all states working together, and that Northern New England will play an important role.

(The links below are referenced above)

2015 predictions: The year of energy
Electric Light & Power, 10 December 2014

In 2015, utilities will shift their perspective on solar and other alternative sources of energy, and it won’t happen just because of new regulations. They’ll have to offer these resources; if they don’t, they will lose customers to independent renewables providers.

Economic Development Council in favor of increased natural gas capacity in New England
Springfield Republican, 9 December 2014

A shortage of natural gas to fuel power plants, heat homes and power industry could stifle the economy in Western Massachusetts, according to a position statement issued Tuesday by the Economic Development Council of Western Massachusetts.

Utility leaders: We need natural gas pipeline to contain electricity prices
Concord Monitor, 11 December 2014

“It’s pretty simple. We’ve got renewables, we’ve got all kinds of solutions, but at the end of the day, if you want to knock these prices down, if you want to buffer them for the long term, a natural gas pipeline has got to come into the state,” said Daniel Saad, president of Liberty Utilities.

New plan to join wind power with hydropower enters the mix of New England energy proposals
Nashua Telegraph, 10 December 2014

These two separate projects, each of which would cost at least a billion dollars and not be ready until 2019 at the earliest, are part of the large-scale debate over how New England should deal with spiking winter electricity rates, a function of the region’s dependence on natural gas.

National Grid joins hydropower rush
Boston Globe, 9 December 2014

National Grid has partnered with the electricity transmission developer Anbaric Transmission to propose an undersea cable that would bring Maine wind power and Canadian hydroelectricity to Massachusetts.

Natural gas pipeline path through New Hampshire formally introduced to the feds
Concord Monitor, 8 December 2014

The proposed project would expand the natural gas infrastructure of Kinder Morgan subsidiary Tennessee Gas Pipeline Co. to help meet the Northeast’s growing energy needs, the company said.

Firm files for power line under lake
Valley News, 9 December 2014

A company that wants to bring Canadian power to New England through a new line under Lake Champlain formally asked the Vermont Public Service Board on Monday for approval.

Patrick makes a push to help hydropower
Boston Globe, 9 December 2014

Patrick’s top environmental aides are working feverishly on new rules that could compel electric utilities to buy a certain amount of energy from Canada’s big hydro plants.

Even Before Long Winter Begins, Energy Bills Send Shivers in New England
New York Times, 13 December 2014

These latest increases are salt in the wound. New England already pays the highest electricity rates of any region in the 48 contiguous states because it has no fossil fuels of its own and has to import all of its oil, gas and coal.

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Powerful Collaboration

hq tday storm

A lineman from Hydro Quebec works to restore power in NH after the Thanksgiving snowstorm. Nearly 200 workers from the utility responded.

Wholesale power prices in October went in the record books as the sixth lowest since ISO-New England started keeping track. But much like with the dropping price of gas at the pump, one has to wonder, “How long will it last?” Wholesale energy prices are fueled by natural gas prices. In 2014, the year started with high demand and short supply which caused record prices. Last week the Energy Information Administration reported that natural gas prices are higher and particularly volatile in New England, indicating future volatility in electricity markets.

Business leaders say this volatility is unsustainable and creates concern over the health of New Hampshire’s economy. The calls for solutions to New England’s energy challenges are growing louder, especially as utility bills creep higher.

Yet, New England, and especially New Hampshire, has a history of collaboration and finding consensus when overcoming challenges. The storm that struck just before Thanksgiving left hundreds of thousands without power on the holiday. But state officials credit the lessons learned from past storms – and improvements made over the years as a result – with significantly lessening the impacts. Collaboration across state and even international borders proved essential in speeding up restoration efforts.

N. England power prices among lowest on record
Hartford Business Journal, 2 December 2014

“The swing between the two months is largely attributable to the volatility in the cost of natural gas, which generates more electricity in New England than any other fuel.”

Natural Gas Weekly Update
Energy Information Administration, 4 December 2014

“As snow and temperatures fell this week, natural gas prices rose at many locations across the nation. Of particular note, spot prices at Algonquin Citygate, which serves Boston, and Transcontinental Pipeline Zone 6 (Transco Z6 NY), serving New York City, both reached their highest levels so far this winter.”

We’ve got to address the energy crisis now
New Hampshire Business Review, 1 December 2014

“New Hampshire, like several other New England states, is suffering from an energy shortage, both of electricity and natural gas. These shortages are raising the unit cost of each energy source to an unacceptable level.”

Charles Arlinghaus: Stagnation need not be NH’s destiny
New Hampshire Union Leader, 2 December 2014

“Most troubling, and the biggest roadblock we currently face, comes from our highest-in-the nation energy costs.”

Costs to ratepayers keep piling up, but who is listening?
Keene Sentinel, 29 November 2014

“We need our elected officials to stand up for ratepayers by carefully reviewing current policies and their cumulative economic impacts. They need to clear the path for new energy projects that could relieve New England ratepayers from needlessly sending billions of dollars out of our economy every year, and let these projects move forward as inexpensively as possible.”

Utilities Say Storm Recovery Shows Lessons Learned
NHPR, 1 December 2014

“Plummer notes for most customers power came back to dramatically faster than during the so-called ‘Snowtober’ storm in 2011. In that storm, which had slightly more customers without power, utilities took six days to get back to normal operation.”

Hassan bids adieu to Canadian utility crews that helped restore power after Thanksgiving storm
Concord Monitor, 1 December 2014

“Late on Thanksgiving Day, more than 120 Hydro-Quebec workers began streaming across the Canadian border into New Hampshire to help Public Service of New Hampshire restore customers’ power.”

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How many times have you heard or read these phrases in the last week: energy crisis, higher rates, natural gas pipeline, and wholesale market? Chances are you’ve come across them more than you realize and, certainly, more than you have in the past. Maybe you’ve even brought these topics up in conversation for the first time with your friends or co-workers.

New England’s energy challenges have gotten plenty of attention and the conversation is now moving from, “How did we get here?” to “What needs to happen?” Below is a sample of some of the articles and reports published in recent weeks that discuss how New England might begin to ease the crunch between the region’s needs and its precarious supply.

november gas price spikes

Wholesale natural gas prices in New England are set by Algonquin Citygate. Below-average temperatures in the latter half of the month drove those prices noticeably higher. Source: Energy Information Administration

2014/2015 winter outlook: sufficient power supplies expected, but natural gas pipeline constraints a concern
ISO Newswire, 20 November 2014

“The New England region should have sufficient resources in place this winter to meet consumer demand for electricity; however, insufficient pipeline capacity to meet power generators’ demand for natural gas continues to be a particular concern during the winter months. The retirement of several non-natural-gas-fired power plants since last winter also is a concern.”

Bedford panelists lament region in energy crunch, solution years away
New Hampshire Union Leader, 19 November 2014

“New England governors last year launched an ambitious initiative to finance new pipeline construction at ratepayer expense, but the Massachusetts legislature balked at that plan, which is now in limbo.
The panelists lamented the fact that New England seems incapable of building a consensus around any solution, while other regions of the country are awash in cheap energy.”

With Energy System Strained, New England May Face Rolling Blackouts
WGBH/WCAI, 17 November 2014

“He said the problem just gets worse with every nuclear, coal or oil plant that closes, because it leaves too few power plants generating electricity. He says if the Salem natural gas plant isn’t built by 2016, projections show greater Boston isn’t guaranteed to have enough electricity on peak demand days. There are many steps ISO-New England can take if that actually happens – but in extreme cases operators may have to rely on rolling blackouts as a last resort.”

New England’s Looming ‘Energy Crisis’
Nuclear Energy Institute, 18 November 2014

“These price and reliability challenges will only be exacerbated by the closure of Vermont Yankee. Noting the large electricity rate hikes that utilities across New England already have announced in anticipation of Vermont Yankee’s closing, author and energy expert Jim Conca says that the nuclear plant’s presence helped to mask the underlying rise in wholesale gas prices—a natural result of demand outstripping supply.”

PSNH president: NH electricity rates on seasonal roller coaster
Concord Monitor, 18 November 2014

“’The next winter or two, unfortunately . . . we’re going to see high prices in the market,’ Quinlan told the Monitor in a recent interview, which focused on the state’s energy outlook. ‘The good thing is, I think this is a solvable challenge.’”

Paying for Power: Who Controls the Price of Electricity, 13 November 2014

“GMP generates some of its own power at its Kingdom Community Wind Plant, and has long-term supply contracts with companies like Hydro-Quebec. That means they don’t buy as much energy from other suppliers each year.
‘So the way we manage our power supply with our own sources and long-term power contracts really helps keep our prices much more stable,’ Schnure said. ‘And we’re not exposed to the volatility of the market.’”

N.H. utilities pledge to help customers
Eagle Tribune, 17 November 2014

“As electric rates in Southern New Hampshire soar this fall, the state’s utilities say they’re trying to lessen the impact on customers.
That’s because the impact will be significant, with some rates increasing between 29 and 50 percent.”

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The Cost of Energy Challenges

New Hampshire has long prided itself as a great place to live and a friendly place to start a business. Our lack of a sales or income tax is often touted as the “New Hampshire Advantage.” But that advantage is threatened. This week, Forbes released its annual list of Best States to Do Business. New Hampshire came in at 35. Forbes cited high energy costs as one of the reasons for the ranking.

The business community has become increasingly vocal about the effects rising electricity costs are having on their ability to thrive in New Hampshire. The head of the Business and Industry Association, in fact, says high electricity rates are the most pressing issue for state businesses.


Energy constrained New England states, where power prices are high and supply is volatile, generally rank poorly on the Forbes list.

(The following links are referenced in the above communication)

Best States for Business

NH Friday News Round-up

New Hampshire’s energy future in ‘crisis’
New Hampshire Sunday News

Rising electric costs could crush NH economy
New Hampshire Business Review

Business representatives predict upcoming legislative action
Concord Monitor

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The Waiting Game – How Long and How Much?

Every year, the group that runs our electrical grid, ISO-New England, releases a report that projects the region’s power needs and what must be done to meet those needs in the next ten years. That report, called the 2014 Regional System Plan, was released by ISO New England last week. In it, the regional grid operator echoes the sobering news we’ve been reading lately – we have significant energy challenges that aren’t going away anytime soon.

iso interconnection queue by resource

More than half of the megawatts projected to come on line in the next several years would be produced by natural gas and nearly a third would originate from wind. This chart does not include proposed transmission upgrades which would increase the amount of power available to the grid without necessarily requiring new generation.

The report pointed to several factors that are expected to again bring us higher energy prices this winter, including another year of limited natural gas pipeline capacity. The report also notes that advances in energy efficiency will slow the growth of electricity use over the next ten years, but New England still needs new sources of power to replace the large number of generating plants that are scheduled to retire.

Several proposals on the table would help address the problem, including plans to increase supplies of natural gas and clean energy, but it will be several years before any is brought online. That’s a long time to expect high prices and uncertainty about the reliability of our grid. Until then, the region remains in the midst of a cold and expensive waiting game.


2014 Regional System Plan
ISO-New England, 6 November 2014

Electricity prices will spike this winter, grid operators warn
New Haven Register, 6 November 2014

New power plants needed to offset closings
CommonWealth Magazine, 6 November 2014

NU Earnings Up 12% In Quarter, 6 November 2014

Power prices to stay high, report says
Boston Globe, 5 November 2014

Natural Gas Soars On Fears of a Polar Redux
Wall Street Journal, 4 November 2014

New England Electricity Prices Spike As Gas Pipelines Lag
NHPR, 5 November 2014

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