Recently, the New England Power Generators Association (NEPGA) filed a complaint with the Federal Energy Regulatory Commission (FERC) regarding concerns it has with the design of ISO New England’s Forward Capacity Market. The complaint also includes several important comments from the trade group on the state of the regional energy market and its future reliability.
In the complaint, NEPGA states New England is facing an “impending reliability crisis” and that the regional energy market is in “distress” as the retirement of existing power plants is expected to create a “shortfall of more than 1500 megawatts in the next forward capacity auction,” which is a process ISO uses to incent development of assets needed for future energy needs.
NEPGA also states that absent changes to the market, it expects “the continuing retirement of economic resources, erosion of critical fuel diversity in the region, higher long term costs to consumers.”
We are pleased to see NEPGA is finally recognizing the significant challenges facing the regional energy market. We have made the case for more than two years that New England’s growing over-reliance on natural gas and the projected loss of 8000 megawatts of generation assets threatens the reliable operation of the grid and exposes customers to volatile prices and higher costs.
Northern Pass is a real and practical solution to the region’s energy challenges that will also bring direct and substantial economic benefits to New Hampshire. The project will deliver 1200 megawatts of clean, low-cost hydropower to New Hampshire, reducing energy costs and providing the region with much needed fuel diversity. Northern Pass stands alone as the only proposed source of new base load energy that is in a position to help the region meet its future energy needs.
The Federal Energy Regulatory Commission (FERC) has denied the NH PUC’s request for a rehearing on the Transmission Service Agreement (TSA) between Northern Pass and Hydro Quebec.
The TSA spells out how costs associated with the project are dealt with and was approved by FERC back in February of this year.
The agreement, spelling out how costs associated with the project are dealt with, was recently approved by the Federal Energy Regulatory Commission.
Read the Order here.
The acronyms stand for Transmission Service Agreement and Federal Energy Regulatory Commission. The filing is a key step for the project.
The TSA was filed December 15 and basically sets out the rules of the road for the use of the transmission line once it is in service. The FERC must approve the agreement in order for the project to move forward.
There’s a lot of material available, including a press release, here, and the full (703 pages!) filing, here. One item of interest within the large filing is a report by Charles River Associates that focuses on the impact Northern Pass will have on regional energy prices in New England. An excerpt:
“…the additional capacity that will be provided by NPT will reduce congestion by allowing more power to be delivered during the hours when prices are highest and to the market where the power is valued most. The result of the congestion relief will be lower ISO-NE prices, lower fossil-fueled generation in New England, reduced production costs, and lower costs of wholesale power purchased through the New England market…”
(page 672 of the .pdf; page 18 of the CRA report. Page 651 of the full .pdf marks the beginning of the CRA report.)