We use cookies to provide you with a better experience. By continuing to browse this site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • RTO Insider
    • CAISO
    • ERCOT
    • MISO
    • PJM
    • ISO-NE
    • NYISO
    • SPP
    • FERC & Federal
  • ERO Insider
    • NERC & Committees
    • FERC & Federal
    • Regional Entities
    • Standards/Programs
  • NetZero Insider
    • Federal Policy
    • State & Local Policy
    • Building Decarbonization
    • Transportation Decarbonization
    • Transmission & Distribution
    • Generation & Fuels
    • Equity & Economics
    • Technology
  • Calendar
    • RTO Insider Events
    • ERO Insider Events
    • NetZero Insider Events
  • July 05, 2022
  • Log In
  • Register
  • Log Out
  • My Account
  • Subscribe
  • July 05, 2022
July 05, 2022
  • Log In
  • Register
  • Log Out
  • My Account
Home » Overheard at NECA Power Markets: 'Unqualified Reliability’ is Out

Overheard at NECA Power Markets: 'Unqualified Reliability’ is Out

Electric-Vehicle-(Chevrolet)-Alt-FI.jpg
Vermont DPS Commissioner June Tierney says affordability is a necessary part of the lexicon for power market development so that prices can encourage beneficial customer behaviors, such as buying electric vehicles or heat pumps. | Chevrolet
Nov 17, 2021
Jennifer Delony

In the stakeholder conversations on power market development, the phrases most often used these days are transformation, transition to clean energy and momentous change, said Sheila Keane, director of analysis at New England States Committee on Electricity.

And with big changes comes a lot of uncertainty, Keane said at the Northeast Energy and Commerce Association’s Power Markets Conference on Tuesday. Keane moderated a panel on power market developments in New England with perspectives from experts representing generators, transmission owners, clean energy advocates and consumers.

Vermont Department of Public Service Commissioner June Tierney set the mood for the panel in a keynote speech that highlighted the challenges in current market conditions and set the priorities she sees for market development.

“Reaching our carbon-free future requires that we make new choices in designing the markets that will take us to our decarbonized future — new choices that are more respectful of the laws enacted by our New England states,” she said.

Doing so, she added, is complicated and messy, and everyone will not always agree or be happy.

The ISO’s core job can no longer be “unqualified reliability,” Tierney said. Instead, it must “achieve reliability, fueled by renewability with a keen eye on affordability,” she said. “That is what the sovereign New England states want because that is what their people need.”

Affordability, she said, is a necessary part of the lexicon for power market development. On the path to what some people call “beneficial electrification,” prices must encourage beneficial customer behaviors, such as buying an electric vehicle or heat pump, she said.

Expert Views

ISO-NE acknowledges that “things need to change,” as evidenced by its proposal to eliminate the Minimum Offer Price Rule (MOPR), Andrew Gillespie, director of market development at ISO-NE, said during the panel discussion.

“Our proposal is not only to remove the MOPR, but to adjust the demand curve to account for the impact on the cost of capital to supply, including the existing generators,” Gillespie said. “We feel that that is the middle of the road.”

The ISO, he said, is trying to find common ground, and it recognizes the “changing nature” of the fleet and that environmental issues are the driver of the change.

As New England states push for electrification in heating and transportation, the grid needs to procure more significant amounts of clean energy to meet climate goals, said Priya Gandbhir, staff attorney at Conservation Law Foundation.

“I think that the ISO is aware of its role in achieving these goals, and it certainly seems on their list of to-dos, but it’s unclear whether the level to which the ISO prioritizes these issues is strong enough,” she said.

CLF and its partners, she said, are prepared to push the ISO and states to make the necessary changes that will ensure sectoral transitions are supported by a clean grid.

Looking to the future of New England’s electricity system, the question will not be whether the generation mix will be clean, said Rebecca Tepper, chief of the Energy and Environment Bureau in the Massachusetts Attorney General’s Office. The real question is how to build that mix in the most cost-effective and reliable way, she said.

“We’re hoping that we’ll be able to use the wholesale markets in a way that will result in a better outcome,” she said. “But we’re still talking about the same two issues that we’ve been talking about for years, which is incorporating those clean energies into the market and resource adequacy.”

A positive outcome will be tied to valuing resources for the purpose of reliability.

“That needs to be done both for clean resources and for thermal resources,” she said.

As it stands, states have a lot of unanswered questions about power market development and the mechanisms for clean energy procurement that may come from it, said James Daly, vice president of energy supply at Eversource Energy (NYSE: ES).

Largely New England states are relying on utility power purchase agreements and clean energy standards to reach their climate goals, Daly said, adding that the “jury is still out” as to whether they will cede that control to the ISO.

For Daly, the priorities for market development are environment, reliability and affordability.

“We need to pay attention to whether we have the generation today secured and operational and with the fuel it needs to get us to that future state and not have market dislocations along the way,” he said.

Studies have shown that New England states will need natural gas generation for grid reliability well beyond 2030. And some stakeholders believe carbon pricing is the best option to support the energy transition, said Brett Kruse, vice president of government and regulatory affairs at Calpine.

Carbon pricing, he said, is “politically bad” because states do not support it.

He sees some potential for the market to evolve by 2025 whereby states obtain their capacity through bilateral contracts and the ISO runs a pure reliability market.

But he’s not too optimistic about that possibility.

“I'm just not sure you can change the market enough soon enough, which is important to be able to accomplish that in the market-related way,” he said.

ISO-NE / Energy Market / Resource Adequacy / Natural Gas
KEYWORDS Calpine Clean Energy Standard Conservation Law Foundation Eversource Energy (NYSE:ES) ISO - New England (ISO-NE) minimum offer price rule (MOPR) Northeast Energy and Commerce Association (NECA) reliability Vermont Department of Public Service (VT DPS)
Jennifer delony rto website final
Jennifer Delony

‘Robust’ Legislation Likely Outcome of Hydrogen Study, Conn. Rep. Says

More from this author
You must login or register in order to post a comment.

Report Abusive Comment

Popular Stories

  • PJM Orders Load Sheds in AEP Following Storms

    Jun 14, 2022
    NERC & Committees
    By Rich Heidorn Jr.
  • PJM Capacity Prices Crater

    Jun 21, 2022
    Demand Response
    By Rich Heidorn Jr.
  • Federal Briefs

    Jun 28, 2022
    By Shawn McFarland
  • AEP Under Fire as Load Sheds Persist in Ohio

    Jun 15, 2022
    Company News
    By Rich Heidorn Jr.
  • FirstEnergy’s Top Executives Face Job Reviews

    Jun 21, 2022
    Company News
    By John Funk

Want us to be your eyes and ears?

Let us put you "inside the room."
Sign Up Today

Upcoming Events

  • 01Jun

    NW Energy - Decarbonizing the Northwest: Webinar Series

  • 11Jul

    SPP Markets and Operations Policy Committee (MOPC)

    Westminster, CO
  • 12Jul

    PJM Planning Committee (PC)

    Audubon, PA
Tweets by rtoinsider
  • Publications
    • RTO Insider
      • CAISO
      • ERCOT
      • ISO-NE
      • MISO
      • NYISO
      • PJM
      • SPP
      • FERC & Federal
    • ERO Insider
      • NERC & Committees
      • FERC & Federal
      • Regional Entities
      • Standards & Programs
    • NetZero Insider
      • Federal Policy
      • State & Local Policy
      • Building Decarbonization
      • Transportation Decarbonization
      • Transmission & Distribution
      • Generation & Fuels
      • Equity & Economics
      • Technology
  • Additional Links
    • About Us
    • Why Subscribe?
    • FAQ
    • Terms
    • Privacy Policy
    • Cookie Policy
  • Contact Us
    • Rich Heidorn Jr.
      Editor-in-Chief & Co-Publisher

      Merry Eisner
      Chief Operating Officer & Co-Publisher

      10837 Deborah Drive
      Potomac, MD 20854
      (301) 658-6885

    • Facebook Twitter Linkedin
Copyright ©2022. All Rights Reserved Privacy Policy | Terms Of Use. Design, CMS, Hosting & Web Development :: ePublishing