New England’s power grid operator is biased

New England’s power grid operator is biased

Gordon van Welie is a cheerleader for natural gas pipelines

TWENTY YEARS AGO, as part of its effort to create competitive electricity markets, the Federal Energy Regulatory Commission (FERC) authorized the Independent System Operator of New England (ISO New England) to oversee the region’s electric grid. Though it has never been a household name, ISO New England is the ultimate power behind the flipping of every switch for 14 million people in Massachusetts, Connecticut, New Hampshire, Maine, Vermont, and Rhode Island.

The agency operates the grid in a ceaseless juggling act, supposedly selecting in the most-timely fashion possible the least expensive fuel source available to generate electricity.  ISO New England’s website says that it is commissioned to plan for power needs for the coming decade with “comprehensive system analysis and planning . . . to signal where new investment is needed.” As a non-profit entity, ISO New England says it “does not favor one resource over another.”

Under that mandate, ISO New England is not supposed to be prejudiced for or against coal, natural gas, oil, wind, nuclear, hydroelectric, or solar power. But in the last decade, behind a smokescreen of frequent and overstated catastrophic concerns about grid reliability, ISO has abandoned fuel neutrality in favor of natural gas.

Gordon van Welie, ISO’s chairman and CEO since 2001, has become the cheerleader for new pipelines on behalf of natural gas developers and local utilities, saying in 2014, “The lack of pipeline infrastructure has raised fuel adequacy for natural gas generators to the top of the list of pressing concerns.”

Last September, he told an energy conference at Saint Anselm College, “Anything that’s going to put more gas molecules into the system is going to help.” And in June, while participating in a panel discussion at a utility industry conference, van Welie ominously suggested that the way to build pipelines was to “socialize the cost.”

This is a euphemism for forcing ratepayers to pay billions of dollars for these unneeded pipelines — in other words, a pipeline tax.

With the Massachusetts Supreme Judicial Court  ruling it illegal under Massachusetts law to charge electric rate payers for new gas pipelines,  van Welie may be raising the prospect  of a federally-imposed, region-wide tariff, similar to the one first proposed in a 2014 memo delivered to ISO by the New England States Committee on Energy.  A tariff to pay for new pipelines could be imposed by ISO, with approval from the Trump administration’s Federal Energy Regulatory Commission.

Such a move would be an end run, not only around the Supreme Judicial Court decision, but also around public opposition, the unanimous vote against a pipeline tax by the Massachusetts Senate, and the nearly two-thirds of House members who signed a letter to the House Seaker expressing their opposition to making ratepayers pay for pipelines.

Climate mandates and public health implications are not part of the ISO’s energy-planning and decision-making processes, but they should be, especially if the discussion is going to shift to which costs should be socialized and to what end. Consumers don’t want to see the electricity system run by folks who care little about policies established by the state governments it was established to serve, especially if they must pay for more polluting fossil fuels.

In its 2017 Regional Grid Outlook, van Welie said the region is “decades away” from having sufficient renewable resources and installed grid-scale storage to meet demand. Lee Olivier, Eversource’s executive vice president of energy, justified his claim that a pipeline is needed by quoting van Welie. “One fact that hasn’t changed is the need for Access Northeast,” asserted Olivier, because, “Gordon van Welie warned that New England is challenged to meet electricity demands with existing fuel infrastructure…New England needs access to increased supplies of natural gas in the winter and needs it soon.”

Meet the Author

Andrew Savitz

Executive director, Consumers for Sensible Energy
The rapid advance in renewable technologies is rendering baseless such claims. A 2015 study by The Analysis Group for Attorney General Maura Healey found that there are less expensive, more cost-effective ways of meeting peak demand than a ratepayer-financed pipeline. A February 2017 study by Synapse Energy Economics found that state energy efficiency programs, renewable portfolio standards, and greenhouse gas emission reduction targets throughout the New England states will soon result in current pipelines running under capacity.

That report predicts a 27 percent reduction in natural gas use in New England in six years and a 41 percent drop by 2030. Other state policies like, such as the comprehensive energy bill signed by Gov. Charlie Baker last year, require utilities to procure very large amounts of hydroelectricity, offshore wind, and solar over the next five years, not decades. These studies point to energy solutions appropriate for this century, not last.

Andrew Savitz is the executive director of Consumers for Sensible Energy.

  • Mhmjjj2012

    The last time I checked, Gordon van Welie, ISO’s chairman and CEO, was making almost a $2 million annual salary courtesy of ratepayers while more than half of ISO-NE’s employees received $100k+ a year and board members worked 6, 7 or 8 hours a week for a yearly salary exceeding $100k. At least one board member made $300 an hour. While CommonWealth has had numerous articles on ISO New England, it’s really time for some investigative reporting starting at ISO NE’s beginnings and how we got a restructured utilities system. It wouldn’t hurt to compared the salaries of Gordon van Welie, his top executives and board members with other ISOs too.

  • NortheasternEE

    ISO-NE is faced with a next to impossible task of keeping the lights on without burning fossil fuel. State and regional mandates are forcing the grid integration of variable and intermittent resources (VER) from wind and solar, with multi year purchases at above the competitive wholesale market administered by the ISO. As less and less power is sold competitively in the merit order wholesale market, the lower priced natural gas is squeezing both coal and nuclear power into early retirement. Coal and nuclear become competitive during peak demand in the winter and summer, but that is not enough to pay their bills.

    Currently wind and solar supply less than 10%, with mandates for 25% by 2020, and calls by legislators for 100% by 2050. That is a clear signal to coal and nuclear that there is no future for them in New England. The environmental movement pushing renewables has created an impossible problem for ISO-NE. The early retirement of coal and nuclear leaves the system without enough resources to address peak demand in the winter and summer.

    There are two potential solutions. (1) Bring in more natural gas to replace coal and nuclear capacity. (2) Add enough energy storage for wind and solar to store enough electricity in the Spring and Fall for use in the Summer and Winter. Seasonal storage capacity is not even at the planning stage. Only more natural gas can keep our lights on.

    The irony is that the benefits of carbon avoidance by the early retirement of coal are canceled by the early retirement of clean nuclear power. Furthermore, running the grid with wind and solar with natural gas firming has been shown to avoid little to no carbon.

    If we want to avoid blackouts and skyrocketing rates, tell Beacon Hill to repeal the Green Communities and Global Warming Solutions Acts and let ISO-NE do their job of supplying reliable electricity at economical rates.