Cleaning Up New England’s Energy Market

David Ismay

New England’s regional electric grid operator, ISO-New England (ISO-NE), recently revealed that it is exploring a potential shift in how our region’s energy markets work. Although made with little fanfare, the announcement of what ISO-NE is calling its “Integrating Markets and Public Policy” (IMAPP) initiative (which begins today with a members-only “solution ideas day” in Boston) is a very big deal, one that has the regional energy world buzzing. Depending on the direction ISO-NE takes, such a shift could have a significant impact on how and where we get our electricity – including our region’s ability to scale up clean, renewable energy and scale down dirty, climate-polluting fossil fuels.

Here’s why.

Six years ago, in order to ensure that the New England we all treasure remains livable for generations to come, Massachusetts and Connecticut passed powerful laws requiring that climate-warming emissions be slashed dramatically by 2050. By doing so, they mandated that, over the next three decades, each state’s electric generation must become almost, if not completely, free of carbon pollution – a big change, but one that we can do, and do affordably, if we start now.

Good for Massachusetts and Connecticut, you might think, but what does that have to do with ISO-NE, the quasi-federal entity that operates the electricity grid for all of New England? The answer is: everything. Businesses and families in those two states alone account for more than 70% of ISO-NE’s customers. And by its charter, ISO-NE is legally obligated to provide them an “open, non-discriminatory, [and] competitive” electricity market for “any required service.” That means not just the fossil fuel power ISO-NE is used to, but also the renewables that the people of Massachusetts and Connecticut require, and others throughout New England strongly desire.

And more than that, ISO-NE is obligated to deliver that clean power via “economically efficient” markets while ensuring “an equitable allocation of costs, benefits and responsibilities among market participants.” So clean energy can’t be forced out of the market with higher prices levied on the businesses and families that need it.

But that’s just what ISO-NE has been doing for the past six years. It has insisted that Massachusetts’ and Connecticut’s climate laws are merely state “public policies” and that it has the discretion to address or ignore those policies while continuing to design and operate markets that actively encourage the construction and operation of dirty fossil-fuel burning power plants.

That must change, and change very soon, if our restructured energy experiment in New England is going to continue. ISO-NE and its markets were created by, and exist to serve, the people of New England. And if 70% of ISO-NE’s customers require carbon-free electricity, ISO-NE is legally bound to run its markets (or set up new ones) to ensure that clean power will be delivered to them not only reliably, but also equitably and cost effectively.

Let’s hope that ISO-NE now understands that as it moves forward this effort to shift how the energy markets work. But if it doesn’t, CLF will be there to ensure that it does – at today’s “solution ideas day” (where we will present our own initial thoughts on market reforms, including pricing carbon in the energy and capacity markets based on 2050 roadmap modeling) and beyond (through at least a half-dozen other such meetings scheduled through year’s end).

CLF is a voting member of ISO-NE’s governing New England Power Pool (NEPOOL) stakeholder group, one of the very few – and by far the most active – participating environmental advocacy groups. You can learn more about CLF’s technical ISO-NE advocacy here, and about some of the recent clean energy victories it has resulted in here and here. You can learn more about our work on pricing carbon in New England here.

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