New England's electric grid and winter 2017-18

New England's electricity grid is ready for reliable operations this winter, says the region's grid operator -- but special operating procedures might be required in the case of unexpected outages or fuel delivery constraints.

According to ISO New England Inc., the independent, not-for-profit regional transmission organization responsible for almost all of New England, supplies of electricity should be sufficient to meet regional consumer demand this winter. The grid operator projects a peak demand of 21,197 megawatts under normal winter temperatures (about 7 degrees Fahrenheit), or 21,895 megawatts of peak demand if extreme weather occurs (2 degrees F).

These projections are higher than last winter's actual peak demand (19,647 MW on December 15, 2016, during the hour from 5 to 6 p.m.), but lower than the region's all-time winter peak (22,818 MW, on January 15, 2004) or the record peak (28,180 MW on August 2, 2006). ISO-NE notes that total energy consumption and regional peak demand have remained flat in recent years "as a result of increased use of energy-efficiency measures and behind-the-meter solar photovoltaic (PV) systems."

The grid operator projects that it has commitments from enough power plants and demand-side resources to meet the forecast peak demand under both normal and extreme weather conditions. ISO-NE also points to its fifth seasonal Winter Reliability Program provides incentives for generators to stock up on oil or contract for liquefied natural gas, and also for demand-side resources committing to be available. As noted by the grid operator, the availability of generators with fuel has been a key reliability factor during recent cold winters, thanks in part to the past winter reliability programs. ISO-NE says its new capacity market performance incentive rules which take effect June 1, 2018 should eliminate the need for future special programs.

At the same time, the grid operator warns of its "continuing concern" over the availability of fuel for those power plants to generate electricity when needed. In a press release, ISO-NE noted, "The region’s natural gas delivery infrastructure has expanded only incrementally, while reliance on natural gas as the predominant fuel for both power generation and heating continues to grow." It observed that over 4,000 megawatts of natural-gas-fired generating capacity is at risk of not being able to get fuel when needed, due to natural gas pipeline constraints.

The grid operator also cites changes to the regional portfolio of generating resources, such as the May 2017 retirement of a 1,500 MW coal- and oil-fired power plant. According to ISO-NE, the Brayton Point power plant's closure "removed a facility with stored fuel that helped meet demand when natural gas plants were unavailable." The reliability benefits of stockpiled fuel and baseload power and related proposals are currently under examination by the Federal Energy Regulatory Commission.

The grid operator listed challenges that could affect power system operations such as "if demand is higher than projected, if the region loses a large generator, electricity imports are affected, or when natural gas pipeline constraints limit the fuel available to natural-gas-fired power plants," as well as the special operating procedures it would invoke in those circumstances.

NECA Renewable Energy Conference 2016

The Northeast Energy and Commerce Association (NECA) will hold its thirteenth annual renewable energy conference on March 3, 2016.

NECA is New England's oldest and most broadly-based, non-profit trade association serving the competitive electric power industry.  NECA facilitates an open forum among all electric power stakeholders to foster the development and maturation of competitive power markets.

NECA's 2016 Renewable Energy conference features panel discussions on hydropower imports, distribution network policy, reliability, transmission and storage, and emerging trends in renewable finance/economics.  Of particular interest this year are state efforts to support large scale and distributed renewables like wind and solar, broad retirements of coal-fired and other central generating power plants, proposed new infrastructure like electric transmission and natural gas pipelines, and shifts in the balance of resources New England relies upon for energy.

Registration for the event is available on the NECA website.

ISO-NE files IRC-related values for 2019-2020

In advance of an upcoming auction to sell electric generating capacity into the New England market, regional grid operator ISO New England Inc. has submitted key information about its plans to the Federal Energy Regulatory Commission.

ISO New England is the private, non-profit entity that serves as the regional transmission organization for New England.  In this role, ISO-NE plans and operates the New England bulk power system, administers New England’s organized wholesale electricity market, and has some responsibility over system reliability.  Reliability can be stated in terms of a loss of load expectation or “LOLE”, which measures how often non-interruptible customers are disconnected.

New England has adopted a capacity market as part of its wholesale electricity market structure.  One aspect of system reliability is ensuring sufficient generating capacity is available to meet consumer demand.  Pursuant to Section III.13 of the Tariff, the ISO administers periodic Forward Capacity Auctions, or FCAs, in order “to procure the amount of capacity needed in the New England Control Area.”

ISO-NE will hold its tenth Forward Capacity Auction in February 2016, covering the 2019-2020 Capacity Commitment Period.  To do so, ISO-NE must first identify how much generation will be needed to meet reliability standards in light of total forecasted load requirements for the New England Control Area and to maintain sufficient reserve capacity to meet reliability standards.  One key value characterizing this need is the "Installed Capacity Requirement" or ICR.  ICR refers to the amount of resources needed to meet the reliability requirements defined for the New England Control Area of disconnecting non-interruptible customers no more than once every ten years.  Under Section 205 of the Federal Power Act, ISO-NE files with the FERC proposed ICR-Related Values for the each auction.

On November 10, 2015, ISO New England submitted to the FERC its Installed Capacity Requirement, Local Sourcing Requirement for the Southeastern New England Capacity Zone, Hydro Quebec Interconnection Capability Credits, and Demand Curve Values for the 2019-2020 Capacity Commitment Period.  In that filing, ISO-NE proposed an Installed Capacity Requirement (net of certain credits for imports) of 34,151 MW.

ISO-NE noted that for the most part, this and other key values were calculated using the same Commission-approved methodology that has been used to calculate the values submitted and accepted for other recent Capacity Commitment Periods. One key difference for the tenth FCA is the inclusion of behind-the-meter photovoltaic (“PV”) resources that are not yet reflected in historical loads as a reduction in the load forecast. This change addresses a requirement imposed by the FERC in its January 2, 2015 Order accepting the Installed Capacity Requirement and related values for the ninth FCA.

ISO-NE asked FERC to accept the proposed ICR-Related Values for the tenth FCA to be effective on January 9, 2016 (i.e. 60 days after filing), to enable their use in the tenth FCA scheduled for February 2016.

New England Clean Power Link proposed

A developer of electric transmission lines has proposed a new line that would connect New England to Quebec.  The so-called New England Clean Power Link would run about 150 miles from the U.S.-Canadian border to Ludlow, Vermont.  While the line shares some features with other proposed ties to the Canadian power grid -- including its development team -- the New England Clean Power Link differs from prior proposals in several regards.

Demand for electricity in the northeastern United States, and in particular for renewable power, has led to interest in developing several transmission lines to Canada.  Provincial crown corporation Hydro-Quebec has many large hydroelectric dams, and continues to develop Quebec's rivers for power production.  Meanwhile, Newfoundland utility Nalcor is developing gigawatt-scale hydropower on the Churchill River in Labrador, with aims to export the power to eastern Canada and the U.S.

This relative surplus of Canadian hydropower has led developers to propose transmission lines connecting Quebec resources to New England consumers.  These lines include the Champlain-Hudson Power Express from Canada to New York City, and the Northern Pass from Canada into New Hampshire.

The $1.2 billion Clean Power Link would have a capacity of 1,000 megawatts, roughly equal to the size of a nuclear power plant.  Like previous proposals, the newly-proposed line is motivated by the perceived opportunity to sell Canadian power in New England.  The Clean Power Link also shares features in common with other proposals, in that it would be a high-voltage direct current or HVDC line.  Notably, it would also be developed and financed by TDI New England, a Blackstone Group subsidiary led by the team behind the Champlain-Hudson Power Express.

Like that line, it would run about 100 miles under Vermont's Lake Champlain.  South of the lake, the Clean Power Link proposal features lines buried underground.  This contrasts with the Northern Pass, whose traditional wires-on-towers architecture has drawn significant opposition in New Hampshire.

The Clean Power Link faces a regulatory process including environmental and energy permitting, and is also dependent on the market forces that motivated its proposal.  It is unclear whether any of the proposed transmission lines to Canada will actually be built, let alone which one.  For now, TDI aims to build the line and place it in service by 2019.

Senate climate bill proposes carbon fee

Senators Barbara Boxer of California and Bernie Sanders of Vermont have introduced climate legislation that would impose a fee of $20 per ton of carbon or methane equivalent emitted.  The Climate Protection Act of 2013 provides measures designed to "address climate disruptions, reduce carbon pollution, enhance the use of clean energy, and promote resilience in the infrastructure of the United States".  What does the Senate climate bill do -- and what are its chances of passage?

The centerpiece of the Climate Protection Act of 2013 is a fee imposed by the Administrator of the U.S. Environmental Protection Agency on carbon emissions.  Starting in 2014, the carbon pollution fee would be $20 per ton of carbon dioxide or equivalent.  For the next 10 years, the fee would increase by 5.6 percent per year, after which it would hold steady at about $34 per ton.

The fee would apply to any manufacturer, producer, or importer of a carbon polluting substance, defined as coal (including lignite and peat), petroleum and any petroleum product, or natural gas that releases greenhouse gas emissions when combusted or used.  The fee would apply whether the carbon polluting substance is produced in the U.S. or is imported.  As designed, it would be an "upstream" fee, meaning only the first producer or importer of the substance would have to pay the fee directly; subsequent users would not be liable for the fee, although they would likely pay a higher price to acquire the fuel as the the upstream entity passes its costs along.

60% of the funds raised from the carbon pollution fee would be used to provide a monthly residential environmental rebate to legal residents of the United States.  The remainder would be used to create a Pollution Reduction Trust Fund. The Trust Fund would be divided up for five purposes.  $7.5 billion per year would go to the EPA to mitigate the economic impacts of the carbon pollution fee on energy-intensive and trade-exposed industries.  $5 billion shall be available to the Department of Energy to carry out a Weatherization Assistance Program for Low-Income Persons.  $1 billion would go to the Secretary of Labor for job training, education, and transition assistance for individuals employed by the fossil fuel industry.  $2 billion will go to the Advanced Research Projects Agency-Energy program.  The balance shall be used shall be used for federal budget deficit reduction, as would the entire Trust Fund after 2024.

To protect domestic industry against competitive harms caused by the carbon pollution fee, the Climate Protection Act of 2013 also includes a carbon equivalency fee on imports of carbon pollution-intensive goods.  Those goods would include iron, steel, a steel mill product (including pipe and tube), aluminum, cement, glass (including flat, container, and specialty glass and fiberglass), pulp, paper, a chemical, or an industrial ceramic, as well as any other goods whose production is deemed to have similar carbon intensity.

Funds raised the carbon equivalency fee would be split between the EPA and the Department of Transportation.  The EPA would use its share primarily to fund state and local programs that assist communities in adapting to climate change, improving the resiliency of critical infrastructure; and protecting environmental quality and wildlife.  EPA could also use the funds to meet international commitments made by the United States to assist with climate change adaptation.  The Department of Transportation's share would be used to fund state and local programs that assist communities in improving the resiliency of critical infrastructure and for projects that provide preferential parking for carpools, including the addition of electric vehicle charging stations.

Will the Climate Protection Act of 2013 pass?  Congress has previously considered several structures to encourage a shift to lower-carbon energy resources, ranging from creating a national cap-and-trade market to a carbon tax.  To date, none has passed, although individual states and regions have created cap-and-trade programs like the Regional Greenhouse Gas Initiative (RGGI) and the California Air Resources Board market.  President Obama called on Congress to address climate change and carbon emissions in his 2013 State of the Union address, and other jurisdictions such as the Canadian province of British Columbia have enacted a carbon tax.  Could the carbon fee and dividend structure proposed in the Climate Protection Act of 2013 be the solution?  At the least, it will provoke a national dialogue about carbon emissions and the federal government's role in managing them.

Champlain Hudson Power Express debated

As policymakers seek to secure energy supplies for the future, how far abroad should they cast their nets?  In addition to cost, reliability, and energy mix goals like renewable electricity standards, should decisions be made based on other factors such as local economic development?

New York legislators debated these questions yesterday in hearings over a proposed transmission line that would connect New York City to Canadian hydroelectric generation.  The $2.2 billion high-voltage direct current line, known as the Champlain Hudson Power Express, would run from the U.S.-Canadian border to the New York metro area. The line would run underwater through Lake Champlain, the Hudson River, and East River for much of its route, with the remainder of the line buried underground.

The Champlain Hudson Power Express was first proposed in 2010, and has been the subject of controversy.  New York Governor Andrew Cuomo has launched the N.Y. Energy Highway program, a public-private initiative to upgrade and modernize New York State’s energy system.  The Champlain Hudson Power Express's developer, Blackstone Group, L.P. subsidiary Transmission Developers Inc., is promoting the line as part of that solution.  It would connect over 1,000 megawatts of Canadian generation - primarily Hydro-Quebec's hydropower projects, as well as some wind - to power-hungry consumers in the New York City area.

Some stakeholders question the effects of the line on existing and new generation in New York.  Older domestic power plants may be unable to compete with the Canadian power; if imports are priced just below what domestic generation needs to operate, the result could be a loss of jobs and tax revenues without significant consumer savings.  Stakeholders such as the International Brotherhood of Electrical Workers Local 97, representing more than 4,000 workers in electric generation and utility jobs in New York, have publicly opposed the project on these grounds, while calling for growth of domestic generation projects.

The Canadian power might also compete with existing and proposed indigenous renewable power projects.  New York has adopted a renewable portfolio standard of obtaining 30 percent of its electricity from renewable sources by 2015.  New York currently excludes large-scale hydropower projects from qualification for its RPS, but Canadian imports could dampen market demand for in-state renewable generation.

The Champlain Hudson Power Express reportedly featured prominently in a public hearing held yesterday by the New York Senate Standing Committee on Energy and Telecommunications to "consider and analyze the long-term base load energy generation and transmission needs of the State of New York".  Debate over the proposed line is likely to continue, with economics and regulation likely to play key roles in its fate.