By D. Maurice Kreis, Consumer Advocate
In season 2 of the TV series Stranger Things, the bedraggled residents of Hawkins, Indiana struggle against the Mind Flayer – an uncontrollable, intelligent force from another dimension that wreaks havoc via the underground tentacles it has threaded beneath every part of town. The whole mess is the result of evil experiments conducted by rogue elements of the U.S. Department of Energy.
Could this be an allegory – a message to energy policymakers from series creators Matt and Ross Duffer?
In an odd coincidence, Netflix released all nine episodes of season 2 within days of ISO New England issuing its 2017 Regional System Plan. It is a 154-page document that, read in a certain light, makes the regional transmission organization (RTO) seem a lot like the Mind Flayer.
D. Maurice Kreis, NH Consumer Advocate
ISO New England is everywhere. It is difficult if not impossible to control. And it was brought to you by the Federal Energy Regulatory Commission (FERC) – which happens to be a part of the U.S. Department of Energy.
Much as government-initiated experiments opened up a portal to what the kids on Stranger Things name the “Upside Down,” the government-initiated restructuring the nation’s electric grid via the federal Energy Policy Act of 1992 brought RTOs to most of the U.S.
RTOs are independent, nonprofit organizations tasked with operating their regions’ bulk power transmission systems, overseeing wholesale electricity markets, and planning the future of these systems. Fundamentally, the job of RTOs like ISO New England is “resource adequacy” – making sure we have the generation facilities and high-voltage power lines we need to avoid massive blackouts like the ones that occurred in 1965, 1977 and 2003.
This is important work. And, to be fair, ISO New England lacks the malevolence of the Mind Slayer. But like the Mind Slayer, the ISO is very keen on things that proliferate below ground.
Fundamentally, ISO New England wants more natural gas pipelines in New England. The Regional System Plan notes that nearly half of the electricity produced in New England came from natural gas last year. This creates “serious and growing reliability issues” because of “constraints of the natural gas delivery system,” according to the ISO New England plan.
On November 30, ISO New England declared that New England has the resources needed to meet consumer demand for electricity this winter. But the ISO warned that things could become “challenging” 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.”
Perhaps in a different dimension like the Upside Down it makes sense to solve the problem of too much reliance on natural gas by encouraging the development of infrastructure that will make us even more reliant on this particular fuel. It is an alluring option because natural gas is currently cheap and abundant.
But that cheapness is a bit of an illusion. As the ISO New England Regional System Plan points out, “the lack of firm fuel contracts by natural gas generators has limited the availability of natural gas transport to generators and funding for natural gas infrastructure expansion.”
Translation: ‘Firm’ contracts for pipeline capacity are more expensive than just relying on day-to-day purchases, so the gas generators don’t buy firm capacity. Even if generators buy firm capacity, nothing stops them from selling it if that’s more profitable than burning it should we get into one of those “challenging” situations the ISO mentioned.
The ISO does not stress in its Regional System Plan that it has instituted market rules whose purpose is to penalize generators that opt not to show up in such fashion. Does the ISO lack confidence in these reforms? The plan says ISO New England “continues to work with the natural gas industry to address the challenges of the increasing interdependency between the gas and electric power industries.” But what we need from our grid operator is a robust effort to reform the way the natural gas industry manages pipeline capacity under FERC oversight.
As Jonathan Peress and Natalie Karas of the Environmental Defense Fund recently concluded, “commercial incentives in the gas market are misaligned in a way that diminishes efficient and full utilization of pipeline capacity, leading to behavior by pipeline capacity contract holders that is adverse to the economic interests of utility customers. In other words, flaws in the current natural gas market design can lead to exertion of market power, systemic inefficiencies, diminished electric reliability and ultimately increased costs.”
Elsewhere in the Regional System Plan, the ISO shows it knows how to get emphatic and prescriptive when it wants to. The section on integration of wind, solar and battery storage resources complains that photovoltaic generators tend to trip off line when a big system element like a transmission line or big nuclear plant goes down unexpectedly.
It’s literally the worst possible time for solar panels to make themselves unavailable. According to the ISO, this “highlights the criticality” of a new engineering standard being finalized by the Institute of Electrical and Electronics Engineers.
No one will accuse ISO New England of being a shill for the renewable power sector.
“The region has significant potential for developing renewable resources” according to the Regional System Plan but this “suppresses energy market prices and may further encourage the retirement of traditional generating units.”
This plays into the hand of Energy Secretary Rick Perry, who has asked the FERC to adopt rules that would put coal and nuclear generators back into the profit-assuring realm of regulated rate recovery. The ISO filed comments opposing the Perry proposal, but it then mysteriously put off the release of a much-awaited fuel security report on the ground that it is “prudent to delay finalizing the study until the FERC has provided direction to the industry.”
New Hampshire ratepayers could be more confident about all of this if only they had a real voice in the governance of ISO New England, but they do not. The nation’s biggest regional transmission organization, PJM, funds an independent nonprofit to represent the interests of consumer advocates. The counterpart at ISO New England is called the Consumer Liaison Group but it is a toothless body with no resources.
Its governing committee does not even include a representative of New Hampshire ratepayers.
It’s enough to make ratepayers start to feel like the hapless residents of Hawkins, Indiana — even if ISO New England isn’t really the electric industry equivalent of the Mind Flayer.
Power to the People is a column by D. Maurice Kreis, New Hampshire’s Consumer Advocate. Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere. It is co-published by Manchester Ink Link and InDepthNH.org.
