Gov. Janet Mills has joined four other New England governors to press the operator of the region’s electric grid to do more to accommodate a future in which most people will be encouraged to heat their homes and drive vehicles powered with electricity generated by renewable resources.
In a statement issued Wednesday to grid operator ISO-New England, the governors of Maine, Connecticut, Massachusetts, Vermont and Rhode Island said operation of the grid and the current wholesale electricity market must be reformed to help the states meet their aggressive climate change-reduction goals. That will mean speeding up a transition largely dependent on solar and wind – especially offshore wind farms – along with giant batteries to store excess energy.
“It is far past time that New England reforms how its electric grid is managed,” Mills said in the statement. “The wholesale electricity markets must advance and support clean energy laws and policies, as the states demand decarbonization, and markets and consumers support more renewables.”
Mills also said ISO-New England must be more transparent and accountable in its decision-making, broadening its focus beyond reliability and cost to include consumer and environmental concerns.
A document outlining specific areas for reform is expected to be released soon by the New England States Committee on Electricity. The nonprofit group represents the views of the New England states in regional electricity matters. The chairman of Maine’s Public Utilities Commission serves on the committee’s board.
The governors’ statement highlights that Maine and the region are at a pivotal point in their energy futures.
The current independent system operator, or ISO, approach was put in place 20 years ago, when much of the region was restructuring its electric market and separating generation from distribution. The priority then was to make sure the six New England states had enough reliable power plants after utilities sold their generating assets.
Keeping the lights on remains a focus today. But climate change has added a new urgency to the decades-old push to move away from oil, gas and coal. For instance, the Maine Climate Council will present a plan for the governor and Legislature by Dec. 1 to put Maine on a trajectory to reduce emissions by 45 percent by 2030, and at least 80 percent by 2050.
The states now are signaling that the existing structure of the ISO and the competitive wholesale market it oversees isn’t set up to hit those targets and, essentially, electrify the region’s economy. Notably, roughly half the region’s power today is generated by natural gas-powered plants.
“These markets were designed at a very different time,” said Philip Bartlett, Maine PUC chair. “Now the states in the region have clean-energy mandates. There’s a real frustration that the markets aren’t designed to support those policy goals.”
But reforming those markets will be complicated.
For example, natural gas prices are at very low levels now. That translates into lower electric rates for consumers, Bartlett said, which is a good thing. But those market conditions have made it harder for intermittent renewables, namely solar and wind, as well as storage, to participate. One way to accommodate them in the long term is to make sure planning for new transmission lines reflects the aggressive state climate goals. Transmission costs are shared by the region’s ratepayers, but years of upgrades have added to what customers pay on their monthly bills.
“This shouldn’t be taken as an ISO-bashing exercise,” Bartlett said. “The governors want to have a stronger role in the process.”
For its part, ISO-New England is striking a conciliatory tone. In a response to the Portland Press Herald, the operator said it has a long history of working with the states, generators and other participants.
“Maintaining reliable, competitively priced electricity through the clean energy transition will require broad collaboration,” it said, “and the common vision of the New England governors will play an important role in the discussions currently underway on the future of the grid.”
Last February, ISO-New England released a report outlining how the power grid is preparing for New England to shift from fossil fuels to clean and renewable energy resources.
“New England is unquestionably on the path to a clean energy future,” said Gordon van Welie, its president and CEO. “As the region moves forward and the resource mix changes because of state climate goals and industry innovation, the ISO will continue to adapt and refine the region’s wholesale electricity markets to ensure the power grid stays reliable.”
Among the preparations, van Welie said, are the first multistate energy efficiency forecasts, ways to measure and integrate solar output in the markets, and rules and pricing to encourage solar, wind and storage.
Van Welie also has been promoting the concept of net carbon pricing, in which power generated from carbon-emitting plants would be assessed a fee. That would increase power costs, but some of the fee would be given back to wholesale buyers.
But large energy users are suspicious of such a plan, according to Tony Buxton, a lawyer who represents the Industrial Energy Consumer Group in Maine. Net carbon pricing, he said, is basically a tax, and it should be applied to all markets, including heating oil and gasoline.
It’s also a misplaced strategy, Buxton said, because Maine’s generation mix is so clean today that less than 10 percent of the state’s carbon dioxide emissions come from making electricity. Cars and trucks are the biggest culprits. But if electricity prices rise via a carbon tax, he said, it will discourage people from switching to electric heat pumps and zero-emission vehicles.
Asked about support in the Mills administration for a carbon pricing component, Dan Burgess, director of the Governor’s Energy Office, said that’s just one of many ideas that will be discussed and researched in the months ahead. Open forums are expected to be held to encourage a dialogue in the region about the vision being expressed by the governors.
Meeting climate goals and keeping costs low for residents and businesses isn’t mutually exclusive, Burgess said.
“We need to make sure we’re looking at it all holistically,” he said. “It’s not either/or.”