Presentation to Consumer Liaison Group – December 2015


Dated: December 3, 2015

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Consumer Liaison Group
Transmission in New England

December 3, 2015


  • New England Transmission Investment
  • FERC Order 1000
    • Competitive Transmission
    • Public Policies
  • Multi-State Clean Energy Solicitation
  • Snapshot of State Activities

Transmission Investment in New England

Since 2002, about $12 billion in reliability Tx placed in service, under construction or in planned/proposed phase

  • [see pdf for graphic]

A Comparative Look: Market Pricing Components, Including Transmission

[see pdf for graphic]

Perennial Debate In New England: How do ISO-NE’s Transmission Planning Assumptions and Methodologies Compare to Those of Other Regional Transmission Operators?

  • NESCOE commissioned a consultant to develop objective, fact-based detailed comparative summary of RTOs’ transmission system reliability planning approaches and methodologies
  • The survey will not have judgments or conclusions – it will provide objective data for consideration
  • Completion – early 2016


“Merchant” Transmission Proposals

[see pdf for graphic]

Order 1000: NESCOE Perspective

  • NESCOE/states actively participated in FERC rulemaking and in regional stakeholder process on compliance
  • On competition: Supported all qualified project proponents having comparable project development & cost recovery opportunity
  • On public policy: Advocated for a process states would use, with a central role for states.  Ultimately, state officials, not ISO-NE, decide whether and the means by which to satisfy state laws

Order 1000: Competitive Transmission

Benefits of not being first

ISO-NE last region to receive final set of FERC orders so has yet to run competitive solicitation as have other regions

This fall, NESCOE and ISO-NE hosted forum to experiences elsewhere – NY-ISO, PJM, SPP, Cal-ISO – and hear from merchant developers that participated

All material at

Some Competitive Transmission Questions

  • What is the optimal solicitation model for consumers?
    • ISO identify the need and solution or just the need and let market bring forward ideas?
  • How should evaluation criteria be structured?
    • Should cost be the only thing that matters?
      • If not, what else matters, and to what extent?
  • Does ISO have the right resources?
    • Bid evaluation is new for ISO, bids could be many
  • How should various cost containment features be structured or evaluated?
    • Hard cap or allow developers to determine risks they are willing to take?
    • What about off-ramps from caps?

Illustration: How much should cost matter in bid evaluation?

[see pdf for graphic]

Illustration: Cost Variation in Bids

[see pdf for graphic]


Order 1000: Policy-Driven Projects

  • NESCOE/5 States challenging compliance orders at D.C. Cir.
  • FERC unlawfully expanded the rule to require project selection rather than consideration of public policies
    • Not just academic: by requiring selection and at the same time denying states a central role in that process, expanded rule substitutes ISO-NE judgment for that of state officials charged with implementing state laws
  • Expect clarity on process prior to implementation

Clean Energy RFP

Certain state agencies and utilities in CT, MA and RI developed, with NESCOE assistance, a draft joint RFP for clean energy projects based on each state’s current authority.

Objective:  To explore whether a multi-state procurement might attract larger-scale projects and transmission than single state procurements and achieve individual states’ clean energy goals more cost effectively than if each state proceeded on its own.


Multi-State RFP Schedule

Feb 2015

  • Issue draft RFP for public comment

June – October 2015

  • RFP Posted and Filed at DPUs
  • MA and RI DPUs approve RFP for Issuance

Fall 2015

  • RFP Issued November 12th
  • Bidder Conference December 3rd
  • Bidder Q&A ends December 29th

Winter 2016

  • Final Q&A posted January 14th
  • Bids Due January 28th
  • Evaluation of Bids through July 2016

Resource Types:

Class I renewable power (wind, solar) or large-scale hydro meeting requirements of states’ laws.  20 MW minimum threshold.  Over 5,000 GWh in total.

Project types

  • Traditional PPAs, No Transmission Requirement
  • PPAs with associated Transmission
  • Clean energy delivery Commitments 

Clean energy delivery commitment proposals tie transmission-only support payments to the project’s performance in fulfilling the commitments for the delivery of clean energy

Support payments under a FERC filed and accepted transmission tariff/rate schedule paid for by the participating states

  • Tx Developer and clean energy supplier ability to negotiate commercial terms.

RFP issuers will jointly and individually evaluate bids

  • No obligation to procure anything at all
  • Each state, EDC use own authority, criteria, judgment to determine whether a proposed project is cost-effective and beneficial for its consumers

Green Tracking

Verification of clean energy attributes for imported power is critical if Canadian resources wish to be credited with helping states satisfy carbon reduction requirements or environmental objectives

No uniform structure currently in place in Eastern Canada to measure, verify, and track emissions characteristics of imports into New England.

In 2013, N.E. Governors and Eastern Canadian Premiers adopted a resolution (Resolution 37-1) encouraging Canadian provinces to evaluate existing options and opportunities to adopt verification mechanisms of generation sources and environmental attributes that correspond with the existing New England Power Pool (NEPOOL) GIS verification system

Recent changes to NEPOOL GIS rules to facilitate tracking but corresponding changes likely needed on other side of the New England’s borders.

Snapshot: Some Parallel State Actions 

CT DEEP implementing new legislative authority in connection with diverse resource solicitations (natural gas, energy efficiency, renewable energy, large-scale hydropower, and energy storage).

  • Comment opportunity closed Sept. 30 on three proceedings to procure resources pursuant to Public Act 15-107

NH PUC investigation, with electric utility involvement, into “potential approaches . . . to address cost and price volatility issues currently affecting wholesale markets” (IR15-124)

  • Sept. 2015 Staff Report filed with PUC, issued for public comment

MA DPU order on 10/2/15 determining that it has legal authority to review and approve contracts filed by EDCs for pipeline capacity, and established a standard of review for such contracts. (15-37)

  • National Grid, Eversource Gas Capacity/Supply RFPs
  • Separately, broad legislative proposals under discussion

VT in process of siting evaluation of TDI Clean Power Link

ME and RI have enabling laws

  • Maine PUC proceeding underway to evaluate gas pipeline
  • National Grid Gas Capacity/Supply RFP