New England
I continue to remain focused on the reliability issues in New England.
The region experienced regular winter woes, even this week. But it appears that New England will make it through another winter season without a major disaster akin to that experienced during Winter Storm Uri. However, as several commentors have reiterated in the docket we have open on New England reliability issues, the system continues to operate on a knife’s edge during extreme winter weather events. It is not enough to sit by with our fingers crossed for mild winters each year.
I am convinced that we need to tackle winter reliability challenges both in the very near-term to minimize risks and make sure we’re not making the problem worse, and in the longer term to ensure we’re not in this same dire situation in the years ahead.
Commentors in the docket and participants in our reliability forum have repeatedly suggested that a quantification of the energy adequacy risk the region faces — that’s in MWh terms — is an indispensable first step for FERC and the New England states to act on solutions.
I know that ISO-NE is conducting a study with the help of EPRI to seek to quantify operational risks under extreme weather conditions beginning in 2027. I am glad to hear it and I am hopeful it will provide credible, concrete numbers to the energy adequacy risk so we can begin evaluating the full set of longer-term solutions.
My concern, however, is in the near term. The comments we received reinforce the dwindling time available to change the outlook for the next several winters. We have heard repeatedly from ISO New England and others that the potential loss of the Everett LNG facility in Massachusetts would worsen the situation before things get better. But we still need the data on the near-term risk to support the basis for either FERC or the New England states to take action, whether that be retaining Everett or some other immediate steps.
It is not clear that the May release of the ISO’s study results will satisfy that need. It is my understanding that the next six to nine months are critical to answering at least the Everett question. I’m very much looking forward to the Commission’s forum in June, and I also think we cannot wait three more months to make progress in addressing the impending risk.
I know the Chairman shares a desire to roll up our sleeves, to engage with our state partners, and move the discussion forward so that we can show up in June with a shared commitment towards finalizing a plan of action.
State of the Markets Report
Thank you, Mr. Chairman, and thank you Staff for the presentation. These are really good reports and when you add them together, each state of the market, you have the stack of data that represents the challenge as the Chairman just described.
I wanted to highlight two things. Ernesto, the first one you highlighted very well, and that’s the extreme weather stresses on the grid, not just in New England but all over the country. I thought it was notable that in the Western example, CAISO itself reported that in addition to the flexible storage resources contributing to maintaining reliability during the ten-day heat wave at the end of last summer, there was also regional coordination. They effectively acted like a regional grid during that time and grid operators worked together to help get through that tough time. I also think the analysis of the interplay between the electric and gas systems in the report is a really helpful input into our ongoing thinking about how to manage the vulnerabilities on both sides of those systems and the interplay between them.
The second thing I wanted to highlight—and Taylor you got to most of this—is when you think about these recent supply additions and retirements and the snapshot of seasonal market prices, again, this information is such an important input into the potential for market reforms that would send the right signals. Now, of course the infrastructure piece is critical, we have to do that as well. But the market can solve for some of this, and we need to think about sending the right incentives to accelerate new entry where it is needed as well as to provide the services the system actually needs to remain reliable on a going forward basis.
Thanks again for this snapshot of the complex challenges that this Commission faces.