REA’s Co-Founders, Dick and Joanne Brooks, attended the June 20 FERC open meeting in Portland, Maine where there was a packed house on hand to hear the presentations and panel discussions, with the four FERC Commissioners overseeing the proceedings. I can highly recommend two great restaurants in Portland, DeMillios and the Porthole. Both have excellent seafood and a fun atmosphere with great service.
First, I want to thank the FERC Commissioners, the State PUC Commissioners, ISO New England and all of the panelists for providing such an insightful agenda of topics and discussions. The FERC Commissioners came prepared to make this a productive meeting, and I can say some progress has been made since the last meeting in Burlington, VT. Here are my summary observations:
- The needle has moved since the Burlington, VT meeting last Fall. I conclude this based on what appears to be movement by each side from their original positions: ISO New England demanding carbon pricing and the States demanding FCEM. There wasn’t a single mention of carbon pricing or FCEM. This would seem to indicate a willingness by each side to move from their original positions toward something else – what else isn’t clear yet. I HIGHLY recommend reading this very insightful and objective May 24, 2023 report from the MassEEA regarding FCEM that contains these main findings "The FCEM Design Proposal was helpful in fostering greater dialogue and a shared understanding of the challenges and considerations involved in developing an FCEM" and "Massachusetts must collaborate with its regional partners and explore more expedient market‐based approaches to support the development of clean energy, the achievement of state decarbonization requirements,and reduced consumer costs. " I also recommend reading this report from the Haas Institute on the impact of carbon pricing on consumer costs.
- ISO-NE presented information about a new modeling framework that was produced with help from EPRI that creates 21-day forecast of energy supply and demand to identify any capacity shortfalls.
- ISO-NE used outcomes from several study scenarios, based on past weather events, to conclude that the Everett Marine LNG Terminal (EMT) would not be necessary to ensure grid reliability through 2027, based on the outcomes and the assumptions that went into the modeling platform. Several graphs were presented showing hourly energy capacity over a 21 days study period, highlighting hours with energy shortfalls (capacity shortages), for each of the studied weather events. New information has come to light that may impact future capacity markets and the EMT. This will be discussed on July 11.
- ISO-NE acknowledged that they are not capable of determining if loss of the EMT would have impact on gas pipeline networks servicing New England. Each LDC and pipeline operator would need to make that determination, with help from State officials.
- There seemed to be broad consensus that something must be done to ensure reliability of the electric grid throughout the energy transition in New England; the path forward remains foggy in this regard with no clear consensus on a solution.
- There is no doubt who is responsible for reliability for the region - ISO New England, as VT Commissioner Tierney expressed so clearly during the meeting last year in Burlington, VT and that message remained strong during this meeting in Portland on June 20.
- I had an opportunity to discuss the “Always on Capacity Exchange” (AOCE) concept with State representatives from Maine, Vermont, New Hampshire, ISO New England and FERC. AOCE was submitted to NEPOOL for consideration as a Pathway forward, and remains available on the NEPOOL website and NESCOE in response to a call for comments for the New England Vision statement. AOCE was withdrawn from the NESCOE proceedings when it was learned that NESCOE had already identified a preferred solution, FCEM.
- I made several offers to present AOCE to ISO New England and State representatives, informing them that AOCE was presented to PJM on June 1, 2023, which was well received.
- I'm 100% convinced that AOCE cannot succeed without first securing State support for AOCE.
- AOCE is the only capacity market reform proposal I'm aware of that embraces and supports consumer participation, such as Clean Energy Buyers in the quest to ensure a reliable electric grid and achieve corporate ESG Goals
- Both PJM and ISO New England are planning to apply a “risk factor” as part of "resource accreditation" (ELCC and MRI respectively) to estimate capacity contributions across broad categories of resources, based on fuel type and fuel supply. This approach is guaranteed to produce inaccurate supply forecasts during most hours of an operating day, as was pointed out by Monitoring Analytics in the FERC filing for the PJM FERC meeting on June 15. AOCE does not attempt to “guess capacity contributions” by resources but instead relies on generator owners/operator to determine for themselves how much capacity they will commit to, based on their own risk assessments and knowledge of their resource’s performance (expected operational efficiency EOE), by placing offers into AOCE. Generators are held accountable to meet their AOCE capacity commitments using "pay for performance rules"
- AOCE is designed to secure the proper amount and type of grid services capacity needed to maintain reliability each hour of the operating year at each location in ISO New England’s Balancing Area, under all weather conditions, as the energy transition continues to gain momentum.
I welcome the opportunity to present AOCE as a possible solution to address Resource Adequacy for the New England region and encourage the people I met during the conference to reach out if you would like to see an AOCE presentation. AOCE was first introduced on Energy Central in response to a call for articles in 2019. The original AOCE paper and research materials are available for download at Energy Central.
I look forward to attending future meetings aimed at finding a solution for New England’s Grid Reliability Requirements.