Dive Brief:
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The Federal Energy Regulatory Commission Thursday dismissed a complaint from renewable energy trade groups who argued that ISO New England gives natural gas-fired power plants that lack firm fuel supplies an unfair advantage in its markets.
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The American Clean Power Association and RENEW Northeast failed to show that gas-only resources are in a different situation than generators with on-site fuel, a condition needed to advance their claims of undue preference, FERC said in the unanimous decision.
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Even so, comments on the complaint indicate that ISO-NE’s failure to plan for extremely cold weather and a lack of fuel for power plants leaves the region vulnerable to a “serious reliability threat,” FERC Commissioner Allison Clements said in a concurrence. FERC should propose a solution to the problem instead of waiting for ISO-NE to offer one, she said.
Dive Insight:
Roughly a quarter of New England’s gas-fired capacity lacks backup fuel supplies, which can become unavailable in the winter, according to the complaint filed in March.
ISO-NE treats those plants the same as fossil-fueled generators with on-site fuel and renewable energy facilities even though they may not be able to operate if they lose access to their fuel supply, ACP and RENEW Northeast said.
In its decision, FERC said ISO-NE and its stakeholders are considering reforms in areas brought up in the complaint – including capacity accreditation, operating reserves and fuel limitations.
“We urge prompt action by ISO-NE on reforms, including capacity accreditation if deemed appropriate, to address these reliability concerns,” FERC said.
Clements urged FERC to step in. “In the face of clear evidence that ISO-NE’s rules fail to ensure the supply of resources when they are most needed, in my view the commission has a duty to take action to ensure grid reliability,” Clements said in the concurrence.
FERC dismissed the complaint “essentially due to a pleading error,” she said, noting that ACP and RENEW Northeast showed that gas resources are at risk of not operating because of correlated unavailability in the winter.
However, the groups failed to assess data for all resource types, leaving FERC unable to determine whether undue discrimination is occurring, Clements said.
ISO-NE and other parties opposing the complaint told FERC that the grid operator’s rules do not accurately measure a resource’s contribution to reliability, Clements said.
“Given this apparent agreement that ISO-NE’s rules are failing to assess the reliability of resources when they are most likely to be needed, in my view the commission has a duty to fix the problem via action pursuant to section 206 of the Federal Power Act,” she said.
A solution to the reliability threat may be found more quickly via FERC action, according to Clements.
“By waiting and hoping for a sufficient solution to come to us, the commission backs itself into a corner: defer to ISO-NE even if its future section 205 proposal is deficient, or require further action under section 206, thereby allowing the region’s insufficient rules to ensue for an even longer period of time as that section 206 proceeding plays out, potentially jeopardizing the reliable delivery of electricity for an additional season or more before a replacement rate can be finalized and implemented,” she said.
RENEW Northeast is disappointed FERC did not recognize how pipeline operations can limit gas supplies for gas-only power plants or that ISO-NE’s current capacity accreditation should not assume 100% fuel availability, Francis Pullaro, the group’s executive director, said Friday in an email.
“We will cross our fingers the ongoing ISO New England capacity accreditation effort will yield the needed reforms,” he said.
Meanwhile, FERC scheduled a second New England Winter Gas-Electric Forum for June 20 in Portland, Maine. The agency held a similar forum last year in Vermont.
“Each winter, natural gas supply constraints during extreme weather places the New England electric grid and its nearly 15 million residents at risk for rolling blackouts,” Willie Phillips, FERC acting chairman, said. “I believe addressing this risk is urgent and I am hopeful that we can continue the productive discussions from the last forum as we shift our focus to having stakeholders propose potential solutions to address the winter reliability challenges in the region.”
