Dive Brief:
- The New England Independent System Operator (ISO NE) picked the Eversource-National Grid consortium’s AC Plan, estimated at a total cost of $739.7 million, for the Greater Boston and Southern New Hampshire Reliability Project, a new, high-voltage, AC transmission system to firm the grid between Massachusetts and New Hampshire.
- ISO NE rejected NextEra Energy Resources subsidiary New Hampshire Transmission's (NHT) SeaLink Plan, estimated at a total cost of $1.025 billion, which would been largely on the ocean floor from Seabrook Station to the Mystic substation in Everett, Mass., and then undergrounded.
- Despite warnings from NextEra that Eversource-National Grid bids are historically unreliable, ISO NE picked the lower cost bid from the region’s two largest utilities for the proposed overland route in hopes that it could be in service before the Boston region faces rolling blackouts. Upon winning, the utilities promised to complete the lines by 2018.
Dive Insight:
ISO NE began studying the Greater Boston area power system in 2008. Several upgrades were put forward to protect reliability after shuttering began on the four Salem Harbor power plants, which was completed in 2014. Solutions decided on in 2012 included new 345 kV and 115 kV lines. In 2013, an updated needs assessment from ISO NE reached similar conclusions.
NextEra provided ISO NE a history of 11 Eversource/National Grid non-binding bids with cumulative projected costs of $2.2 billion that ended up costing a cumulative $3.9 billion, a total cost overrun of 79%. The implication was that the utility consortium intentionally underbids to win guaranteed-profit contracts and then goes to regulators to obtain returns for the higher costs. The winning consortium is guaranteed a 10% return on its investment through rate basing.
