In a rare address to the NEPOOL Participants Committee on April 3, ISO-NE CEO Gordon van Welie discussed his recent testimony at the U.S. House Energy and Commerce Subcommittee on Energy, emphasizing the important role that states play to reduce price volatility in the wholesale markets.
Representatives of every ISO and RTO testified to Congress on March 25 about grid reliability. (See All 7 ISO/RTOs Send Senior Executives to Update Congress on Reliability.) Van Welie spoke about New England’s pipeline constraints, the value of offshore wind and the importance of “alignment between federal and state policies.”
Much of van Welie’s time in Washington was spent responding to antagonistic questions about renewables. In his written testimony submitted to Congress and addressing the PC, van Welie stressed that markets alone cannot guarantee resource adequacy and urged the New England states to hedge against high market prices.
While ISO-NE’s wholesale markets “are essentially short-term ‘spot’ markets,” van Welie wrote, the states can enter long-term contracts “to protect consumers against undue price volatility in both the energy and capacity markets, and to incent the development of sufficient resources to meet the resource adequacy standard that is priced in the capacity market.”
States have an important role in reducing the barriers to entry for new resources, he said. He acknowledged that recent federal policy changes — including antagonism towards offshore and onshore wind and new tariffs on imports — create significant challenges for renewable energy development.
“Over the past few weeks, we have seen firsthand the impact that shifts in federal policy can have on our region,” van Welie wrote. “If the large amount of offshore wind that has been contracted for by the states is significantly delayed or ultimately does not materialize, the region would need to assess the potential impacts and determine what other options might be needed to meet resource adequacy needs in the future.”
If the struggles of offshore wind development continue, the region could pursue an increase in the dual-fuel capabilities of its gas fleet, or an increase of its gas pipeline import capacity, van Welie said. However, he noted that increasing gas capacity into the region likely is not a short-term solution. Increased pipeline capacity would reduce the constraints that contribute to high gas prices in the region but would come at a significant upfront cost and could create risks of stranded costs as the New England states eye a long-term shift away from natural gas.
One stakeholder referenced a 2017 study by Synapse Energy Economics that found a proposed Enbridge pipeline intended to reduce the region’s gas constraints would cost about $6.6 billion, a price tag that likely would be significantly higher today, given the increased costs of large infrastructure projects.
Operations Report, Votes
Also at the PC meeting, ISO-NE COO Vamsi Chadalavada reported that energy market revenue totaled $456 million in March, up from $256 million in March 2024. The increase corresponded with significantly higher average natural gas prices compared to March 2024.
The monthly peak load was 17,200 MW, and there were no capacity deficiency events to report.
Power system emissions have trended up so far this year relative to 2024, largely because of lower temperatures across the region.
The committee voted to approve the consent agenda, which included tariff changes intended to improve its economic study process and changes to the ISO-NE operating procedure concerning protection outages settings and coordination.
It also approved a slate of three candidates for the ISO-NE Board of Directors. The slate now goes to the board for approval.
