A $49 million project by incumbent utilities National Grid and Eversource Energy emerged Monday as the lone finalist in ISO-NE’s first competitive transmission solicitation under FERC Order 1000.

The RTO announced Monday that it had recommended the cheapest of the 36 proposals it received in response to its Boston 2028 transmission solicitation to move forward, obviating a second round of review and moving straight to “solutions studies,” to evaluate the adequacy of the proposal.

COO Vamsi Chadalavada last week told the NEPOOL Participants Committee that the RTO was evaluating the proposals and would release its draft list of qualifying Phase One proposals in advance of the Planning Advisory Committee meeting on June 17. But the RTO surprised stakeholders when it announced Monday it had already narrowed the candidates to one project: the $49 million “BOS-017” proposal. (See related story, “Boston RFP and System Disturbances,” NEPOOL Participants Committee Briefs: June 4, 2020.)

Although the RTO did not identify the finalist, National Grid and Eversource Energy issued a joint press release March 5 saying they had submitted eight proposals to the Boston request for proposals, ranging from $48 million to $120 million. The RTO said it received 36 Phase One proposals ranging from $49 million to $745 million. The reason for the $1 million discrepancy between the companies’ announcement and the RTO’s estimate was not immediately clear.

ISO-NE’s presentation for the PAC meeting, also posted Monday, detailed how planners narrowed the field to BOS-017. The RTO did not identify any of the bidders in its announcement or the presentation, saying it identified the projects by randomly assigned unique IDs to “eliminate bias.”

BOS-017 includes the installation of two 11.9-ohm, 345-kV series reactors at the North Cambridge substation (one each on the two 345-kV Woburn-to-North Cambridge cables); a +/-167-MVAR STATCOM at the 345-kV Tewksbury substation; and a direct transfer trip scheme on the 394 line to eliminate the contingency that causes the 115-kV K-163 line overload.

ISO-NE spokesman Matt Kakley emphasized Tuesday the RTO has “not selected any project at this point.

“We are proposing to only advance the one project to Phase 2, but that decision has not been made yet, and will not be made until we’ve had the chance to discuss the proposal with stakeholders, starting at next week’s PAC.”

Mystic Retirement

The project has an in-service date of Oct. 1, 2023. The key in-service date for the RFP is June 1, 2024, the day after the planned retirement of the Mystic Generating Station. The RTO said Mystic’s retirement would result in one N-1 115-kV line overload and three N-1-1 345-kV line overloads. It also identified the need for a +/-150-MVAR dynamic reactive device (DRD) based on system restoration needs.

National Grid and Eversource said their most cost-effective solution maximizes the use of existing transmission facilities and keeps upgrades entirely on their rights of way, minimizing the environmental impact. It would be in-service eight months prior to the planned Mystic retirement.

One market participant, speaking not for attribution, said the move by the RTO to reject all of the other proposals was “almost guaranteed” to result in litigation by some of the other seven qualified transmission project sponsors that had submitted proposals.

ISO-NE’s announcement came three days after it had received a letter from Massachusetts’ two U.S. senators urging the RTO to “prioritize the effects that projects may have on state climate, energy and health goals” when evaluating the Boston RFP proposals. (See related story, Mass. Senators to ISO-NE: Think Clean on Boston RFP.)

In their letter, Sens. Ed Markey and Elizabeth Warren, both Democrats, criticized the RTO’s planning process for listing “environmental impact” in the lowest priority category for the evaluation and noted that “public health impacts are not called out at all.”

Priority

In its presentation, ISO-NE said it had “repeatedly stated that the two most important evaluation factors for the Boston 2028 RFP are ‘cost and speed.’”

“This point was emphasized by the following statement: ‘consideration of all evaluation factors, especially those in groups of lower importance, may not be necessary to make this determination.’”

The 36 projects had in-service dates ranging from March 2023 to December 2026.

The RTO said that most of the Phase One proposals were excluded as a result of the preliminary review because of one or both of the following:

• The proposal did not address the identified needs.
• The proposal failed to meet the Tariff or RFP instructions.

Ultimately, five proposals addressed the needs for a reliable power system and met all other requirements, ISO-NE said. The RTO compared these projects’ costs, which ranged from $49 million to $121 million.

“Given that the $49 million project is significantly less expensive (the next least expensive proposal is for $94 million), the ISO is recommending that the other four projects not advance to the second phase of review, as it is unlikely that further review would lead to their selection,” the RTO said. “Development costs incurred during the second phase of review are charged to ratepayers, so not advancing projects that are unlikely to be selected is a savings for ratepayers.”

Based on their initial review, ISO-NE said it and its consultants concluded BOS-017 solved the identified needs; had a reasonable cost estimate; did not require transmission line siting or acquisition of real estate; requires “limited” permitting; and its in-service date of October 2023 is “reasonably achievable.”

The RTO will accept comments on the draft listing of qualifying Phase One proposals until July 2 at pacmatters@iso-ne.com.

Life-cycle Costs

The RTO said life-cycle costs were not considered in determining the competitiveness of the proposals because they “can be misleading.”

“The total life-cycle cost, which includes PTO [participating transmission owner] upgrades for the existing system, is not known until the Phase Two solution process,” it said.

“Where a significant number of upgrades to the existing system have been included as part of the Phase One proposal, the delta between the provided life-cycle cost and the expected life-cycle cost can be hundreds of millions of dollars,” it added.

During the March 2020 PAC meeting, several stakeholders raised questions about the RFP review procedures. (See “Procedural Questions on Tx RFP,” ISO-NE Planning Advisory Committee: March 18, 2020.)

Phelps Turner, a senior attorney for the Conservation Law Foundation in Maine, flagged due process concerns with the proposed schedule, saying it should be expedited to ensure openness and transparency.

The planning principles are clearly outlined in FERC Order 1000, Turner said, adding that “we also want to make sure we set a good precedent with this first competitive procurement [in New England].” Turner told RTO Insider that CLF was concerned about the evaluation process for all proposals, not just for any single bid.

[Editor’s Note: This article has been revised to clarify that ISO-NE has not “selected” but “recommended” project BOS-017.]