When the governors of Connecticut, Maine, Massachusetts, Rhode Island and Vermont released a joint statement Wednesday calling for reforms to ISO-NE, it read less like an olive branch and more like a precursor to a seismic shift in relations between the states and the RTO.

The governors said they “require” changes to market design, transmission planning and RTO governance, which they said are stunting their efforts to reduce economy-wide greenhouse gas emissions. The New England States Committee on Electricity (NESCOE) will specify the reforms in a soon-to-be-released document. (See related story, New England Governors Call for RTO Reform.)

“I think it’s clear that the governors are saying what’s happening right now can’t and won’t persist. ‘We will change it,’” said Theodore Paradise, senior vice president of transmission strategy and counsel at Anbaric. “‘Let’s try to work together to change it,’ but sort of the next step — hidden or embedded in this language — is ‘we will get there, one way or the other.’ This is really not an optional conversation or a request. This is more of a directive of what we as a region are going to do.”

Katie Dykes, commissioner of Connecticut’s Department of Energy and Environmental Protection, said, “The best path for us is one that centers on coordination and cooperation with our neighboring states,” and the governors’ statement speaks with “a unified voice” about what states expect from the RTO in the future.

Dykes said the federal government “unfortunately” has taken a step back on climate change leadership, leaving New England states on “the front line for combating climate change.”

“It’s very important that states have appropriate involvement in the design of market-based mechanisms to achieve our decarbonization policies,” Dykes said. She added that “ratepayers are being saddled with duplicative costs. We have a market design that is actively preventing our state from getting credit for clean energy resources that we have had to procure outside of this market because the market is not designed to incentivize investment in the resources that we need. It’s inefficient. It’s unnecessarily costly. It cannot continue.”

Dykes said the nonpublic NEPOOL stakeholder process needs to be open to state lawmakers so that “very knowledgeable folks who participate in the NEPOOL discussions engage with some of the policymakers at the state level who have concerns and preferences around what our grid should look like and what value should be provided for our ratepayers.”

Ari Peskoe, director of the Harvard Electricity Law Initiative, said the statement was “a long time coming.”

“It was good to see a real strong statement from the governors about what they do want to see and what they think the future of the sector should look like,” Peskoe said. “I thought that was a real positive step forward that five governors were willing to sign on to this.”

As for New Hampshire not being a signatory, Peskoe said it “is the clear laggard state in terms of clean energy ambitions” and that Republican Gov. Christopher Sununu “has, at best, been lukewarm on clean energy.” The five other governors lead states with “aggressive, clean energy targets.”

“What I’ve seen from NESCOE in the past was wanting to reach consensus before issuing any sort of statement, and that had the effect of weakening the group’s ambitions,” Peskoe said. “I thought it was interesting that this time [NESCOE] decided they weren’t going to wait for New Hampshire to call for the regional clean energy solution.”

Advanced Energy Economy Director Caitlin Marquis, whose work in part focuses on ISO-NE, said she is “cautiously optimistic that this is a positive development, and that the ISO will be similarly willing to work constructively with the states to address some of the concerns.”

Marquis added that there is a carrot-and-stick aspect to it.

“I think it’s an ask that the ISO engage and the states get a bigger role,” Marquis said. “If they’re able to come to some alignment on the concerns the states have on clean energy, there could be a constructive path forward there. I think the New England states have been clear that they don’t have an issue with a carbon price but want an economy-wide solution. There are some specific concerns with an ISO carbon price, and I do think there’s frustration that that message has not gotten through.”