By William Opalka

SARATOGA SPRINGS, N.Y. — Political leaders’ urge to “do something” to combat high winter power prices risks undermining ISO-NE’s power market just as it has begun adding new generation, the head of the New England Power Generators Association said last week.

“We’ve seen new investment come into the region for really the first time in a decade,” NEPGA President Dan Dolan said in a luncheon address at the fall conference of the Independent Power Producers of New York.

He said ISO-NE’s forward capacity market had spurred a “dramatic response,” noting that 13,000 MW of generation is now in the RTO’s transmission queue, up from 5,000 MW a year ago. (See Exelon, LS Power Join CPV in Adding New England Capacity.)

“We’re seeing the market do what it is designed to do,” he said. “But the drive to do something is creating an unprecedented march to out-of-market interventions at the very moment that we’re seeing billions of dollars in investment come into the region.”

The polar vortex and massive snowstorms in Boston in recent winters has created the idea that an “energy crisis” exists that demands immediate action across the region, Dolan said.

He said generators are particularly troubled by two state initiatives.

The first is a drive to “subsidize” hydropower from Hydro-Quebec through transmission and long-term power contracts. Massachusetts Gov. Charlie Baker has proposed legislation to allow 2,400 MW annually of imported power, about one-third of the state’s needs. NEPGA commissioned a study that claims such an arrangement would cost ratepayers $775 million annually in above-market prices, or $20 billion over the life of the 25-year contract.

The second proposal is to fund new natural gas pipelines through electric distribution rates. (See New England Governors Revise Energy Strategy.)

“It’s a little baffling why we would do this potentially disastrous out-of-market intervention at this critical moment,” Dolan said.