ISO-NE Proposes 5.9% Budget Increase 

ISO-NE presented its proposed 2022 operating and capital budgets to the NEPOOL Participants Committee last week, with increases to both.

The operating budget of $189.2 million before depreciation represents a 5.9% increase from the 2021 figure. The RTO will add nine full-time-equivalent positions to address the burgeoning workload for integrating clean energy and distributed resources in the market development, transmission planning, power system modeling and legal areas, and cybersecurity and information technology support.

ISO-NE expects its capital budget over the next five years to increase from $28 million to $35 million, including $32 million for 2022. The primary influences of the spending hike are the nGEM platform replacement, cybersecurity, the clean energy transition and reliability improvement projects, as well as IT asset and infrastructure replacement.

Although ISO-NE’s spending has never exceeded budget, it might happen in 2022, according to Robert Ludlow, the RTO’s chief financial and compliance officer. Situations like funding the next phase of the Pathways to the Future Grid project, constructing models to study extreme weather and contingencies, conducting studies, and integrating clean energy, distributed resources and emerging technologies could trigger more spending.

Other additional spending areas include:

• legal costs;
• federal and state policy directives, including multiple scenarios under the 2050 Transmission Study;
• interest rates on tax-exempt debt, pension and post-retirement benefit plan liability costs, and interest income on settlement float balance; and
• potential impact of workforce disruption because of continued uncertainty in remote versus on-site work.

The New England States Committee on Electricity (NESCOE) also presented its proposed budget of $2.49 million for next year, an approximately $57,000 increase over 2021 but below the $2.62 million projected in its five-year pro forma budget. NESCOE said the reduction reflected “continued rebalance” of technical and legal spending and declines in travel-related expenses and rent.

The budget timeline includes votes at the PC and the RTO’s Board of Directors, before filing with FERC by Oct. 15.

Tropical Storm Henri ‘Minimally Impactful’

In his monthly report to the PC, ISO-NE COO Vamsi Chadalavada said that Tropical Storm Henri — which made landfall at Westerly, R.I., on Aug. 22 — was “minimally impactful” to the bulk electric system. The RTO, local control centers, and transmission, distribution and generation entities were “well prepared” for the storm. As a result, no significant generation resources tripped.

Chadalavada added that ISO-NE declared an abnormal conditions alert on Aug. 20 and canceled it on Aug. 23. In addition, the RTO required no supplemental commitments before or during the storm as the day-ahead commitments met all expected needs, Chadalavada said.

The original peak load forecast was 17,100 MW at 7 p.m. on Aug. 22, but the actual was 16,440 MW for that hour. ISO-NE lost minimal load, with approximately 140,000 customer outages at the peak of the storm, mainly in Rhode Island. Two 115-kV transmission lines were also impacted during the storm, though Chadalavada said both were restored on the same day.

Energy Market Value Rises

In the opening portion of Chadalavada’s report, he noted that ISO-NE’s energy market value for last month was $534 million (through Aug. 25), up $71 million from the updated July valuation and $229 million higher than the same month in 2020.

Natural gas prices were 22% higher than in July. Average real-time hub LMPs were 37% higher at $48.83/MWh. Average natural gas prices and real-time hub LMPs were up 161% and 105%, respectively.

Daily uplift or net commitment period compensation (NCPC) payments totaled $2.3 million over the period, down $500,000 from the adjusted July value and $1.1 million less than in August 2020. NCPC payments were 0.4% of the energy market value.

Chadalavada said seven new projects totaling 951 MW applied for an interconnection study: two offshore wind, two solar, two solar with batteries and one battery. ISO-NE is currently tracking 296 generation projects, which total approximately 32,631 MW.