New England Energy market

New England is a region in the northeast U.S. that includes Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine. The Independent System Operator – New England (ISO-NE) serves as the Grid Operator, Market Administrator and Power System Planner for the region, as authorized by the Federal Energy Regulatory Commission (FERC). The Maine Public Utilities Commission (MPUC) is the regulator for the State of Maine. In Massachusetts, the Department of Energy Resources (DOER), the Office of Energy and Environmental Affairs (EEA), and the Department of Public Utilities (DPU) work together on issues concerning energy infrastructure in the Commonwealth. 

current snap shot

Snapshot taken on August 11, 2016 at 12:29pm EST. For current data, visit www.iso-ne.com.

Clearly, natural gas is the dominant fuel source for electricity generation in New England. The optimal primer on the ISO-NE system is their annual Regional Electricity Outlook publication, available here. Two key charts from the report are re-published below. Click each to expand. 

MARKET DEMAND

3500MWs will be offline by 2018, the 680MW Pilgrim Nuclear plant announced it would close by 2019, and an additional 6000MWs is at risk of retiring by 2020. These types of units generate power on a consistent and reliable basis, ready whenever they are called upon to produce. The same can not be said of wind and solar. This is the market demand that the Maine Power Express intends to meet. It is also recognized that it will require new transmission infrastructure to bring renewable resources from where they are located to where they are needed. In the chart on the right, the MPX is depicted as "H. Maine - Greater Boston."

Some of the many advantages the MPX has over other proposed transmission projects are a diverse resource mix, 100% site control and burial within an existing corridor, and the first queue position to interconnect in the greater Boston area. 

market opportunities

The six New England states recognize their over-reliance on Natural Gas and their need to meet Renewable Portfolio Standards (RPS) and Regional Greenhouse Gas Initiative (RGGI) targets. They formed the New England States Committee on Electricity (NESCOE) and several states have passed legislation authorizing their regulatory agencies to solicit proposals for renewable energy and transmission projects. 

Massachusetts Legislation - www.mass.gov

The Massachusetts Legislature put the finishing touches on a compromise energy bill in the late hours of their final day in session and Governor Charlie Baker signed the bill into law on August 8, 2016. In a sense, this energy bill has been in development for several years, having failed to be addressed under the Patrick administration. Now, the Commonwealth can finally move forward towards procuring clean energy resources and meeting GHG reduction targets. 

Link to H.4568 - An act to promote energy diversity: https://malegislature.gov/Bills/189/House/H4568

The MPX Development team has been preparing for this type of solicitation for several years. While the New England Clean Energy RFP was a good start, the type of procurement called for in this legislation is much more in line with the attributes and benefits of the MPX. The Bill calls for:

  • Massachusetts Utilities and the Department of Energy Resources (DOER) to jointly issue an RFP "Not Later than April 1, 2017" - This is a great timeline for the MPX
  • The RFP calls for 9,450,000 megawatt-hours (approx. 1200MWs) of clean energy - The MPX proposes 1000MWs over HVDC directly to Boston
  • The Clean Energy can be 1) Canadian Hydro alone, 2) RPS Class I Renewables (wind/solar/etc) alone and/or 3) RPS Class I firmed by Hydro, with preference given to the latter. - The MPX proposes a diverse mix of domestic and Canadain Wind and solar resources, firmed by Canadian Hydro; precisely the project in most demand

Now it is up to the DOER and Massachusetts Utilities to prepare the RFP. MPX is looking forward to the first Draft RFP, hopefully released this year, to evaluate the opportunity. The MPX will offer significant benefits to Maine, Massachusetts, Eastern Canada and New England as a whole.

New England Clean Energy RFP - www.cleanenergyrfp.com

The Connecticut Department of Energy and Environmental Protection, the Massachusetts Department of Energy Resources, Eversource Energy, National Grid and Unitil developed a Request for Proposals for Clean Energy and Transmission in order to identify projects that will advance the clean energy goals of Connecticut, Massachusetts and Rhode Island. This 575MW RFP was issued in the Fall of 2015 and authorities are working on selecting a winning bid now. MPX did not participate in this RFP as it wasn't quite the right fit for the project. However, this is an example of the demand and willingness for the New England states to take significant action.

FERC Order 1000 - www.ferc.gov

Order No. 1000 is a Final Rule that reforms the Commission’s electric transmission planning and cost allocation requirements for public utility transmission providers. The rule builds on the reforms of Order No. 890 and corrects remaining deficiencies with respect to transmission planning processes and cost allocation methods. 

The rule establishes three requirements for transmission planning:

  • Each public utility transmission provider must participate in a regional transmission planning process that satisfies the transmission planning principles of Order No. 890 and produces a regional transmission plan. 
  • Local and regional transmission planning processes must consider transmission needs driven by public policy requirements established by state or federal laws or regulations. Each public utility transmission provider must establish procedures to identify transmission needs driven by public policy requirements and evaluate proposed solutions to those transmission needs.
  • Public utility transmission providers in each pair of neighboring transmission planning regions must coordinate to determine if there are more efficient or cost-effective solutions to their mutual transmission needs.

This provides the regulatory framework for the MPX transmission project, designed to meet the public policy objectives of the New England States and the cost recovery method to be employed. More details here

Participant Funded, Merchant Line

The MPX development team is currently evaluating several options for the commercialization of the project, including a "Merchant" option. MPX applied and received approval from FERC for Negotiated Rate Authority, a first-step towards issuing an Open Solicitation as a Merchant Transmission project.