UNION LEADER: New England’s energy situation ‘precarious,’ ISO leader says
As originally appearing in The Union Leader

By ELI OKUN
Union Leader Correspondent

 

GOFFSTOWN — Energy supplies, reliability and cost are concerns for many New Englanders. But they don’t inspire insomnia in many.

As president and CEO of ISO New England Inc., however, Gordon van Welie has more reason to be kept up at night than most. ISO-NE oversees the region’s power system.

“I really do think we’re facing some choices in the region,” he said Wednesday afternoon, “some crossroads or forks in the road that we’ll have to figure out which one we want to take.”

Van Welie’s remarks came at a discussion of New England’s power markets and infrastructure, hosted by the New England Council at Saint Anselm College’s New Hampshire Institute of Politics.

And he was blunt about the seriousness of the challenges, many of which lack easy solutions, that are looming for the region in just a matter of years. Van Welie said New England’s current operating situation is precarious, and it could become unsustainable in extreme cold weather after 2019.

“The ISO does not use words like precarious or unsustainable lightly,” said Peter Howe, a former longtime reporter for the Boston Globe and New England Channel News who moderated the conversation. “Take that seriously.”

If New Hampshire and other local states are in danger of having the lights turn off during a cold snap in just four years, what can be done now?

The answers are not so simple, van Welie said.

Many coal and oil generators have been retired in recent years, and that trend will only continue as more renewable energy quickly comes online, he said. And demand is expected to remain roughly flat over the next decade.

But ensuring adequate supply should be a top priority, Van Welie said. Without sufficient storage mechanisms, the reliability of renewable energy can be variable and dependent on the weather.

At the center of New England’s energy challenge lie two potentially competing aims, van Welie said: achieving energy reliability through the competitive wholesale market, as the system’s framework is set up currently, and reducing carbon emissions. Though the latter goal is a crucial environmental priority, policy steps to achieve it have the potential to disrupt the market structure.

Van Welie said that personally, he views carbon pricing as one sensible solution — and one that seems likely for the United States in the long term. “A lot of the fear is dissipating around carbon pricing amongst asset owners,” he said, adding that even Capitol Hill seems to be warming somewhat to the idea.

In New England, many of the states support carbon pricing — but having all six onboard would make the Federal Energy Regulatory Commission more inclined to approve such a filing from ISO, he said.

In response to a question from the crowd of more than 100, van Welie said he thinks the Seabrook Station Nuclear Power Plant and the Millstone Nuclear Power Plant in Waterford, Conn., are likely to remain online at least in the short term.

Van Welie lauded the efforts of the New England Power Pool, which has started a stakeholder process to try to figure out possible market adjustments and solutions for the region’s energy and environmental objectives. The group is releasing a framework document by early December, working with ISO and others in 2017 to formulate a plan.

Whatever the ultimate solution, van Welie added, something has to be done. “A decision not to act is going to also be a decision,” he said.

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