NESCOE Responds to Stakeholders; Requests No Public Policy Transmission Study from ISO-NE

After receiving input from members of the ISO-New England, Inc.’s (ISO-NE) Planning Advisory Committee (PAC) regarding the state, federal, and local statutes and regulations (Public Policy Requirements) “driving transmission needs relating to the New England Transmission System,” the New England States Committee on Electricity (NESCOE) informed ISO-NE on May 1, 2017 that it does not request that ISO-NE conduct a transmission study to address such needs, and at this time, no Public Policy Requirement is “driving transmission needs” in New England. NESCOE’s May 1, 2017 submission to ISO-NE, pursuant to Section 4A.1 of Attachment K of the ISO-NE Open Access Transmission Tariff (OATT), provides NESCOE’s position regarding the effect of clean energy statutes and regulations on current transmission needs in the region, and will have important effects on planning and paying for transmission system solutions through the end of the current ISO-NE planning cycle.

Background

Pursuant to its OATT, ISO-NE must provide PAC members with the opportunity to comment on Public Policy Requirements “driving transmission needs” in New England at least once every three years. By May 1 of that year, NESCOE may provide to the ISO-NE a written submittal identifying such Public Policy Requirements that drive transmission needs and request specific study of any such need. In the event that NESCOE requests a transmission study and, subsequently, ISO-NE selects a project to meet a studied need, the costs for that regional transmission project are allocated to all New England states based on an agreed-upon formula premised on “beneficiary pays” and load-sharing principles. ISO-NE triggered this process in early 2017 and received comments from PAC members on February 25, 2017 recommending that ISO-NE undertake transmission planning necessary to meet the region’s renewable energy and climate change-related Public Policy Requirements. NESCOE’s May 1, 2017 submission to ISO-NE addressed these recommendations.

NESCOE’s May 1 Submission

NESCOE’s May 1, 2017 submission does not ask ISO-NE to initiate a public policy transmission planning study in the current planning cycle. Instead, NESCOE states that no Public Policy Requirement, including state statutes and regulations requiring the New England states to procure substantial amounts of clean generation to satisfy renewable energy and global warming policy imperatives, drives any transmission planning needs at this time. In support of this conclusion, NESCOE provides responses from each New England state to the PAC members’ February 25, 2017 comments. These state-specific responses address the three types of Public Policy Requirements raised by PAC members as follows:  

• Competitive Solicitations for Long-Term Contracting. Though several of the NESCOE states require electric distribution companies to solicit long-term contracts for renewable energy generation, none of the states believe that such contracting requirements constitute Public Policy Requirements driving transmission needs. For example, Connecticut states that while its procurement laws “could result” in ratepayer funded transmission projects, such laws do not require either selection of any project or “ratepayer support for transmission construction to satisfy the procurement authority.” Massachusetts likewise acknowledges that the outcomes of current solicitations for both onshore and offshore renewable energy generation and associated transmission (summarized previously here and here) could trigger transmission needs in the future, but no Public Policy Requirement renders a transmission study necessary at this time. 
   
• Renewable Portfolio Standards (RPS / RES).  Each New England state maintains Renewable Portfolio Standards (RPS).[1]  For purposes of the May 1, 2017 submission, however, none of the states believe that such requirements drive regional transmission needs at this time. Connecticut for example, identifies increased behind-the-meter solar energy projects, energy efficiency programs, and new long-term contracting as attracting a “significant supply of regional RECs without creating a need for transmission projects.”  Both Massachusetts and Rhode Island note the several ways in which regulated entities can meet RPS requirements without additional transmission construction, such as making alternative compliance payments (ACPs) and purchasing RECs from qualified generators.  Maine concludes that it “easily meets its RPS requirement” and no additional transmission is necessary to comply with its own RPS regime at this time. Vermont also concludes that its RES program would not drive transmission needs, due to a lack of vintage restrictions for Tier 1 resources and because Tier 2 resources must be less than 5 MW and connected to the Vermont subtransmission or distribution, and not the transmission system.
   
• Greenhouse Gas (GHG) Emissions Reduction Initiatives. The states also disagreed with PAC members that effective GHG emissions reduction initiatives trigger regional transmission needs. Connecticut emphasizes that “significant emission reductions have been accomplished so far without any transmission project needs . . .”  Massachusetts notes its GHG emissions reductions “are achieved through investments in various sectors,” including transportation, the gas distribution system, and energy efficiency.  In addition, since Massachusetts is still finalizing its regulations to implement statutorily required GHG emissions level reductions by 2020, “it would be inappropriate to conclude that a Public Policy Transmission Study is required for Massachusetts to meet its commitment for GHG reductions . . . at this time.” New Hampshire in turn emphasizes a commitment to Regional Greenhouse Gas Initiative (RGGI), a “technology neutral” regime that requires only that qualifying sources purchase allowances.  New Hampshire concludes that it would “oppose the use of Order No. 1000 Public Policy Requirements findings related to clean air laws to justify the expense of public policy transmission proposals under the OATT.” 

Effects On Planning and Paying For Transmission In ISO-NE

The NESCOE submission affects how New England states will plan and pay for any transmission improvements needed during the current planning period to meet the requirements of state laws and regulations, including those calling for increased procurement and use of renewable energy generation. Because NESCOE has found that no Public Policy Requirement drives the need for transmission, ISO-NE will conduct no planning studies to address transmission needs to meet the identified Public Policy Requirements under the public policy terms of its OATT. As such, ISO-NE will not pursue the regional planning and selection of any transmission projects that will satisfy the region’s Public Policy Requirements in this planning cycle. Instead of pursuing the regional planning of such projects in accordance with FERC Order No. 1000, and the resultant sharing of costs pursuant to the FERC-approved formula, the New England states are left to pursue state-specific approaches for procuring the transmission necessary to deliver the needed renewable generation, like the ongoing Massachusetts’ Clean Energy Generation solicitations.  Under this approach, each procuring state will be financially responsible for all transmission needed to meet its Public Policy Requirements, and selected transmission projects will require study and approval through ISO-NE’s often years-long interconnection request process applicable to Elective Transmission Upgrades. 

Under the OATT, stakeholders may seek reconsideration by ISO-NE of NESCOE’s May 1, 2017 submission within fifteen (15) days. 

For questions regarding ISO-NE’s public policy transmission planning, NESCOE’s May 1, 2017 submission, or any other energy issue, please contact Jared S. des Rosiers at jdesrosiers@pierceatwood.com or 207.791.1390.