Consumers overlooked amid ISO power politics
THE FUEL SECURITY CONTROVERSY in New England, particularly as it relates to the availability of natural gas in the winter, escalated dramatically with the issuance of a fuel security study by the operation of the region’s power grid, ISO New England. That was followed quickly by Exelon’s announcement that it intends to shut down its Mystic units in Everett unless it receives a subsidy from ISO-NE.*
Despite credible challenges to the study, the Federal Energy Regulatory Commission quickly accepted the impact of the Mystic shutdown as a legitimate reliability concern and cleared the path for Exelon to recover the full costs of running the Mystic units for two years, outside of the competitive market.
Over the summer, the participants in the New England Power Pool considered and debated many issues—mostly arcane and complex—affecting the fundamental economics of “price formation” and impacts of the Exelon subsides on other generators. The states of New Hampshire and Maine tried to dump all of the costs on Massachusetts customers, arguing that is was a “local” reliability issue. This was clearly not the case, given that the Mystic plants are the largest non-nuclear generating facilities in the entire region. But, for the most part, the debate focused on the impact on the competitive market—the wholesale competitive market, that is.