It will be nearly three more years before a contentious rule ends that has made it difficult for renewable energy to get onto the New England grid.
Late Friday night, days before its deadline that fell on the holiday weekend, the Federal Energy Regulatory Commission approved a plan from regional power grid operator ISO-New England to change how it acquires power for the grid in the future.
Connecticut’s Department of Energy and Environmental Protection Commissioner Katie Dykes, her counterparts in other states and even some of the FERC commissioners themselves had preferred an immediate change. The slow transition is already sparking worries that more fossil fuel power generation will get entrenched in the grid before the rule changes.
“FERC’s decision fails to end once and for all the reign of this harmful rule,” said Melissa Birchard, director for clean energy and grid reform at the regional advocacy group Acadia Center. The rule, she said, “will continue to provide a lifeline to the region’s most inefficient fossil fuel generators for at least three more years.”
The rule at the center of this controversy is known as the Minimum Offer Price Rule – or the MOPR. It is the backbone of the ISO’s once-a-year auction that determines what generating resources will go into its Forward Capacity Market, the future power it plans three years in advance.
In the auction, the low price wins, but it includes a formula that is heavily weighted against state-subsidized renewable energy projects — which, while coming down in price, are still more expensive than classic fossil fuel projects like natural gas power.
Connecticut and other New England states have renewable energy and greenhouse gas emissions targets, if not mandates. As a result of the MOPR, ratepayers wind up paying more for power to meet those targets.
Dykes has argued for years for changes to the rules, even threatening to pull Connecticut out of the forward capacity market. In mid-2021, discussions began on ending the MOPR by the beginning of 2023. But at the last minute, the ISO decided to file a plan with FERC that would delay full elimination of the MOPR for two additional years, until 2025.
Dykes and all but one of the other New England states didn’t support the change, but they didn’t oppose it either. “It’s a long way from not opposing to supporting,” she said early this year. She also pointed to the ISO’s contention that a transition period would better insure grid reliability.
Birchard now worries that the ISO will seek to delay the transition when the deadline approaches, or worse, try to revive the MOPR.
“The region deserves modern solutions, not delay tactics,” she said. “Russia’s war against Ukraine and the skyrocketing gas prices New England faces as a result puts in harsh relief the poor results of ISO-NE’s overreliance on fossil gas as a solution to every grid need.”
In an emailed statement, ISO spokesman Matt Kakley said: “We’re pleased that the Commission saw this proposal for what it is — a reasonable step forward on New England’s transition to a decarbonized future. Despite claims to the contrary, this transition will provide a clear path for clean energy resources ready to enter the market over the next two auctions, while affording the region time to tackle other needed market reforms.”
But FERC did not quite see it that way. The vote was 4-to-1, with one of two Republican commissioners opposing changing the MOPR. But the three Democratic commissioners were less than enthusiastic.
Chairman Richard Glick wrote, “I believe that the best outcome here would have been for ISO New England Inc. (ISO-NE) to immediately implement its new Minimum Offer Price Rule (MOPR) — i.e., without the Transition Mechanism. Simply put, ISO-NE could have, and should have, done better.”
Commissioners Allison Clements and Willie Phillips wrote jointly: “While immediate elimination of the MOPR would likely better serve ISO-NE’s customers than the proposal that has been filed, such a proposal is unfortunately not before us.”
The ISO also pointed out that, until the transition is complete, there will be a MOPR exemption for some offshore wind and solar, and battery storage will be in a very competitive position. Kakley also noted that long-term studies and ongoing changes to the market are designed to allow more renewables in.
Birchard said Acadia Center would be willing to work with ISO-New England on other critical energy reforms.
“But we challenge ISO-New England to embrace the clean energy solutions to today’s grid challenges instead of continuing to rely on costly and polluting fossil fuels as a crutch. The region deserves modern solutions, not delay tactics,” she said.
For her part, Dykes said, “We are still reviewing the decision. We are glad that the decision affirms a definitive end date for the MOPR. We must redouble our efforts now on the further, significant reforms of the markets needed for a clean, reliable, affordable grid.”