As I wrote in Shorting the Grid, the quest for reliable electricity in the winter in New England is far more difficult than it needs to be. The root of the problem is the FERC (Federal Energy Regulatory Commission) rules for areas like New England. This area is organized on the RTO system and the FERC rules for RTOs are not particularly concerned with reliable electricity. The rules are very concerned with “fuel neutrality.” In other words, it doesn’t seem to matter if we have rolling blackouts in winter in New England, as long as the rules that led to the rolling blackouts were fair to everyone. The rules especially have to be fair to all the different types of fuels and generators.
Of course, “fair to everyone” is in the eyes of the beholder.
Local Attempts to Encourage Winter Reliability, Despite FERC
I document many of the RTO winter problems in Shorting the Grid. ISO-NE, our grid operator, set up the early Winter Reliability Programs. These programs worked well to provide reliability for the grid by making sure gas-fired plants had oil on hand when they couldn’t obtain gas on cold days. Then FERC shut down that program as not being fuel-neutral. In response, ISO-NE suggested a complex formula of fines and rewards, Pay for Performance, to substitute for the Winter Reliability Program. It was approved by FERC, but it failed, financially, within four months of being implemented. Then came the Inventoried Energy plan. That got implemented, on top of the Pay for Performance plans. Next, ISO suggested three new auctions which I reviewed in my book, and I said they would not work. As it happens, these three auctions did not get formally presented to FERC.
Now we get beyond the material presented in Shorting the Grid, because books have a lag time to publication. After ISO-NE set aside the three auctions reviewed in my book, ISO-NE proposed three differerent new auctions for FERC approval. Those auction plans were turned down by FERC on October 31 of this year. In the most recent news, ISO-NE is asking FERC for guidance in setting up a program which will meet FERC’s fuel-neutral criteria, and still provide reliable electricity in winter in the Northeast. If such a thing can actually be done.
What Kind of Rock?
In other words, since FERC seems to turn down any ISO-NE program that might work, maybe FERC can suggest a program? A friend of mine who is retired from the Navy suggested that FERC has been giving orders that are the equivalent of “Get me a rock.” What kind of rock? How big? Round or jagged? Those issues aren’t addressed. As far as I can tell, leadership training in the Navy includes “Don’t give ‘get me a rock’ orders.” Maybe FERC needs a little training?
Despite the lag time required by book publication, Shorting is still basically up to date. This latest three-auction go-around was predictable to anyone who read my book. The RTO system can’t solve even simple problems of reliability, which is how I started the tale of Shorting, and where I will end this blog post.
The great thing about a blog post is that people can comment and start a conversation. Often, I learn important things from my readers.
If you haven’t read Shorting the Grid, let me encourage you to buy it. If you have read it, let me encourage you to leave a review on Amazon. Amazon decides which books to feature based on the number of reviews, or so I am told. Your review is a sort of gift to me. Thank you.