In March, Governor Baker reasserted the Commonwealth’s climate leadership by signing an ambitious new law. Overwhelmingly supported by the Legislature, it requires Massachusetts to hit a series of pollution-reduction milestones before reaching net-zero emissions by 2050 — a target necessary to avoid catastrophic climate change. The Baker administration must act fast to meet these critical goals. But when it comes to where and how we get our electricity, a major source of emissions, the Commonwealth cannot do it alone.
Our state is part of a regional power grid that encompasses all of New England and is run by the Independent System Operator, New England, an independent, nonprofit organization authorized by the federal government. ISO-NE controls the electricity grid and influences which energy resources power it, whether it’s fossil fuels like gas or renewables like solar.
To date, ISO-NE has disregarded the climate crisis with policies that protect the grip fossil fuels have over our energy system, purportedly in the service of “reliability.” ISO-NE sets market rules in its tariff, which includes rates for different types of electricity on the grid. It has codified the bias in favor of fossil fuels in its tariff and market rules, and everyone in New England is harmed as a result. These policies are subject to federal review, but grid operators are given wide latitude to come up with their own rules.
ISO-NE holds yearly auctions where they receive bids from energy producers to make sure that the region has enough power. With the rise of renewables, they’ve imposed “minimum offer price rules” in those auctions that require state-sponsored clean energy resources — namely, solar, wind, and energy storage — to submit overpriced bids. The idea of the minimum offer price rules is to prevent an entity from manipulating the market by submitting low bids to drive out competition. However, these rules are being used to protect fossil fuel energy from competition with renewables.
In other words, they’ve intentionally put rules in place that make renewables less competitive and penalize them in the auctions because of their clean attributes — attributes the states are seeking to develop in order to meet their clean energy and climate mandates. Notably, ISO-NE does not consider any of the federal or state subsidies for fossil fuels as state support.
They’ve also adopted unusual, opaque methods to estimate the costs of new energy resources, which don’t rely on the best available data or make sense to outside experts. So, on ISO-NE’s balance sheets, renewables like solar, wind, and energy storage appear more expensive than fossil fuels and therefore less likely to be chosen in the auctions. ISO-NE attempted to increase the viability of renewables in these auctions by creating a secondary auction, known as Competitive Auctions with Sponsored Policy Resources (CASPR), but in the last two years no renewables have been chosen in these auctions, and in its first year in 2019 only an extremely small amount of renewables were chosen. Because of its poor design, CASPR is being challenged in court.
The effect of ISO-NE’s market rules is clean energy largely being barred from the grid.
The result of this fuel bias has left New England over-reliant on fracked gas, increasing our vulnerability to the type of systemic failure that occurred recently in Texas, where failures at gas, coal, and nuclear plants were the main factors in deadly blackouts. These rules will also impose $3 billion in extra costs on customers over the next decade, all to support dirty electricity and add pollution burdens and health risks to our communities.
Massachusetts — and other states with climate laws on the books — are now in a bind. They cannot reach emissions goals if ISO-NE does not change its rules and stop creating barriers that lock out renewable energy. ISO-NE has acknowledged the problem but has done little else to balance our energy sources or accommodate state law — despite repeated calls from New England states.
ISO-NE must redesign its electric markets to remove these needless roadblocks. Solar, wind, and battery storage will be cost-competitive if given the chance. And a decade worth of polling shows that Massachusetts residents support a switch to clean power.
The climate crisis is here, and residents are already feeling its consequences. Coastal neighborhoods are flooding more often, with sea levels predicted to rise three feet over the next 50 years. Storms and heat waves are becoming more severe, threatening lives and livelihoods, and disproportionately harming communities of color.
Failing to embrace clean energy is also bad for business. The Biden administration recently announced big plans for offshore wind, which will bring thousands of new jobs to the region. Solar is a huge employer too, creating diverse types of local jobs at scale.
Renewables can also help address social inequity: Shrewd public policy can help bring clean energy directly to the communities that have the greatest affordability challenges and bear the greatest environmental burdens. A recent report found that, between 2014 and 2019, solar saved New England utilities and their customers more than $1.1 billion in wholesale electricity costs.
Finally, clean energy is good for our electricity grid. Distributing solar, wind facilities, and battery storage throughout the region can make the grid more resilient and reliable. It can also help homes and businesses keep the lights on in an emergency.
Ultimately, to meet our climate goals, states will either have to work around the grid operator — through massive public procurements that will displace the markets now administered by ISO-NE — or ISO-NE will have to change its ways. The status quo is unsustainable.
Our grid operator has had an enviable track record of keeping the lights on in New England and overseeing electricity markets. ISO-NE and other regional grid operators must now acknowledge reality and accelerate the transition to clean energy.
It’s time for ISO-NE to support the Commonwealth’s embrace of clean energy and climate leadership, or get out of the way.
Bradley Campbell is president of Conservation Law Foundation. Stephan Roundtree is Northeast director at Vote Solar.