Juno, the massive blizzard slamming the Northeast and New England today, is likely to rekindle memories of last year’s polar vortex that severely stressed the region’s power grid and sent electricity prices soaring.
It may also lend some urgency to the region’s dormant discussion on how to accomplish the construction of new natural gas pipeline capacity as well as transmission lines, which stakeholders agree is the only long-term solution to volatile pricing for natural gas and, in turn, electricity.
Snow accumulations of 2 feet or more and damaging winds were forecast for eastern and southern New England, New York City and Long Island, raising concerns about potential power outages.
ISO New England, the region’s grid operator, said yesterday it is monitoring Juno and "preparing to operate the grid through winter storm conditions."
In addition to working with stakeholders such as power plants and natural gas pipeline operators, it "staffed its backup control center and is scheduling additional control room operators and engineering, market operations, facilities, and information technology personnel to its main control center."
At 2 p.m., the ISO took steps to "cancel or postpone scheduled generation and transmission outages, increase power system flexibility, and ensure that the system is in the highest possible state of readiness," it said on its website.
In a statement, the New York Independent System Operator said it "has worked with the New York Transmission Owners to return to service transmission lines that were scheduled for maintenance outages. NYISO also has committed sufficient capacity to meet the forecasted load conditions. Additional operations staff is on call in the event we experience a high number of wind-related transmission outages," the grid operator said.
National Grid U.S., which provides electricity and/or natural gas service in portions of New York, Massachusetts and Rhode Island, told customers on Twitter that it had crews on hand to restore power outages or damage to the natural gas network.
ISO warns of market volatility with inadequate infrastructure
Less than a week ago, Gordon van Welie, president and CEO of ISO New England, hosted a comprehensive webinar looking at the state of the ISO’s grid and its infrastructure challenges in particular.
"If we don’t make the pipeline infrastructure investments and gas storage investments in the region, we should expect to see more volatility going forward, and at times there will be reliability threats posed to the system that we may or may not be able to manage," van Welie said.
But on Wednesday, market volatility seemed a remote threat as van Welie was mulling how "fortunate" the region had been to date with a winter unusually mild for New England. It had been far different from most of January 2014, when repeated bouts of frigid Arctic air taxed power markets in New England, New York, the Mid-Atlantic and Midwest.
Van Welie said "a very robust fuel inventory going into this winter," coupled with lower demand because of the mild weather, had led to a "softening on prices."
"I’m expecting that by the time we get through the winter, we will look back and say it’s been one of the milder winters on record," he said that day.
Six days later, the region may be rudely reminded of supply and price conditions one year ago. Those conditions spurred the governors of the six New England states last spring to launch a concerted effort to develop incremental gas pipelines for electric power system reliability.
But that effort stalled in late summer when the Massachusetts Legislature did not act before adjourning on a bill that would have complemented earlier action by other New England states EnergyWire, Aug. 11, 2014).
The path ahead is complicated by the results of gubernatorial elections in November. The region has two new governors: Democrat Gina Raimondo in Rhode Island, who replaced a Democrat, and Republican Charlie Baker in Massachusetts, who replaced a Democrat.
"It remains to be seen what the states will do. I think we need to give the new governors a chance to get together and figure out what they want to do," van Welie said.
Heather Hunt, executive director of the New England States Committee on Electricity, which represents the region’s governors, agrees with van Welie.
In August, Hunt informed the New England Power Pool, which represents market participants, that "there would be a pause in stakeholder process," she said. "We have not been back to NEPOOL with any further dialogue."
Both new governors "have publicly indicated that they consider solutions on energy issues in New England to be priorities. Reasonable expectations are that they’ll be priority placed on this issue in the very near term," Hunt said.
Last summer, a much-discussed option to find new gas pipelines involved asking the Federal Energy Regulatory Commission to approve changes in the ISO’s tariff, or rules, to enable the New England regional market to collect money from electricity customers to pay natural gas pipeline companies for new capacity.
As van Welie pointed out, it is not clear that FERC even has "the legal jurisdiction to approve such a filing" from the ISO.
"It was considered one way forward that made some good sense, but certainly not the only way forward. As states resume discussions about possible solutions, I think it’s reasonable to expect them to look at those other ways that might lead the region to a solution and not just go back solely to looking at a federal tariff," Hunt said.
The tariff change was not widely supported by the region’s power plant owners. "There were a number of generators who were very, very clear that they would sue," Hunt said. "One, in fact, said, ‘We’d like you to move this proposal to FERC for its consideration as quickly as possible so that we can sue you.’"
The new leadership in Massachusetts appears willing to move ahead. "In light of coal and oil plant retirements — Massachusetts will also need natural gas to meet demand in the coming years," said Peter Lorenz, the state’s chief spokesman on energy and environmental affairs.
"To meet the energy needs of the commonwealth, both [Energy and Environmental Affairs] Secretary [Matthew] Beaton and Governor [Baker] support expanding gas capacity along existing routes in addition to increasing energy efficiency and renewable energy investments," he said.
A lot may depend on what happens in the aftermath of Juno and during February. A late November EnergyWire survey found the nation’s power markets confident entering the winter (EnergyWire, Dec. 1, 2014). But a new forecast at the time from Andover, Mass.-based WSI warned that the East would be hit by much colder-than-normal weather in the latter part of January and February.