A snag occurred on the evening of July 31, when the Legislature adjourned without acting on one of Patrick's priorities: a clean energy bill that would have had the state's utilities enter into controversial long-term contracts with Canadian hydropower generators to help finance the transmission to deliver the power to southern New England.
The hoped-for action in Massachusetts was the last piece of a puzzle that would have allowed changes to the ISO's tariff to move ahead in tandem.
Now, Massachusetts officials have to "rethink their options" before they can "talk to the other states about a way forward," NESCOE Executive Director Heather Hunt said in interview. That could include some type of administrative action, seeing that the Legislature does not reconvene until January, she said.
"There's a good bit of opposition to what the governors have been trying to accomplish," Hunt said, citing some of the region's generators, including the New England Power Generators Association (NEPGA).
She singled out generator EquiPower Resources Corp. as attempting to be "constructive" and understanding that "we've got a problem to solve and the markets haven't done it to date." EquiPower is among dozens of stakeholders that have filed comments in recent months on NESCOE's website.
"We opposed the [Massachusetts] bill vehemently," NEPGA President Dan Dolan said in an interview. The measure would have enabled an "intrusion by the states into wholesale power and gas markets," Dolan said.
He faulted the governors' effort for its lack of details but even more so for the pipeline portion of the plan's effective subsidizing of one fuel -- natural gas -- over nuclear, coal and oil, not to mention its implicit intention to import less expensive hydropower from Canada in the region, which could undercut existing generators' margins.
"How does this not violate the Federal Power Act?" Dolan asked about the use of the ISO's electricity tariff to subsidize the construction of a natural gas pipeline. "I'm not sure this fits squarely into any jurisdiction FERC has."
Indeed, while FERC does regulate interstate pipelines, the use of an independent system operator's tariff to get one built is unprecedented.
"This putting a subsidy for a fuel into a wholesale electricity market tariff is not something that's ever been done before," said the ISO's van Welie.
"And there are lots of questions about whether the states and the ISOs should be doing it, firstly, and secondly, whether the FERC will actually approve it or not, whether they have the authority to approve it," he said, recounting the ongoing debate in the region.
New England Effort to Expand Gas Pipelines, Transmission Hits a Snag
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