Commissioner Cheryl A. LaFleur
July 2, 2018
Docket Nos. ER18-1509-000,
EL18-182-000
Concurrence on ISO New England Waiver Request Regarding Mystic Units 8 and 9
“Today’s order rejects ISO-NE’s request for waiver of various provisions in its tariff to address regional fuel security concerns, but nonetheless concludes that the New England region is facing serious fuel security challenges that must be addressed. Specifically, today’s order directs ISO-NE to either submit tariff revisions that provide for a short term cost-of-service agreement, and a long-term market solution for the fuel security challenges facing the region, or show cause why the existing tariff remains just and reasonable without such revisions. I write separately today to elaborate on my support for this approach.
“As I have noted repeatedly over the past several years, the New England region has unique challenges with respect to the availability of fuel in the region. Since 2000, the region’s resource mix transitioned very quickly to natural gas-fired generation, but has not seen commensurate investment in natural gas infrastructure to support the regional need for gas. Moreover, large-scale development of renewables and transmission intended to offset the reliability impacts of the gas constraints has been delayed. Reasonable people can certainly debate the reasons for the lack of infrastructure development in New England, and I am optimistic about the region’s long-term prospects to transition to a clean and secure energy future. However, as this transition occurs, it is the Commission’s responsibility to ensure that reliability is maintained, including, as necessary, making adjustments to our wholesale markets. I believe that today’s action is a difficult but necessary step to achieve that end.
“ISO-NE’s waiver request is driven by concerns surrounding the economic viability of Mystic Units 8 and 9, 1700 MW of natural gas-fired generation, and the Distrigas Liquefied Natural Gas (LNG) import terminal, the sole fuel source for Mystic. While I support today’s decision to reject ISO-NE’s waiver request, in my view, the record in this case demonstrates how critically important both of these facilities are to ensuring regional reliability, including fuel security, for the coming years.
“I recognize that today’s order will be injected into the national debate regarding the asserted need for subsidization of certain “fuel secure” resources to ensure that our nation’s electric grid remains resilient. In my view, today’s order does not lend credence to a generic or national resilience need, or an approach to address that need. Rather, today’s order rightly responds to documented and specific regional challenges in New England, including its dependence on a unique generation facility that can be served only by imported LNG.1
Our responsibility to oversee regional efforts to ensure continuous reliable service to customers requires that we address specific situations as needed, but not draw inaccurate generalizations when they are not justified.
“Finally, while it appears that a short-term, out-of-market approach to ensure fuel security might be necessary, I continue to strongly believe market-based solutions are the best means to ensuring reliability in the region at the lowest cost for customers. Thus, I urge ISO-NE and stakeholders to work expeditiously to identify a market-based approach that will hopefully obviate, or at least limit, the need for out-of-market solutions that are more costly for customers.
“Accordingly, I respectfully concur.”
- 11 To my knowledge, this is the only such facility in the nation.