ISO New England (ISO-NE) has a record of artificially propping up more expensive coal, oil, and gas power plants at the expense of affordable, cleaner energy. Their “forward capacity market” serves to give huge subsidies to legacy power plants by granting funding three years in advance. (The Merrimack Generating Station in Bow also receives these subsidies.) The forward capacity market currently has a “minimum price offer rule” that limits clean energy projects in New England from bidding. According to Sabrina Shankman’s article in the Boston Globe, the rule was “created to help insulate fossil fuel power plants from having to compete against renewables that cost less due to state programs and subsidies that exist to help foster clean energy development. It created a floor below which a developer cannot bid, meaning that those less expensive energy supplies, like large-scale offshore wind or solar, aren’t able to compete.” It is absurd that this rule exists in the first place – if wind and solar are cheaper energy sources, then they should be prioritized in order to lower utility costs for ratepayers.
ISO-NE made a decision behind closed doors in early February 2022 to keep this rule for at least two more years – delaying renewable energy’s ability to enter the forward capacity market this year and severely limiting how much renewable energy will eventually be allowed in this process. Adding renewable energy to their forward capacity market is the bare minimum they could do to increase renewable energy capacity.
ISO-NE claims that their decision to bar renewable energy from the forward capacity market is to “ensure grid reliability.” There is little to no data proving that bringing more renewable energy into this system would disrupt grid reliability. What this decision does, instead, is feed into the greed and corruption of the fossil fuel industry. Shankman wrote, “In May of last year, ISO-NE announced its plans to eliminate the rule for New England, with a plan to lift it by an auction planned for February 2023. A few months later, in July, Dynegy, Calpine and Nautilus — all companies that own gas-fired power plants — offered up an amendment to that, asking that the rule be allowed to stay in place for two extra years to protect the reliability of the grid.”
It appears that ISO-NE decided to keep their “minimum price offer rule” in place after bribes from gas companies. Keeping the rule in place is not for “grid reliability” as ISO-NE claims, but it is to serve the interest of coal, oil, and gas power plants that are destroying the climate. ISO-NE claims to put the interests of New England residents first, but they are showing us time and time again that their decisions are made in the interest of their wealthy stakeholders and fossil fuel companies.
ISO-NE’s forward capacity market system is set up to serve dirty fossil fuels and stand in the way of New England’s transition to clean, renewable energy. Allowing renewable energy to take part in this system by eliminating their “minimum price offer rule” is a compromise from advocates and climate activists across the region. The forward capacity market upholds climate-destroying capitalist practices and will not allow us to complete a just transition to renewable energy. If ISO-NE can’t even give clean, CHEAP, renewable energy a chance in their market system, then their market system should not be allowed to exist. It is time for ISO-NE to stop listening to fossil fuel executives and listen to the ratepayers who do not want their utility bills to prop up dirty fossil fuels any more. ISO-NE: end the forward capacity market now, so that New England has a chance for a just transition to renewable energy.