Sunshine is the best disinfectant for secrecy at New England Power Pool
Secret regional tribunals with the ability to drive billions of dollars in infrastructure investments, concerning a service that few people can live without, are something of a rarity here in New England. But I happen to be a member of such a body: the New England Power Pool, more commonly known as NEPOOL.
It all started innocently enough. In the wake of the 1965 electricity blackout that plunged 30 million people in the northeast into darkness, New England’s electric utilities decided to improve their coordination to the point of having one control center in Holyoke, Massachusetts, run their bulk power transmission system for the entire region. NEPOOL was created for this purpose.
Fast forward to the 1990s and the national craze to restructure the electric industry. Every New England state but Vermont – and more than 15 other states around the country — decided to break up their electric utilities’ monopoly by forcing them to sell their generation assets and allow their customers to buy electricity from non-utility suppliers.
This required some help from the federal government. Under the Federal Power Act, whose key provisions date from the Great Depression, the Federal Energy Regulatory Commission (FERC) oversees the bulk power transmission system and sets wholesale electricity rates. To discharge these responsibilities, the FERC encouraged utilities in restructured states to form what eventually became known as regional transmission organizations (RTOs).
“Encouraged” is the key word here. Skittish about being sued successfully by utilities unhappy about losing their autonomy and their monopolies, the FERC did not require the formation of RTOs. Ergo, the FERC was eager to make concessions to get utilities to agree to turn over their systems to these nonprofit and ostensibly independent regional organizations.
What emerged here in New England was an RTO known as ISO New England, which took over and eventually rebuilt the control center in Holyoke. As with other RTOs, ISO New England would run the transmission grid, plan its future, assure access to the system for all generators, and oversee open and competitive markets for wholesale electricity.
NEPOOL survived this transition. It became an advisory body to ISO New England, opening its membership to all stakeholders according to a byzantine set of FERC-approved governance and voting rules. The Office of the Consumer Advocate is a voting member of the so-called end-user sector of the NEPOOL participants’ committee.
“Advisory body” is a bit of a misnomer here. Yes, NEPOOL and its participants committee provide a lot of advice to ISO New England. Recently, NEPOOL has been the locus of heated debate over whether to subsidize certain traditional generation facilities (particularly nuclear facilities and coal-fired plants) in the name of fuel security and limit the market participation of renewable generators that benefit from mandated utility purchases in Connecticut, Rhode Island and, especially Massachusetts.
But in the event ISO New England rejects the advice of NEPOOL, the so-called “jump ball” provisions of the RTO’s federally approved tariffs kick in. In such a scenario, the proposals of both NEPOOL and ISO New England go before the FERC on an equal footing.
The practical effect of this “jump ball” mechanism is to give NEPOOL enormous power over how New England’s electricity grid is operated and planned. No other region with an RTO has such a body. Perhaps coincidentally, electric customers in New England pay – by far — the highest transmission rates in the nation.
