RGGI 56th Auction and the Consequence for Climate and Clean Energy Transition

BOSTON, MA-  On Friday, the eleven states participating in the Regional Greenhouse Gas Initiative (RGGI) released the results of the 56^th auction. Emissions allowances were sold for $13.90 each, generating $310 million for clean energy investments in participating states. The allowance price established a new record high for the RGGI program, which has now been in operation for over 13 years. The proceeds from sales of allowances in the 56^th auction were the second-highest of all time, lower than only the proceeds from the 54^th auction held in December of 2021. The auction narrowly avoided the release of additional allowances from the Cost Containment Reserve (CCR), with the clearing price ($13.90) falling just one cent under the CCR trigger price ($13.91).

Higher RGGI allowance price is good for climate, clean energy investment

The auction clearing price of $13.90 represents a modest 3% increase from the previous auction in March, but a significant 74% increase from the auction price from one year ago. The clearing price represents the price that power plant operators must pay for each ton of CO₂ emitted by their fossil-fuel-fired plants. The recent increase in allowance prices means the RGGI program is sending a stronger incentive to produce electricity from carbon-free sources, like wind and solar. Recent auctions have demonstrated the growing significance of the CCR – the two most recent auctions narrowly avoided the CCR trigger price, while the 54^th auction in December 2021 represented the first time since 2015 that additional allowances were released as a result of triggering the CCR.

The $310 million in proceeds generated from the 56^th auction represent a 5% increase from proceeds generated at the previous auction and a boon for the clean energy economy. Since the program launched, the vast majority of RGGI proceeds have been invested in energy efficiency and clean energy projects as detailed in the recently released report on RGGI investments in 2020. The $310 million in proceeds generated last Friday brings the annual to-date total to $603 million, already 65% of the previous year’s record-setting total proceeds with two more auctions remaining in 2022. Auction proceeds have increased dramatically in recent years. For example, the proceeds in the first half of 2022 alone are 15% higher than the total proceeds generated in all 2018 and 2019 auctions combined.  This is great news for climate action, the economy, and the growing workforce in energy efficiency and clean energy.

RGGI Third Program Review Offers an Opportunity to Direct Proceeds Towards Clean Energy Investments that Directly Benefit Environmental Justice Communities

Since its establishment, RGGI’s priorities have centered around reducing pollution from fossil fuel power plants and achieving climate solutions for RGGI states. Through the sale of CO₂ allowances, the market-based program has continued to produce revenue for participating states to invest in clean and renewable energy programs, energy efficiency programs to save energy, bill assistance, and much more. While states continue to report the benefit that RGGI contributes to meeting their climate goals, it is important to ensure that these proceeds are both spent on climate and clean energy and invested in communities that suffer disproportionately from the negative consequences associated with pollution from fossil fuel power generation.

The Third RGGI Program Review offers a golden opportunity to tailor the program to ensure that environmental justice communities are not left to bear a disproportionate burden and are actively involved in the development of strategies to ensure a smooth, equitable transition to a carbon-free economy. During the program review, it is essential that each RGGI state critically consider equitable investment into communities that face the worst effects of polluting power plants. This ongoing program review provides a chance for states to consider the recent auctions, history of investments across the states, the need to directly address environmental justice communities, and other mechanisms associated with the cap-and-invest program.

Acadia Center remains closely involved in RGGI policy conversations across the RGGI states and will continue to advocate for program reforms that drive equitable investment and climate action.

Media Contacts:

Ben Butterworth, Director Climate, Energy, and Equity Analysis
bbutterworth@acadiacenter.org, 617-742-0054 x111
198 Tremont Street, Suite 415, Boston, MA 02111

Joy Yakie, Environmental Justice Associate
jyakie@acadiacenter.org, 617-742-0054 x110
198 Tremont Street, Suite 415, Boston, MA 02111

Heat Pumps in Real Life

Here at Acadia Center, we’re big proponents of air source heat pumps. As we pointed out in EnergyVision 2030, electrifying heating can take a typical New England home from 6-8 tons of GHGs per year to less than one ton, which is why New England needs to electrify at least 10% of its building stock to be on track for 2030 climate goals. Heat pumps work by moving heat, not generating it – so they can be 3-4x as efficient as other heating or cooling sources. As I said in Wirecutter, “a heat pump is probably the biggest thing that consumers can do to help fight the climate crisis.” But even more important than climate, I have young kids, one with asthma, and our carbon monoxide alarm has gone off 3 times in the 9 months we’ve lived in this house. I’m getting anxious about the idea of burning fossil fuels in my house, particularly after reading studies that highlight the potential health impacts.  

So, in early May, I put my money where my big mouth is and electrified my 1880s, gas-boiler-heated house.  For now, we’re keeping the high efficiency boilers in place in case we need them in the next polar vortex, but I’ve already warned my husband that I’m going to fight hard to avoid turning on the fossil fuel system this winter.  Plus, with heat pumps, we got air conditioning just in time to sleep comfortably and cool during the recent heat wave!  

Here’s what I learned from the experience: 

• Think about what you want beforehand: we don’t have a forced air system (with which you could just drop in a central heat pump) so we went with mini-splits. I knew I wanted to get both heat and air conditioning capacity from the heat pumps, so asked for cold climate heat pumps (to carry us into, and maybe even through, the winter) with a unit in each of our bedrooms and the kitchen for air conditioning capacity. That also let us get rid of the ugly and high energy window units – savings right off the bat. 
• Think about what you are flexible on: I explained what I wanted, and then asked each vendor how best to get there and got proposals in multiple configurations. Do I need units everywhere, or can the living room/dining room/kitchen blob of doors and walls all get heated and cooled from one unit in the kitchen? (Yes, as it turns out) Can we put a smaller one in our family room over the garage because we also have a wood stove there? (Yes, but the price difference isn’t as much as you’d think, so we went with the big one to ensure enough AC).  
• Shop Around: I got quotes from 2 local heat pump specialists and one all things HVAC company, and the bids were different enough that I asked a lot of follow up questions did additional research into the different equipment they recommended, why they suggested it, what assumptions they made, and what “goodies” like wifi enablement came with the system.  I went with LG, which was a bit cheaper than the Mitsubishi hyper heat units. Each vendor also offered different financing options, in addition to the Mass Save HEAT loan, with 0% financing on up to $25,000 of efficiency improvements including heat pumps. 
• Look for incentives: Thanks to MassSave, we got a $10,000 rebate for our whole home system (7 heat pumps in total on 3 compressors). Because I know the MassSave program (I hold a seat on the EEAC), I knew to get my weatherization done first and ask for the right kind of units to ensure that the system I got would qualify for the max incentive. Check out the rebate forms up front to make sure you qualify, too. 
• Book it ASAP: Heat pumps are a hot market. Once you decide what you want and who you’re going to work with, don’t sit on the idea. I was able to get my install scheduled about a month after I made the call, but I’ve heard wait times are increasing. 
• Get ready for disruption… mostly outside: I was surprised that it took a full week of long days to get my system up and running, particularly since all the inside work seemed to be completed on day one. The pipes that carry the coolant to the wall units take a lot of planning and work, throughout the house, basement and garage. Then they’ve got to test the lines to make sure the coolant is working and won’t leak out.  
• Read the manual, ask questions, and learn new tricks: heat pumps have a lot of awesome settings (ionization, energy saving, jet mode, even programmable timers) but it can be complex to figure it out. Plus, the way that you save energy with a heat pump (set it and forget it) is very different than the way you save money with a gas system (though setbacks and catchups). The temperatures you’re used to seeing on the thermostat may also change. I’ve left the unit installed high on the wall in my office set at 76 all week but it’s been a pleasant constant 72 at my desk, in fact almost a little chilly! It silently blows air every now and then (seriously, this thing is QUIET!) and just keeps me cool, no questions asked.     
• Bolt the remotes to the wall: my brilliant installers thought to put my heat pump remotes in brackets next to the light switches. Now we always know where the remote is – even when my husband was the last one to touch it.  Wonder if that trick would work for the TV, too? 

I’m so happy I made the leap. For me, it was an investment in my home and my family’s quality of life, more so than a chance to save on energy bills. But they’ve sure delivered on that – the heat pumps are so quiet and so effective at cooling. I don’t have a great sense of how much power they’re using (almost want to rent a kill a watt meter from the library to figure it out!) but look forward to seeing my electric bill and evaluating the impact they had, compared to last summer’s window units.   

Look out gas stove. You’re next on the chopping block. 

Maine plan for wood-fired power plants draws praise and skepticism

A new law encouraging the development of wood-fired combined heat and power plants in Maine is drawing praise for its potential to benefit the economy and the environment.

But some climate activists are skeptical, saying questions remain about whether the program will cut carbon emissions as intended.

The legislation, signed by Gov. Janet Mills in April, establishes a program to commission projects that will burn wood to create electricity and also capture the heat produced for use on-site — heat that would go to waste in a conventional power plant.

Proposals for these facilities are expected to come from forestry or forest products businesses that could use their own wood byproducts to fuel the plants, saving them money on heat and electricity costs and providing an extra revenue stream when excess power is sold back into the grid.

“It’s renewable energy that is produced by local loggers and providing jobs for our local community,” said James Robbins, president of Robbins Lumber in Searsport, Maine, which has operated its own combined heat and power plant since 2018.

Supporters like Robbins say these facilities will uplift struggling sectors of the economy while helping reach the goals of Maine’s climate plan, which calls for the state to reduce emissions by 80% by 2050. Some environmental activists, however, doubt that wood can ever be an efficient fuel and worry that these projects will in fact increase carbon emissions.

“This is really an economic development tool to help prop up mills and not a climate solution,” said Greg Cunningham, director of the clean energy and climate change program at the Conservation Law Foundation.

Economy and environment?

Over the past 15 years, at least four of Maine’s paper mills have shut down, citing competition from overseas, decreasing demand, and soaring energy costs. A sixth had its operations sharply curtailed by an explosion at the facility in 2020.

These closures have meant less of a market for the wood chips and low-grade wood byproducts — often called residual wood — that lumber mills and loggers have generally sold as raw material for paper production. And with less demand, prices fell sharply, Robbins said.

“It created a huge surplus on the market here,” he said.

For businesses struggling to find buyers for their residual wood, the opportunity to build combined heat and power plants offers financial benefits. The systems can reduce or eliminate the cost of heating fuel, and the power produced can be sold back to the grid for additional revenue. These facilities could also help the industry as a whole by creating new markets for residual wood, thus buoying prices.

Robbins Lumber uses the heat generated from its system to power kilns that dry out lumber before sale. The electricity is all sold back into the grid through a power purchase agreement. The arrangement has been doing exactly what it was intended to do, Robbins said.

“We are also burning sawdust, bark, wood chips, and biomass from our outside contractors,” he said. “It’s definitely created a consistent market for residuals, which is what we hoped for.”

Advocates also believe these plants will be environmentally beneficial. If not put to another use, residual wood might otherwise have been left to decompose and release its stored carbon into the atmosphere. Used in one of these systems, however, the wood will displace the fossil fuels that would otherwise have been used to generate the same heat and power.

“Yes, it’s releasing CO2, but it was going to release CO2 through decomposition anyway,” said Ivan Fernandez, a professor at the University of Maine’s School of Forest Resources and a member of the Maine Climate Council. “As far as what the atmosphere sees, [combined heat and power] is a really good tool in the toolbox in our climate response.”

On-site combined heat and power facilities also make it easier for logging operations to thin small or weak trees from the forest and put that wood to use, Fernandez said. This sort of culling helps the larger trees grow yet more and sequester even more carbon, so there is no new loss of carbon capture because of the removal of the smaller trees, he said.

Furthermore, the continual growth of new trees allows for the carbon released by burning wood to be naturally recaptured, said Patrick Strauch, executive director of the Maine Forest Products Council.

“We look at it as a pretty good balance,” he said. “There is no doubt that it contributes carbon to the atmosphere, but our forest resources at the same time are pulling carbon out.”

Climate advocate unconvinced

Not everyone is convinced of the environmental wisdom of wood-fired combined heat and power, however. Burning wood produces more carbon dioxide per unit of heat generated than burning natural gas or heating oil. Many climate advocates worry that the carbon-capture capacity of forests is not enough to offset these higher emissions.

“There is significant disagreement on whether it is truly carbon neutral and emission-free,” said Jeff Marks, Maine director and senior policy advocate for environmental nonprofit the Acadia Center.

In theory, combined heat and power plants can be 75% to 90% efficient, according to some research. By way of comparison, centralized electric power generation and onsite heat production are 31% and 80% efficient, respectively, according to a report from Pennsylvania State University.

But many variables can lower that number. Of particular concern with wood is the moisture level of the fuel used: The more water in the wood, the less efficiently it burns. Residual wood from wood harvesting operations is likely to have a higher moisture content than wood from lumber processing.

Furthermore, the exact rules regulating the new law have yet to be hashed out, leaving more room for doubt, Cunningham said. The law, for example, requires projects to be “highly efficient,” but leaves it to the state Public Utilities Commission to define that term. The legislation also requires a biennial report assessing the success and sustainability of the program but, again, the details are scarce. And the law includes no provisions for the monitoring or enforcement of the rules it creates.

These factors leave Cunningham skeptical that wood-fired combined heat and power could ever be a climate-smart choice.

“It will not be highly efficient — it’s not feasible with a wood fuel,” he said. “It will not to any extent be a climate solution.”

The law caps the program at a total capacity of 20 megawatts statewide, a tiny fraction of the 3,344 megawatts of generating capacity the state already has. Still, the climate implications of the new law matter, Cunningham said.

“The money available in the state of Maine to fight climate change and invest in clean energy programs is finite,” he said. “When any amount of it is siphoned off for an anti-climate program, it’s problematic.”

Read the full article at Energy News Network here.

Federal Regulators Drop Obstacle to Funding Renewable Energy… in 3 Years

An obscure rule that blocks state-subsidized renewable energy projects from finding funding in a key New England energy market will sunset in three years – but renewable energy advocates say that isn’t soon enough to keep consumers from having to pay twice for an impending rush of offshore wind projects

The Federal Energy Regulatory Commission approved a plan by ISO-New England – which operates the region’s electric grid –  to phase out a controversial minimum offer price rule by 2025.

The rule – which was intended to exclude state-funded renewable projects from entering an annual auction of future energy generating capacity at low prices – has been a point of frustration for New England states with ambitious renewable energy goals.

Those states, including Connecticut, contend the rule forces electric customers to pay twice for the same generating capacity – once for renewables through state contracts, and again for mostly natural gas plants through the regional capacity auction.

The rule also made it more challenging to develop new, large-scale renewable energy projects, said Melissa Birchard, director for clean energy and grid reform at Acadia Center.

“We don’t even know exactly how much it’s depressing the development of clean energy,” warned Birchard. “Without the financial support to develop new resources, there’s a whole world of clean energy that may not be getting developed.”

In testimony to FERC, Susannah Hatch, regional lead for New England for Offshore Wind, noted that both the 800-megawatt Vineyard Wind project set to go online next year, and three other projects totaling 2,300 megawatts scheduled to go online in 2025, won’t be able to fully participate in the next two capacity auctions funding projects for 2026 and 2027.

Hatch told CT Examiner that those projects will still be built even though they won’t be able to fully participate in the capacity market. The real issue, she said, is that their capacity won’t be counted in the regional market, so customers will be stuck paying for a different power plant providing redundant capacity, she said – likely a natural gas-burning power plant.

“It will require ratepayers to pay for unnecessary capacity, so bills are going to go up in this day and age when that’s already happening because of foreign conflicts and the price volatility of fossil fuels,” Hatch said.

Birchard said that a limited exception will allow some offshore wind projects to participate in the next two auctions, but that won’t be nearly enough.

“When you add them up, the offshore wind projects alone substantially exceed [the exception],” Birchard said. “And that doesn’t account for battery storage or other clean energy resources.”

Matt Kakley, a spokesman for ISO-New England, said the organization believes the exception is large enough to cover the offshore wind resources that would actually want to enter the market in those two auctions, and that it’s “incredibly unlikely” that the minimum price would come into play for battery storage in that time.

“We’re pleased that the Commission saw this proposal for what it is — a reasonable step forward on New England’s transition to a decarbonized future,” Kakley said. “Despite claims to the contrary, this transition will provide a clear path for clean energy resources ready to enter the market over the next two auctions, while affording the region time to tackle other needed market reforms.”

But with wind projects accounting for 60 percent of proposals for new generation, and solar and battery storage making up another 36 percent – a rule that excludes much of that new generating capacity was unsustainable, ISO-New England told FERC.

But ending the rule too quickly, the ISO warned, could disrupt the market and make the grid less reliable. If, for example, the construction of those projects was delayed after clearing the auction, the renewables might not come online before the legacy plants are shut down. That could leave the region with less electric generation than it needs.

In its decision, FERC said the two-year phase out provides the necessary time for the market to make an “orderly transition” to a new mix of generating resources, including more weather-dependent renewables.

FERC Chairman Richard Glick, who voted in favor of the two-year phase out of the rule, said that despite his vote, he believes ISO-New England could and should have “done better” to end the rule immediately.

But Glick said even the delayed end to the minimum offer price rule represented a major step forward. Glick wrote that under previous orders FERC turned minimum offer price rules into a tool for blocking efforts by individual states to sponsor renewable energy projects.

That fight threatened consumers, the environment, and the viability of capacity markets, Glick said – as frustrated states, including Connecticut, considered abandoning those markets altogether.

“We need to do better and stop stalling,” Birchard said. “We need to keep beating that drum, because there’s a slew of additional reforms that need to take place over the next two or three years so we can move forward with our decarbonization goals.”

DEEP Commissioner Katie Dykes said that the department is still reviewing the decision, but said she is glad that it affirms an end date for the MOPR.

“We must redouble our efforts now on the further, significant reforms of the markets needed for a clean, reliable, affordable grid,” Dykes said.

Read the full article in The Connecticut Examiner here. 

Federal regulators uphold controversial grid proposal that could slow clean energy

ISO-New England’s Federal Regulator Fails to Require Swift Energy Reform, Clean Energy and Consumers Bear the Burden of More Delay

Boston, MA (May 27, 2022) – Today, the Federal Energy Regulatory Commission (“FERC”) issued an order unwisely approving ISO-New England’s controversial proposal to prolong by three more years the Minimum Offer Price Rule (“MOPR”). The MOPR blocks state-supported clean energy generators from bidding competitively in the ISO-New England capacity market. This market is intended to foster the pipeline of energy generation needed to meet the region’s future electricity needs. Instead of using ratepayer funds to promote the development of clean energy, the market has been locking in dirty fossil generation.

“FERC’s decision today fails to end once and for all the reign of this harmful rule,” said Melissa Birchard, Acadia Center’s Director for Clean Energy and Grid Reform. “The last thing we need is more delays to decarbonization and reliable clean energy. FERC and ISO-New England need to take decisive action now to show they’re behind state clean energy policy. They didn’t do that today.”

For the past decade, the MOPR has functioned as a subsidy for fossil fuel generators. By making it impossible for clean energy to get the same capacity payments that fossil fuel generators receive, it has held the region back from developing more and diverse clean energy resources.

On April 12, 2022, Acadia Center and its partners filed a protest of ISO-New England’s plan to keep the MOPR in place, asking FERC to reject the proposal and direct ISO-New England to remove the rule as quickly as possible. As a result of FERC’s action today, the MOPR will continue to provide a lifeline to the region’s most inefficient fossil fuel generators for at least three more years.

Acadia Center’s April 21 protest can be found here, along with its May 18 answer.

About Acadia Center:

Acadia Center is a regional clean energy research and advocacy organization based in the northeast supported by independent foundation grant and individual donors.

Media Contacts:

Melissa Birchard, Acadia Center
mbirchard@acadiacenter.org
857-276-6883

A key rule on the New England power grid will end, but not for a while

It will be nearly three more years before a contentious rule ends that has made it difficult for renewable energy to get onto the New England grid.

Late Friday night, days before its deadline that fell on the holiday weekend, the Federal Energy Regulatory Commission approved a plan from regional power grid operator ISO-New England to change how it acquires power for the grid in the future.

Connecticut’s Department of Energy and Environmental Protection Commissioner Katie Dykes, her counterparts in other states and even some of the FERC commissioners themselves had preferred an immediate change. The slow transition is already sparking worries that more fossil fuel power generation will get entrenched in the grid before the rule changes.

“FERC’s decision fails to end once and for all the reign of this harmful rule,” said Melissa Birchard, director for clean energy and grid reform at the regional advocacy group Acadia Center. The rule, she said, “will continue to provide a lifeline to the region’s most inefficient fossil fuel generators for at least three more years.”

The rule at the center of this controversy is known as the Minimum Offer Price Rule – or the MOPR. It is the backbone of the ISO’s once-a-year auction that determines what generating resources will go into its Forward Capacity Market, the future power it plans three years in advance.

In the auction, the low price wins, but it includes a formula that is heavily weighted against state-subsidized renewable energy projects — which, while coming down in price, are still more expensive than classic fossil fuel projects like natural gas power.

Connecticut and other New England states have renewable energy and greenhouse gas emissions targets, if not mandates. As a result of the MOPR, ratepayers wind up paying more for power to meet those targets.

Dykes has argued for years for changes to the rules, even threatening to pull Connecticut out of the forward capacity market. In mid-2021, discussions began on ending the MOPR by the beginning of 2023. But at the last minute, the ISO decided to file a plan with FERC that would delay full elimination of the MOPR for two additional years, until 2025.

Dykes and all but one of the other New England states didn’t support the change, but they didn’t oppose it either. “It’s a long way from not opposing to supporting,” she said early this year. She also pointed to the ISO’s contention that a transition period would better insure grid reliability.

She reiterated that stance in comments filed with FERC. But some dozen groups, including Acadia Center, filed comments and responses to comments opposing the slow transition.

Birchard now worries that the ISO will seek to delay the transition when the deadline approaches, or worse, try to revive the MOPR.

“The region deserves modern solutions, not delay tactics,” she said. “Russia’s war against Ukraine and the skyrocketing gas prices New England faces as a result puts in harsh relief the poor results of ISO-NE’s overreliance on fossil gas as a solution to every grid need.”

In an emailed statement, ISO spokesman Matt Kakley said: “We’re pleased that the Commission saw this proposal for what it is — a reasonable step forward on New England’s transition to a decarbonized future. Despite claims to the contrary, this transition will provide a clear path for clean energy resources ready to enter the market over the next two auctions, while affording the region time to tackle other needed market reforms.”

But FERC did not quite see it that way. The vote was 4-to-1, with one of two Republican commissioners opposing changing the MOPR. But the three Democratic commissioners were less than enthusiastic.

Chairman Richard Glick wrote, “I believe that the best outcome here would have been for ISO New England Inc. (ISO-NE) to immediately implement its new Minimum Offer Price Rule (MOPR) — i.e., without the Transition Mechanism. Simply put, ISO-NE could have, and should have, done better.”

Commissioners Allison Clements and Willie Phillips wrote jointly: “While immediate elimination of the MOPR would likely better serve ISO-NE’s customers than the proposal that has been filed, such a proposal is unfortunately not before us.”

The ISO also pointed out that, until the transition is complete, there will be a MOPR exemption for some offshore wind and solar, and battery storage will be in a very competitive position. Kakley also noted that long-term studies and ongoing changes to the market are designed to allow more renewables in.

Birchard said Acadia Center would be willing to work with ISO-New England on other critical energy reforms.

“But we challenge ISO-New England to embrace the clean energy solutions to today’s grid challenges instead of continuing to rely on costly and polluting fossil fuels as a crutch. The region deserves modern solutions, not delay tactics,” she said.

For her part, Dykes said, “We are still reviewing the decision. We are glad that the decision affirms a definitive end date for the MOPR. We must redouble our efforts now on the further, significant reforms of the markets needed for a clean, reliable, affordable grid.”

Read the full article in The CT Mirror here.

Feds approve plan to delay scrapping a New England energy rule that harms renewables

A controversial rule that makes it harder for renewable energy projects to participate in one of New England’s lucrative electricity markets will remain in place for another two years.

Late Friday night, Federal energy regulators approved a plan from the regional grid operator, ISO New England, to keep the so-called minimum offer price rule — or MOPR (pronounced MOPE-er) — until 2025.

The MOPR dictates a price floor below which new power sources cannot bid in the annual forward capacity market — a sort of futures market for power plants promising to be “on call” and ready to produce electricity when demand spikes.

The grid operator holds this annual on-call auction to lock in the power capacity it thinks the region will need three years in the future. Power generators that won a spot in the 2022 auction, for example, are on stand-by beginning in 2025.

By keeping the MOPR around longer, Melissa Birchard of the Acadia Center says it will be harder for the New England states to meet their decarbonization goals.

“The MOPR has held the region back for a long time and we need to see it go away forever,” she said. “This decision falls short of providing the certainty and speed that the region deserves.”

As WBUR detailed in a recent explainer about the MOPR, most everyone agrees the rule needs to go; the debate has been over when it should happen.

Environmentalists, consumer advocates and most New England state leaders wanted the grid operator to scrap the rule in time for the February 2023 auction. But the grid operator decided to support a “transition proposal” — first put forward by a few energy companies with natural gas plants — that would keep it until the 2025 auction.

Notably, Friday’s decision from the Federal Energy Regulatory Commission, which oversees the New England grid operator, was not unanimous. Four out of five members voted in favor of the plan, though some, like Commissioner Richard Glick, did so reluctantly.

Glick, who has been outspoken about the need to reform the MOPR, wrote in a statement that he would have preferred to see the grid operator, ISO New England (ISO-NE), eliminate the rule immediately.

Read the full article in WBUR News here.

CMP to seek 3-year rate hike that would raise average bill by $10

Central Maine Power is asking state utility regulators to approve a three-year reliability and grid upgrade plan that could raise bills for the typical home customer by as much as $10 a month by 2026.

The rate hike would support investments to make the distribution system more resilient to storms, restore power faster after outages and enable more renewable power generators to hook up as the state transitions to a cleaner-energy economy. The proposal, however, drew immediate opposition from Gov. Janet Mills, who called the plan to raise rates “outrageous” and said, “I will fight this.”

CMP notified the Maine Public Utilities Commission on Thursday of its intent to formally file a detailed rate case sometime this summer. The company has dubbed the plan Powering Maine and characterized it as an attempt to keep distribution rates relatively stable and predictable over the next few years.

For an average home customer using 550 kilowatt-hours a month, the plan would increase a total electric bill by roughly $5 a month in 2023, and up to $2.50 a month in each of the following two years.

An average monthly residential electric bill today, including both distribution and supply, is $126. If the full rate request is approved, it would increase that bill by roughly 4 percent in 2023.

The company also is seeking a return on equity of between 10 percent and 10.5 percent, which it says reflects current market conditions. Return on equity is a measure of profitability and financial performance that’s important to investors.

CMP’s request is only for the distribution costs associated with bringing power over poles and wires to homes and businesses. It’s not tied to electricity supply charges, which have surged this year in response to high natural gas prices and world events. CMP doesn’t generate power; it only distributes it.

But Mills said any plan to increase electric bills for consumers already dealing with widespread inflation in the economy “adds insult to injury.”

The governor called on CMP to hold off filing for the rate increase, and said if the utility goes ahead, she will have the Governor’s Energy Office intervene in the case to oppose it.

If the PUC rejects the rate increase, she said, it would send a “clear message to our utilities that their focus needs to be on improving performance, reducing cost burdens and restoring trust.”

Mills’ comments suggest that energy prices may emerge as a campaign issue, as her race for re-election against former Gov. Paul LePage moves closer to the fall.

Late Thursday, the Maine Republican Party attempted to tie CMP’s request for a rate hike to Mills’ policies, contending that a provision in a utility reform bill she introduced that requires utilities to plan for climate change is forcing utilities to spend more money. The bill was co-sponsored by two Republicans who serve on the Legislature’s Energy, Utilities and Technology Committee, Sen. Trey Stewart, R-Aroostook, and Rep. Nathan Wadsworth, R-Hiram.

“It’s the same old tune from Janet Mills: make Mainers’ lives more expensive in order to fund left-wing policies,” Maine GOP Executive Director Jason Savage said in a statement emailed Thursday night.

Acknowledging the impact of any rate increases on household budgets weighed down by today’s high inflation and energy prices, CMP’s president and chief executive, Joseph Purington, said the investments are needed to continue progress on updating the electric grid. The trick is finding a balance in spending that makes the distribution system more resilient but isn’t an undue burden for customers, he said.

“CMP must continue to make smart system updates that improve reliability now and enable the company to successfully perform our role in helping Maine meet its climate change goals,” Purington said.

CMP’s multiyear rate request comes as the manner in which utilities decide how to make investments in their infrastructure is about to undergo a historic change.

In early May, Mills signed L.D. 1959. The new utility reform law beefs up utility accountability, but it also requires companies the size of CMP and Versant Power to take part in an “integrated grid planning” process, aimed at supporting the state’s transition to a renewable energy economy and meeting aggressive climate action goals.

A Satisfactory Result – the Sale of Narragansett Electric by National Grid to PPL Corporation Approved