Heading towards winter, New England debates the role of natural gas
The price of electricity has spiked this summer in many parts of New England, and it’s mostly due to the price of natural gas.
But stakeholders responsible for the region’s electricity grid disagree on whether to decrease the region’s dependence on natural gas — or strengthen and build new gas infrastructure.
The issue came into focus at a meeting last week in South Burlington, Vermont, when federal and state regulators, power generators, utilities and others clashed over these questions.
The Thursday forum was convened by the Federal Energy Regulatory Commission (FERC) to discuss challenges the region faces during winters.
Ahead of the meeting, ISO New England, which operates the region’s electricity grid, released a letter and draft “problem statement” warning that certain weather scenarios and uncertainty in global natural gas markets could put stress on the system this winter.
The group said New England needs to continue supporting natural gas infrastructure — specifically, a facility that imports liquefied natural gas in Everett, Massachusetts — to maintain reliability in the system.
But at the meeting, the chair of FERC told the group that New England needs to lessen its dependence on imported liquefied natural gas (LNG).
Chairman Richard Glick, a Democrat appointed by President Biden, said the challenges the region is facing require a different solution.
“We have to talk about what else needs to be done,” he said. “Because relying on importing LNG, as we’ve seen, with world events over the past year, is not a sustainable solution. We have to figure something else out.”
Clean energy advocates weigh in
New England currently makes about 53% of its electricity using natural gas.
Costs have gone up since Russia’s invasion of Ukraine, and some advocates say transitioning the region away from fossil fuels would both decrease price volatility and help New England counter climate change.
Scientists say New England will see more frequent droughts along with heavier storms in the coming decades, and the region is already warming faster than the rest of the globe, on average. Those changes present a challenge for the grid — outages caused by extreme weather have doubled in the past 20 years, according to the Associated Press.
Mireille Bejjani, who leads the environmental nonprofit Slingshot, said ISO New England’s belief that natural gas and reliability must go hand-in-hand is misguided.
“In reality, renewable energy and reliability are not mutually exclusive,” they said.
Bejjani and others spoke at a press conference last week ahead of Thursday’s FERC gathering.
“In reality, renewable energy and reliability are not mutually exclusive."Mireille Bejjani, Slingshot
The advocates called on leaders to prioritize transitioning away from fossil fuels as the region deals with climate change and high energy prices.
Melissa Birchard, with the Acadia Center, called bolstering gas infrastructure a Band-Aid solution.
“We need ISO New England to stop growing in the wrong direction… to stop subsidizing gas and oil at the expense of clean energy and at the expense of consumers," she said. "To keep the lights on, we should be investing in clean energy without any more delay."
In an explainer, the Acadia Center and other clean energy advocacy groups say there are clean solutions that could be deployed within months to help with winter reliability, like energy efficiency, or demand management, which encourage people to shift their electricity use and reduce stress on the grid.
Wind, solar, battery storage, expanded demand management, and a more capable transmission grid are longer-term solutions to the problems we face, the groups say.
Regulators disagree on the best approach
At the FERC meeting Thursday, ISO New England president Gordon van Welie said the grid operator was “on board with the clean energy transition,” while re-emphasizing the need for retaining some fossil fuel assets for reliability.
Rebecca Tepper, chief of the Massachusetts Attorney General’s Office Energy and Environment Bureau, urged fellow regulators to support efforts to diversify New England’s electric power supply.
“You know, I think the underlying problem is that we are overly dependent on a single fuel,” Tepper said. “We are overly dependent on natural gas. And the region is at risk any time that we have some kind of disruption on that system. And customers — as we’re really seeing this winter — it also means they are tied to volatile international market prices.”
Much of the debate centered on how quickly the transition should be made.
Charles Dickerson, president of the Northeast Power Coordinating Council, told regulators his organization doesn’t disagree with New England states’ efforts to move away from burning fossil fuels for electricity, but feels the region needs natural gas to ensure reliable power while that transition is underway.
“You know, I think the underlying problem is that we are overly dependent on a single fuel..."Rebecca Tepper, Mass. Attorney General's Office Energy and Environment Bureau
He called for more natural gas infrastructure in the short term to bolster New England’s supply of quick-access fuel in the winter months.
“As we are moving from where we are now, and evolving towards that end state, there is a significant need to make certain that we have bridging technology, that we have retained the technologies that will help us deal with that,” Dickerson said.
New England is largely cut off from the rest of the country when it comes to its natural gas supply, and so is almost entirely dependent on imports.
Stakeholders discussed whether permitting new gas pipelines would be politically feasible in New England. Some, including representatives of major utilities, argued the priority should be on building new transmission infrastructure to access renewable power, particularly offshore wind.
But pointing to recent proposals in the region, FERC Commissioner James Danly expressed skepticism that New England states and ratepayers would support new pipelines for natural gas or new transmission projects.
Danly, a Republican appointed by former President Donald Trump, said New England states’ climate policies favoring renewables have created instability in the market.
“There are two problems that we all know we have here,” he told fellow commissioners Thursday. “The first is constraints in the natural gas supply, and the second are state policies that are driving dispatchable generation out of existence.”
“There are two problems that we all know we have here. The first is constraints in the natural gas supply, and the second are state policies that are driving dispatchable generation out of existence.”James Danly, FERC commissioner
Danly said as states transition to renewables, the region needs to maintain power plants that can use fossil fuels to generate on-demand power, especially in emergencies.
Vermont Electric Power Company CEO Tom Dunn countered that transmission projects do get approved when they have community support.
In the short-term, Dunn urged regulators to take investments in weatherization and efficiency seriously as partial solutions to the problems of cost and reliability during times when electricity demand surges.
He says these programs have cut Vermont’s peak electricity demand by 10% over the last decade.
“Making low-income customers’ homes warmer and more comfortable is an enormous benefit, along with saving them energy,” Dunn said.
Possible solutions, and this winter
Most panelists agreed that there is not much that can be done in the short term to mitigate the rate hikes New England electric customers are likely to see this winter.
Stakeholders proposed a number of longer-term changes to the system, including market design reforms and a regional energy reserve.
As the meeting drew to a close, participants remained divided on the root causes of the challenges facing New England’s grid, and who should be responsible for addressing them.
“How do we as six states fully assess what the energy security problem is, and how do we fix it?” asked Philip Bartlett, commissioner of the Maine Public Utilities Commission.
“It is just, it is reasonable, to require ratepayers to pay that cost which results in safe, reliable and increasingly renewable energy.”June Tierney, Vermont Commissioner of Public Service
“That is where we need to go over the next several months and year — is to figure out: what is the extent of this problem, and then let’s figure out all the market solutions, and if we need some out-of-market solutions as well, fine, but let’s figure out how to solve this problem in the most cost-effective way possible,” he said.
Vermont Commissioner of Public Service June Tierney told FERC her takeaway from the day was that federal regulators, state regulators and energy suppliers don’t have clarity about how to decarbonize New England’s power supply in a way that ensures safety and reliability for customers.
Pushing back on Commissioner Danly’s comments that state policies are driving unreliability in New England’s market, she said FERC could do more to present renewable power as a value to ratepayers.
“The issue is what is just and reasonable for ratepayers to pay?” Tierney said. “It is just, it is reasonable, to require ratepayers to pay that cost which results in safe, reliable and increasingly renewable energy.”