NEPGA touts New England investment; cautions against Canadian hydro plans

New England Power Generators Association (NEPGA) President Dan Dolan told the Massachusetts Joint Committee on Telecommunications, Utilities and Energy on May 18 that the region is seeing lots of investment in new electric infrastructure and Dolan also discouraged reliance on significant hydroelectric imports from Canadian provinces.

The state legislative panel was holding a hearing into the “State of Energy” in the Commonwealth of Massachusetts.

Dolan used his testimony to praise the restructured electric market in Massachusetts and to advise against a solicitation program that could essentially “pick winners and losers.”

Since the late 1990s, generation developers have invested in new facilities providing over 13,100 MW of new, clean generation for New England. Massachusetts is currently seeing 900 MW of new power generation development “occurring right now while successfully participating as a founding member of the Regional Greenhouse Gas Initiative, a model for the Federal Clean Power Plan,” Dolan said.

But NEPGA has “very serious concerns with initiatives that could undermine both the billions of dollars of new infrastructure development as well as the investments that have already been made,” Dolan said.

“NEPGA has long raised the many costly issues presented by proposals to subsidize provincially-owned large-scale hydropower and using electric utility rates to finance new natural gas pipelines,” Dolan said.

“These proposals represent the ‘bad old days’ of guaranteed cost-recovery and profits for utilities while harming companies that have and continue to invest in Massachusetts without sweetheart deals for profit guarantees,” Dolan said.

Dolan believes that the “Clean Energy RFP” essentially bypasses the clear restrictions put in place by the Massachusetts legislature on preventing onerous long-term contracts from exceeding an explicit threshold and would appear to be directed at benefiting utility-affiliated projects such as Northern Pass (Eversource), the Green Line (National Grid) and Northeast Energy Link (National Grid).

Collectively, New England is seeing a massive wave of new potential investment in power generation facilities with 78 generation projects totaling 10,462 MW currently with applications pending to connect to the New England grid.

In addition, plant availability – or the amount of time that plants are available to run when asked to do so – has increased from 78% to 88%, Dolan said. This increase is enough to power an additional 1.96 million New England homes, Dolan said.

“What is remarkable is that New England’s average wholesale electricity price in 2014 was actually lower than the inflation-adjusted price in 2003, when the ISO New England markets as we know them first started,’ Dolan said in his written testimony.

The 2014 price of $64.30/MWh versus 2003 inflation-adjusted price of $64.47/MWh ($48.59/MWh nominal), Dolan said in the written testimony.

That is true despite the severe price volatility experience in the winter of 2013/2014 and also occurred despite seeing roughly 1,800 MW of power plants retire in 2014, Dolan said.

NEPGA represents competitive power generators in New England and its member companies represent approximately 25,000 MW of generating capacity throughout New England, including over 11,000 MW of generation in Massachusetts, or 85% of the electric generating capacity in the state.

The NEPGA chief also that several major natural gas pipelines are being developed to serve New England.

Finally there are four major transmission proposals pending in New England including the 340-mile proposed Green Line, the 187-mile proposed Northern Pass, the 230-mile proposed Northeast Energy Link and the 150-mile proposed New England Clean Power link. These merchant lines propose to bring 1,000 to 1,200 MW of power each, with target in-service dates ranging from late 2016 to 2019, Dolan said.

The NEPGA official noted that Massachusetts separated power generation from the electric transmission and distribution business in the 1990s.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.