Friday, March 7, 2014
Worried that there might not be enough natural gas in New England this winter to keep all the lights on reliably, the region's electric grid operator wants oil-fired power plants to stockpile 4.2 million barrels of oil by Dec. 1, for backup.
Tom Welch, chairman of the Maine Public Utilities Commission
Staff file photo by Joe Phelan
It also wants more big businesses to agree to shut down power-guzzling equipment during severe weather, to help lower the demand for electricity.
ISO-New England is seeking to avoid a repeat of last winter, when a five-day cold snap in late January and a blizzard in early February tested the region's power supply. During the cold snap, some big businesses were told to cut back energy use. During the blizzard, more than six gas-fired power plants informed ISO-New England that they couldn't get fuel. At the same time, some oil-fired units reported only a few days of fuel left, and some had deliveries suspended in the storm.
ISO-New England has been increasingly concerned about the risk from the region's overdependence on natural gas for making electricity, as aging, uneconomic oil plants are being taken off line. In a recent operations summary of last winter's events, it called the condition "unsustainable."
The growing risk has the ISO searching for short-term solutions. The idea of stockpiling oil and asking more businesses to cut power use to avoid a crisis is the focus of a draft reliability plan the grid operator is preparing for the 2013-1014 heating season.
The ISO soon will ask the Federal Energy Regulatory Commission to approve the plan. A draft copy was obtained last week by the Maine Sunday Telegram.
The urgency highlights the broader challenge facing energy providers and policymakers: Adding new pipeline capacity to bring more gas into New England is one option that could help solve the gas shortage. However, even the most-likely-to-happen pipeline projects are at least a couple of years away -- no help if the Northeast has an especially severe winter before then. The threat of rolling blackouts remains a real one this winter, the ISO maintains, if a critical mass of power plants go off line during a period of superhigh demand.
"It was a delicate balancing act during the cold spell and the blizzard," said Marcia Blomberg, a spokeswoman for the ISO. "If the winter had been colder and other circumstances had been less favorable, the situation could have been more severe."
Blomberg declined to say how close the systems operator was last winter to triggering rolling blackouts, saying several emergency measures could have been taken short of that. She also noted the ISO is working with power plants and pipeline operators on market-based solutions, such as better coordination of gas deliveries, that could ease the problem.
"This really is an insurance policy for the region," she said of this winter's oil stockpile plan.
Ratepayers across New England would pay for this insurance policy, although it's too early to say what it would cost and how the charges would be billed. The program is estimated to cost $16 million to $42 million, Blomberg said.
Despite the ISO's pronouncements, not everyone agrees the plan is the most cost-effective, or even necessary. One environmental group, the Conservation Law Foundation, opposes the extra costs and air pollution that would come from burning more oil. It contends the ISO is using scare tactics to promote pipeline expansion in New England. Instead, the group proposes importing more liquefied natural gas through Atlantic Canada.
State utility regulators also are weighing the merits of ISO's proposal.
"I'm not thrilled with the idea of solving the problem with oil," said Tom Welch, chairman of the Maine Public Utilities Commission, "but on the other hand, I understand the ISO's reliability situation."
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