ISO New England "ISO New England is the independent, not-for-profit company authorized by the Federal Energy Regulatory Commission (FERC) to perform three critical, complex, interconnected roles for the region spanning Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, and most of Maine. Together, these three responsibilities help protect the health of the region’s economy and the well-being of its people by ensuring the constant availability of competitively-priced wholesale electricity—today and for future generations. The ISO’s unique mission requires active stakeholder involvement, as well as a highly skilled workforce across a wide range of disciplines. One goal lies at the heart of this mission: reliability.” 

 

ISO New England, External Market Monitor, “2014 Assessment of the ISO New England Electricity Markets” (June 2015)

 

ISO New England, Internal Market Monitor, “2014 Annual Markets Report” (5.20.15)

 

ISO New England, “2013 ISO New England Electric Generator Air Emissions Report” (December 2014)

 

ISO New England, “2013 Assessment of the ISO New England Electricity Markets” (prepared by the External Market Monitor) (June 2014)

• “The electricity market performed well under tight natural gas system conditions, providing incentives for suppliers to conserve gas and switch to fuel oil. The number of days when significant amounts of fuel oil was needed due to the limitations of the natural gas system increased from none in 2012 to 22 days in 2013.” 
• “The average output from coal-fired and oil-fired generation increased by 360 MW in 2013 and 1,000 MW during the winter months because of the improved economics of these fuels relative to natural gas.  Overall, these supply increases and limited gas transmission capability into New England led to a 17 percent reduction in gas-fired generation from 2012 to an average of 5.8 GW in 2013. In the winter months, gas-fired generation fell to an average of 4.6 GW in 2013, down 25 percent from the previous year.” 
• “periods of natural gas price volatility generate substantial energy net revenues for dual-fueled units.”
• “In addition, oil-fired generation becomes economic when the gas prices rise above oil prices. If an oil-fired generator has limited on-site inventory, it is efficient for the generator to conserve the available oil in order to produce during the hours with the highest LMP. Accordingly, it is competitive for such generators to raise their offer prices to reflect these opportunity costs.”
• “Oil-fired generation averaged less than 30 MW per hour in most months, but increased substantially when gas prices rose sharply. Average oil production rose from 30 MW in the winter of 2011/12 (i.e., December 2011 to February 2012) to nearly 200 MW in the winter of 2012/13 and over 800 MW in the winter of 2013/14 as average natural gas prices rose from roughly $4.40 to $11.50 and $19.60 per MMbtu over the same periods. Coal production increased from an average of 720 MW in the winter of 2011/12 to 1,660 MW in the winter of 2013/14 because of the low cost of coal relative to natural gas. Gas-fired generation during the winter fell from an average of 6,580 MW to 3,860 MW from 2011/12 to 2012/13.” 

​

• “Cold weather conditions (indicated by high HDD) caused natural gas prices to rise above $20 per MMbtu on 14 days in the winter of 2012/13 and on 42 days in the winter of 2013/14. Oil-fired generation increased sharply on these days, especially during a seven-day period in late January 2014 (i.e., from January 22 to January 28). During this seven-day period, natural gas prices averaged $53 per MMbtu and oil-fired generation averaged 4,280 MW per hour, which accounted for 41 percent of total generation from oil during the entire three-month period.” 

​

 

ISO New England, “2012 ISO New England Electric Generator Air Emissions Report” (January 2014)

• “Figure 4-1 illustrates the new generating capacity that was added to the ISO New England system during 1999 through 2012, 87% of which was gas-fired generation comprised mainly of combined cycle technologies. From 1999-2004, 9,053 MW of new capacity was added and nearly 100% of the new capacity additions were gas-fired, combined cycle technologies. From 2005-2012, 2,320 MW was added, with combustion turbines and combined cycle plants capable of burning natural gas or distillate oil making up 79% of this new capacity. The remaining additions consist of nuclear uprates and renewable generation.”

• “Figure 5-1 shows the annual aggregate NOX, SO2, and CO2 air emissions for the years 2001 through 2012. Since 2001, NOX emissions have dropped by 66% and SO2 by 92%, while CO2 has decreased by about 21%.”

​

• “Figure 5-2 illustrates the annual average NOX, SO2, and CO2 air emission rate values (lb/MWh), for the 2001 – 2012 time period. These annual emission rates were calculated by dividing the total air emissions by the total generation from all units. Since 2001, the annual average NOX emission rate has decreased by 67%, SO2 by 92%, and CO2 by 23%.”

ISO New England, “2013 Annual Markets Report” (5.6.14)

• “Table 1-2 shows wholesale electricity costs (in dollars and dollars per megawatt-hour; $/MWh) by market in 2013 compared with 2012. Total costs increased by about 45%, while energy costs increased by about 57%. As discussed in the sections that follow, the increase in energy costs was the result of an increase in natural gas prices.”

• “The reliability of New England’s wholesale electricity market is dependent on the availability of natural gas and fuel oil. … A relatively static gas pipeline capacity in New England that has had to accommodate a 37% increase in overall natural gas consumption since 1999.  In fact, the increase in natural gas consumption by New England generators since 1999 accounts for more than 95% of the overall increase in natural gas consumption for the region. The confluence of these forces has resulted in a much higher proportion of electricity being generated by gas-fired generators in New England, while pushing gas pipeline capacity to its limits during periods of peak gas demand. As a consequence, the reliability of New England’s wholesale electricity grid is dependent, in part, on the owners and operators of natural gas-fired generators effectively managing natural gas deliveries during contemporaneous periods of high gas and electric power demand. Reliability is also dependent on the region’s oil fleet having sufficient oil on hand to operate when gas prices rise to levels that exceed the price of oil. When this occurs, oil units are dispatched more frequently because they are the least cost source of energy.”
• “Natural gas prices in New England during this period reached a high of $35/million British thermal units (MMBtu). In contrast, natural gas prices across the rest of the country were in the range of $4/MMBtu. On January 23–25, the price of natural gas in New England surpassed the approximately $18/MMBtu price of 0.3% sulfur no. 6 oil."
• “The interstate pipelines have a combined capacity of approximately 3,500 MMcf/d to serve New England’s residential, commercial, municipal, and industrial customers, as well as the demands of the region’s natural-gas-fired power plants. During the peak winter period for natural gas demand, natural gas consumption can easily reach the capacity limits of the pipelines. For example, daily consumption during January 2012 averaged 92% of the capacity limit within the 2013 Annual Markets Report 34 ISO New England Inc. region. High gas demand relative to pipeline capacity in New England has led to elevated natural gas pricing, compared with nearby regions.”
• “Table 2-9 details this trend, showing the average day-ahead natural gas basis by month relative to the average prices for the Marcellus Shale region. New England wholesale gas customers often pay a significant premium for gas compared with nearby regions; this premium has been as great as 637% in a month. Moreover, the basis differential for New England has exceeded the basis for New York City in every month but one and has been about 50% higher over the entire period than New York City’s basis.”

ISO New England, Press Release: “2013 Wholesale Electricity Prices in New England Rose on Higher Natural Gas Prices” (3.18.14)

• “Preliminary data show that the average price of wholesale electric energy rose to $56.06 per megawatt-hour (MWh) in 2013, up from 2012’s historic low price of $36.09/MWh. … In 2013, preliminary figures show that the price of natural gas averaged $6.97 per million British thermal units (MMBtu), up 76% from the 2012 record low price of $3.95/MMBtu.”
• “The capacity of pipelines serving New England is not sufficient to serve this increasing demand for natural gas to heat homes and businesses and to generate electricity. Pipeline constraints, particularly in winter when home heating needs raise demand for natural gas, have pushed up the average spot price for natural gas in New England to the highest in the country. Until new infrastructure alleviates these pipeline constraints, prices for natural gas and wholesale electricity are likely to remain volatile.”
• “The higher energy price pushed the total value of the region’s wholesale energy market to about $8.0 billion in 2013, based on preliminary data, up 54% from the $5.2 billion value in 2012.”

   

ISO New England, Press Release: “New England Winter Grid Outlook: ISO-NE Forecasts Sufficient Capacity to Meet Demand” (12.3.12)

• “And while we currently are working on several mid- and long-term solutions with stakeholders, including changes to the wholesale electricity markets, these will take time to implement. In the meantime, the ISO will continue to turn to coal- and oil-fired generation when necessary to ensure that the power needed to meet consumer demand and maintain grid reliability is available this winter.” -- Vamsi Chadalavada, executive vice president and chief operating officer of ISO New England Inc.