Groups Intervene at FERC to Stop New England Grid Operator from Increasing Costs to Consumers

Washington, DC - Sierra Club, Union of Concerned Scientists, and Conservation Law Foundation filed a protest on Friday at the Federal Energy Regulatory Commission (FERC), regarding a plan by New England’s grid operator, ISO New England (ISO-NE), that would increase costs to consumers because of the region’s overreliance on methane gas for power generation.   

The protest is in response to the revisions ISO-NE’s submitted to FERC for its Inventoried Energy Program. An already controversial program, ISO-NE now expects it could  cost consumers $500 million more than originally projected because liquified methane gas (LNG) costs have skyrocketed since 2019. 

Through the program, ISO-NE pays most gas and oil generators for having stocks of fuel stored onsite or readily available during winter cold snaps. ISO-NE sets the price the power generators get paid based on the cost of contracting for imported LNG supply. Yet, the program contains no safeguards to ensure against paying generators for something they would do anyway, since high energy prices make it in their interest to have fuel on hand to sell energy. Additionally, most of these generators are already getting paid to provide capacity, meaning they are already responsible for having the fuel necessary to perform during grid emergencies. 

Sierra Club and other organizations, including state utility regulators, challenged ISO-NE’s Inventoried Energy Program at FERC when it was first proposed in 2019, and then sued FERC for approving it. That lawsuit resulted in a court order removing coal, nuclear and biomass generators from the program because payments to them would not improve reliability, but left the program in place for gas and oil resources. ISO-NE now seeks to dramatically increase the cost of this program without showing that it would improve reliability. 

In response, groups released the following statements: 

Samantha Dynowski, State Director of Sierra Club Connecticut, said: “More expensive fossil fuel power is not what Connecticut residents want or need. Our state has the highest electricity rates in the continental US due to our overreliance on costly fossil gas. This is another in a long line of bad ISO New England policies that keep Connecticut residents from accessing more clean and renewable power and realizing lower electricity costs and another reason why Connecticut policymakers must demand reform at ISO-NE.”

Susan Muller, senior energy analyst at the Union of Concerned Scientists, said: “ISO New England’s Inventoried Energy Program, together with the Mystic Cost of Service agreement, will likely add over $1 billion to the already sky-high electric bills in the region. The shocking price tag for these LNG-based winter reliability programs should be made transparent to consumers, and they deserve a far better justification for having to bear the cost burden than the ISO has provided. Going forward, we need to decrease our dependence on expensive imported fuels and shift to more local, stably priced solutions.”

Phelps Turner, Senior Attorney at Conservation Law Foundation, said: “Electricity bills are already far too high in New England. Now is the time to end our addiction to the expensive, polluting fossil fuels that harm our communities and our budgets. ISO New England cannot be allowed to pass on the costs of storing these polluting fuels on to families and businesses.”   

Casey Roberts, Sierra Club Senior Attorney, said: “Instead of raising costs for consumers to subsidize generators for the cost of getting their own fuel, ISO New England should be working to create a reliable, lower cost electric system long term by bringing more wind and solar online, coupled with energy storage and the strategic management of electrification. FERC should reject ISO New England’s plan to make consumers pay for uncertain reliability benefits.”