Transmission

Transmission Projects Pay Off for the Region

Because the electric grid is so tightly networked, each state shares in the benefits—and costs—of reliability upgrades to the transmission system. New England’s electricity consumers, who ultimately pay project costs, receive many benefits from this investment in the regional transmission system:

• Less risk of expensive, dangerous blackouts—The 2003 Northeast Blackout, for example, affected 50 million people in the Midwest and in the northeastern US and Canada, claiming three lives and an estimated $4.5 to $10 billion in losses. New England was largely spared during the blackout but subsequently took action to strengthen weak areas of the region’s transmission system. Today, a robust transmission infrastructure, along with a strong fleet of power resources, rigorous system operator training, and strict adherence to industry reliability requirements, can help the ISO manage system disturbances.
• Less air pollution—Improving system weak spots and eliminating transmission bottlenecks has allowed new, efficient, low-emitting generators, such as those running on natural gas, to interconnect to the grid, run more often, and displace older, less efficient resources.
• Lower wholesale energy costs—Enabling the integration of these resources has also helped drive down wholesale electricity prices because of the relatively low cost of natural gas. Congestion costs are also extremely low today: in 2017, average energy-market prices at the wholesale Hub and across the six states differed by just 0.7%–2.1%. Additionally, payments to resources providing operating-reserve support in transmission-constrained areas have markedly declined, and the region has been able to eliminate costly reliability contracts needed in the past to keep older, inefficient resources from retiring to ensure reliability.
• Positioning for a greener, hybrid grid—A strong, state-of-the-art transmission system is the “backbone” needed to support the connection of more renewable energy and the transition to the smart grid, which will open the door for more effective use of distributed energy resources.

Improvements Have Lowered Energy Costs

New England’s revitalized transmission system and more efficient fleet have driven striking decreases in congestion costs and uplift costs, called Net Commitment-Period Compensation (NCPC). Uplift represents payments to make sure a resource following ISO dispatch instructions is no worse off financially than in the best alternative generation schedule. Additionally, the ISO has not had to use special reliability contracts since 2010.

The Region Is Attracting New Generation, but Transmission Improvements Are Needed to Interconnect More Wind Power

Higher market prices signal an investment opportunity for new, more efficient power resources to replace generators that are closing down and to displace those that are inefficient or expensive. As of April 12, 2018, the ISO was slated to study over 100 grid-interconnection requests from proposed new generators, though many may not ultimately be built. (Historically, almost 70% of proposed new megawatts in the ISO Generator Interconnection Queue have ultimately withdrawn.) These proposals include about 8,000 MW of proposed new on- and offshore wind power. (Read more about proposed new resources in the region.)

Because of the large distances from some of the proposed onshore wind power projects to the existing grid, major transmission system upgrades will be needed to deliver more of this power to far-away consumers. Proposed offshore wind projects closer to New England load centers may require fewer upgrades to the existing grid, but building wind turbines offshore is typically more costly than placing them on land.

Refining the Elective Transmission Upgrade (ETU) Process to Support State Efforts to Connect More Renewables

In February 2015, the ISO, after working with stakeholders, implemented improvements to the processes for evaluating the interconnection of ETUs and to incorporate ETUs into the Forward Capacity Market. ETUs are transmission lines funded by private parties—not through regional cost-sharing. While not necessary from a reliability standpoint, they can help enhance generator deliverability or facilitate the integration of renewable resources, such as remote wind resources, by enhancing portions of the grid. The New England states have taken the lead through a multistate request for proposals to potentially contract for additional transmission infrastructure to enable the connection of more renewable energy.

A new “clustering” methodology will also go into effect in 2018 that allows interconnection requests from multiple generators and ETUs to be studied together. This will help move forward the requests in northern and western Maine, where thousands of megawatts of proposed new resources, mostly wind, are seeking to interconnect to the regional grid. It may also help generators save on interconnection costs.

As of April 12, 2018, 18 ETUs were in the queue, totaling over 15,000 MW of potential transfer capability. They would deliver power primarily from large-scale hydro resources in eastern Canada and wind resources in northern New England.

Read more about the ISO’s responsibility for long-term transmission system planning on the Power System Planning page.