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Is the Region’s Energy Policy Going “Back to the Future?”
Kathryn M. Bailey
New Hampshire Energy SummitSeptember 23, 2019
CommissionerNew Hampshire Public Utilities
Region Has 3 Primary Energy Policy Drivers
2
Low Cost DecarbonizationReliability
Balancing These Objectives Is Tricky
3
Statute Emphasis on Safe and Reliable
4
Restructuring Statute Emphasis Is Cost
5
Post-Restructuring ISO Focus On Reliability
6
§ISO New England (ISO) created in wake of regional restructuring §ISO administers region’s bulk power system and wholesale electricity markets to ensure and maintain reliability§Least cost dispatch used to optimize efficiencies
Last 20 Years: Gas Revolution
7
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Oil FuelCell
Hydro Biomass Solar Wind Nuclear(uprate)
NaturalGas
MW Generation Added 1997-2017
Approximately 17,000 MW Total
§Billions spent in private investment on generation over past two decades
§Region has added 17,000 MWs of new generation• More efficient and flexible
resources
§Restructuring shifted risk associated with plants from ratepayers to shareholders
2018 Regional Energy Outlook at :https://www.iso-ne.com/static-assets/documents/2018/02/2018_reo.pdf
Evolution of the Region’s Energy Mix§Major shift from oil and
coal to natural gas§Nuclear still represents
about 30% of generation• Likely to go down with
recent retirement of Pilgrim
§Coal and oil once represented 40% of generation; last year about 2%
Source: ISO New England, New England Power Grid 2018-2019 Profile) 8
15%
31%
8% 7%
22%18%
49%
30%
10%8%
1% 1%0%
10%
20%
30%
40%
50%
60%
Natural
Gas
Nuclear
Renew
ables
Hydro Oil
Coal
2000 2018
Emissions Down Over Past Two Decades
9
§Air emissions from regionalgenerators have decreased over the last two decades
§From 2001 to 2017, annual emissions from SO2, NOX, and CO2 declined significantly
§More efficient generation, and the addition of renewables including solar has helped lower emissions region-wide
-74%
-98%
-34%
NOx SO2 CO2
Kiloton reductions 2001-2017
Source: ISO New England, New England Power Grid 2018-2019 Profile)
Competitive Supplier Options Exist
§In New Hampshire there are over 30 competitive suppliers and 130 aggregators registered to market electricity in the state
Aggregators Suppliers5Linx Enterprises, Inc. Diversegy, LLC NAUP Brokerage, LLC Agera Energy LLC
Abworth Energy, LLC EarlyBird Power LLC Neighborhood Energy of New England, LLC Ambit Northeast, LLCAccenture LLP Eisenbach Consulting, LLC NORESCO, LLC Calpine Energy Solutions, LLC
Acclaim Energy Advisors, Ltd.Electricity NH, LLC d/b/a Provider
Power NRG Kiosk LLC d/b/a Power Kiosk Champion Energy Services, LLCAchieve Energy Solutions, LLC EMEX, LLC Ollinger Global Power Consultants CleanChoice Energy, Inc.Alternate Power Source Inc. Empire Energy Patriot Energy Group, Inc. Clearview Electric, Inc. d/b/a Clearview Energy
Ameresco, Inc. Energy Auction House, Inc. Power Target, LLC Consolidated Edison Solutions, Inc.
Amerex Brokers, LLC nergyWize Progressive Energy Consultants, LLC Constellation NewEnergy, Inc.America Approved Commercial, LLC The Energy Executives LLC Reliable Power Alternatives Corp. Direct Energy Business, LLC
Anderson Energy Solutions, LLC Energy New England, LLCResident Power Natural Gas and Electric
Solutions Direct Energy Services, LLCANE American New Energy LLC Energy Professionals, LLC Resource Energy Systems, LLC EDF Energy Services, LLC
Arcadia Power, Inc. Energy Trust, LLC RexCal Energy LLC Electricity N.H., LLC d/b/a E.N.H. PowerAtlantic Group Energy, Inc. EnerNOC, Inc. RSG Energy ENGIE Resources LLC
Atlas Commodities, LLC ENGIE Insight Services Inc. RJT Energy Consultants, LLC ENGIE Retail, LLC d/b/a Think EnergyAtlas Commodities II Retail Energy, LLC Fidelity Energy Group, LLC Satori Enterprises, LLC Everyday Energy, LLC d/b/a Energy Rewards
AvidXchange, Inc Freedom Energy Logistics Secure Energy Solutions, LLC FairPoint Energy, LLCAxsess Energy Group, LLC Front Line Power Solutions, LLC Single Source Energy Solutions, Inc. First Point Power, LLC
Balanced Rock Energy, Inc. Global Energy, LLC SourceOne Energy Mega Energy of New Hampshire, LLCBeacon Energy Solutions LLC Global Energy Market Services, LLC Sprague Energy Solutions, Inc. Mint Energy, LLC
Best Practice Energy, LLC GoldStar Energy Group, Inc. Standard Power of America, Inc. NextEra Energy Services New Hampshire, LLC Better Cost Control, LLC Good Energy, L.P. Stanley Energy, LLC Nordic Energy Services, LLC
BidURenergy, Inc. H. P. Technologies, Inc. Strategic Energy Partners, LLC North American Power and Gas, LLCBKE Energy HealthTrust Purchasing Group, LP Summerview Energy, LLC PNE Energy Supply, LLC
Blitz Ventures LLC HomeADE, LLC Summit Energy Services, Inc. Reliant Energy Northeast LLCBold Coast Energy, LLC Hospital Energy Services, LLC Taylor Consulting and Contracting, LLC SmartEnergy Holdings, LLC
Bradley R. Lewis Hovey Energy, LLC 625 Main St. South Jersey Energy CompanyBridge Energy Services, LLC inCharge LLC TDL Energy Solutions Summer Energy Northeast, LLC f/k/a REP Energy LLC
Broker Online Exchange, LLC Incite Energy LLC Telco Pros Inc. Town Square Energy, LLCCapital Energy, Inc. Infinity Power Partners, LLC TFS Energy Solutions, LLC TransCanada Power Marketing Ltd.Charity+Power, Inc. Intelligen Resources LP Titan Energy-New England Inc Viridian Energy, LLC
Choice! Energy Services Retail, LP Kevin J. Cobb & Associates, Inc Trianglenergy L.L.C. XOOM Energy New Hampshire, LLCChoose Energy, Inc. KWH Savings, LLC Trusted Energy LLC
C.N. Brown, LLC L5E, LLC Ultimate Energy Advisors, LLCComm. & Ind. Energy Solutions, LLC Lakes Region Planning Commission UMG, Inc.
Competitive Energy Services, LLC The Legacy Energy Group, LLC Unified Energy Services, LLCConsumer Energy Solutions, Inc. Legend Energy Advisors, LLC US Grid Energy, LLC
Convenient Venture, LLC Maryland Energy Advisors, LLC Usource, L.L.C.CASA-North American Energy Advisory MSI Utilities, Inc. Utility Choice Savings, LLC
Definitive Energy Group, Inc. Nashua Regional Planning Commission Utiliz LLCDemco Energy LLC National Utility Service, Inc. Vervantis, Inc.
Devaney Energy, Inc. Navigate Power LLC Yolon Energy, LLC
10
http://www.puc.nh.gov/ceps/shop.aspx
11
§PUC webpage provides electric customers with one location to easily compare the products and prices offered by competitive energy suppliers
This is an example of what anEversource small C&I customer might see on PUC webpage
Note various terms and types of energy provided
While Up Recently, Wholesale Energy Market Costs are Down over Decade
12
§Move to natural gas as the primary fuel source resulted in lower energy costs
§Average value of the market and wholesale price of energy were cut in half
§Over past two years capacity market costs have increased as a result of recent generator retirements but will decrease over next few years 0.0
2.0
4.0
6.0
8.0
10.0
12.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Avg. Annual Price ($B)Energy Capacity
Linear (Energy) Linear (Capacity)
Transmission Rates (RNS) Have Increased
0
20
40
60
80
100
120
140
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
$kW
-yr
13
Natural Gas Plays Major Role in Regional Energy Portfolio and Cost
14
Natural Gas, 49%
Nuclear30%
Renewables, 10%
Hydro, 8%
Coal, 1% Oil, 1%
Energy Production 2018
Wholesale Electricity Prices Track Natural Gas
Carbon Emission Goals of Our Neighbors
15
ME
NH
VT
MA
CT RI
MaineLong-term reduction sufficient to eliminate any dangerous threat to climate. Reduction to 75-80% below 2003 levels may be required
Massachusetts80% below 1990 by 2050
Rhode Island80% below 1990 by 2050
Connecticut80% below 2001 by 2040
Vermont80-95% below 1990 by 2050
Long-Term Contracting Being Used to Effectuate Environmental Policy
16
§Massachusetts contract for Hydro§Massachusetts and Rhode Island contracts for off shore wind§Connecticut contract with Millstone
§3 State RFP
Renewables More Prevalent Than Ever
§Renewables as a percentage of regional generation and energy produced have increased
§ Intermittent nature of renewables requires back-up
7818 7539 7331 76867261
79918752
93589747 9735
10353
6.0% 6.0% 6.1% 6.1% 6.0%
6.8%
7.8%
8.6%9.0%
9.2%
10.1%
-2%
0%
2%
4%
6%
8%
10%
0
2000
4000
6000
8000
10000
12000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GWH of Renewables and Renewables % of Regional Generation
www.iso-ne.com/isoexpress/web/reports/load-and-demand/-/tree/net-ener-peak-load 17
Costs Likely to Increase in Long Term
18
Fast-start resources needed to maintain reliability
Out-of-Market contracts may ultimately eliminate competitive market
More transmission needed
Shift in Regional Conversations
19
§Regional discussion changed from:
Advancing policies that will provide electricity at the lowest possible price in the long term, consistent with maintaining reliable service and environmental quality
§ Regional discussion changed to:
How do we accommodate state public policies?
How We Got Here:
20
Pre-Restructuring
Late 90’s –Late 2000’s
2010 to Present
§ Utility Owned Generation
§ PURPA Long-Term Obligations
§ Captive Ratepayers responsible for stranded costs
§ States responsible for resource adequacy
§ High Electricity Rates
How We Got Here
21
Pre-Restructuring
Late 90’s –Late 2000’s
2010 to Present
§ Utility Divestiture
§ Competition and Choice
§ Build Out of Gas Fired Generation and Retirement of Old and Dirty Units
§ Least-Cost Dispatch
§ Transmission Investment
§ High Electricity Rates
§ Utility Owned Generation
§ PURPA Long-Term Obligations
§ Captive Ratepayers responsible for utility investments causing stranded costs
§ High Electricity Rates
How We Got Here
22
Pre-Restructuring
Late 90’s –Late 2000’s
2010 to Present
§ Utility Owned Generation
§ PURPA Long-Term Obligations
§ Captive Ratepayers responsible for utility investments causing stranded costs
§ High Electricity Rates
§ Utility Divestiture
§ Competition and Choice
§ Build Out of Gas Fired Generation and Retirement of Old and Dirty Units
§ Least-Cost Dispatch
§ Transmission Investment
§ High Electricity Rates
§ Reliance on Natural Gas and Gas Constraints
§ Baseload generators identified as being at risk of retirement
§ Strong Growth in Intermittent Renewables
§ State Renewable Procurement Contracts
Where Are We Going?
23
Pre-Restructuring Future
§ Utility Owned Generation
§ PURPA Long-Term Obligations
§ Captive Ratepayers responsible for stranded costs
§ States responsible for resource adequacy
§ High Electricity Rates
§ State Renewable Procurement Contracts
§ Captive Ratepayers responsible for stranded costs
§ States responsible for resource adequacy?
§ Fast-start resources needed to maintain reliability
§ More transmission
§ Higher Electricity Rates
Back to the Future?
24
§If we get into the DeLoreanand set our destination for 2050 … §Will we have the competitive
markets of 2019?§Or will we effectively go back
to the regulations of 1996?