Regional Energy Reform

Many of the most effective reforms to the Northeast’s energy system can be made at the state or provincial levels, but there are also opportunities to increase reliability and affordability and reduce greenhouse gas impacts at the regional level. In addition to the RGGI cap and trade program, a recent rulemaking in the regional energy market, ISO-New England and ongoing processes involving regional and cross-border energy planning are important opportunities to institute sustainable energy policies.

Background

ENE is participating in working groups and conducting research to help the region assess options as energy planning processes unfold in the Northeast. As members of an official working group in...
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Regional Energy Reform

ISO-New England: Forward Capacity Market (FCM)

The FCM uses a competitive auction process to ensure New England will have sufficient capacity to meet demand three years in advance.  The FCM rule-making process provided an opportunity to include new provisions that would allow demand resources—such as energy efficiency and distributed generation—to qualify for payments that historically have gone only to power generators. ENE and others advocated for this change, and demand side resources can now compete with supply in the FCM auction.

Demand side resources competed well in the first auction, which took place in February 2008. Of the 1,813 MW of new resources that were selected, 1,188 MW represent new demand-side projects, such as
energy efficiency, demand response, and distributed generation. (See What's New)

The FCM market is expected to grow to $4-5 billion annually, and efficiency and demand side resources could win a good portion of that market based on their cost-effectiveness. ENE projects that the market could provide $400-500k annually in new investments in efficiency.

 

Regional System Planning

Investments in efficiency are a top priority for reducing emissions and costs, but planning for new, cleaner generation is also important. The Northeast faces challenging questions about what sources of energy to invest in and where new generation should be located. Careful assessments of the environmental and economic benefits and drawbacks of technology and coordination among the states and provinces are crucial to developing a sustainable system. As state and regional working groups explore issues such as expanding transmission capacity, ENE and other stakeholders are researching and weighing in on the potential economic and environmental impacts for the region.