All across the United States stressed bulk transmission systems are threatening the reliability of the nation's electric power system. In some parts of the country reliability in heavy demand centers is adversely affected by an inadequate amount of locally produced electricity coupled with a bulk transmission system that is ill equipped to bring in surplus power from other regions. Even though there is widespread recognition of the seriousness of this issue, investment has been non-existent and local opposition in state siting processes has set tremendous hurdles.
Here in New England, where it might be expected to be especially difficult to build new transmission lines given our population density, environmental regulations and public emphasis on environmental protection, we're actually getting things done. Five major projects as well as a host of smaller ones scattered throughout the region, have been approved and one major effort underway. The total projected transmission investment has surpassed $1.5 billion.
It hasn't been easy. Political and community opposition, as well as uncertainty concerning financing, has put critical transmission projects in limbo for quite some time. Rather than continue to fight unwinnable battles, utilities did what they could to patch the system, but accomplishing large-scale upgrades had become nearly impossible.
To mitigate this problem, ISO New England and the New England stakeholders developed a winning formula that brought major projects out of hibernation and identified critical needs giving transmission owners and regulators a road map to improve the system. We believe this approach can act as a model for other areas of the country where needed transmission improvements are lagging. Our approach relies on the following critical elements:
• A planning process that is regional and independent
• Active stakeholder participation throughout the planning and siting process;
• A cost allocation process that brings clarity and certainty to those who pay for needed projects.
This article will explore the progress New England has made in each of these areas and the challenges that lie ahead with particular emphasis on the importance of a regional (and inter-regional) planning process to identify needed investment and the need to speed the siting of critical transmission facilities.
Inaction Left System Vulnerable
At the start of the deregulated power markets, the historical lack of transmission investment left the power system ill equipped to move power around New England efficiently. Three key areas with rapidly growing economies - Southwest Connecticut, Northwest Vermont, and Greater Boston - faced an energy future much like California's recent past, including tight supply, constrained transmission and the potential for shortages.
The newly deregulated wholesale markets resulted in more than $6 billion of investment in new power plants, but investment in new transmission lagged far behind. The addition of a more than a dozen new power plants increased supply by more than 30 percent; however, many of these new plants were located outside areas of high electricity demand. Transmission investment continued to lag behind, leaving the existing system overtaxed. This mismatch of increased production and limited transmission led to bottlenecks, where surplus electricity was stranded in low demand areas such as Maine and Rhode Island. As a result, system operators have been forced to call on older, more expensive generators located close to demand centers to run "out of merit" and led to Reliability Must Run (RMR) agreements to keep older plants operating past their normal retirement age. Right now in New England, 17 percent of our peak power is produced by generating plants on RMR's. All totaled, these inefficiencies add more than $350 million annually to the cost of power in the region.
Clearly something had to be done to ensure that needed transmission projects progressed. Without new transmission lines, sooner or later the peak demand of a hot summer day or a cold winter night would trigger a breakdown - disrupting the economy, endangering public safety and driving residents and businesses from the region in search of reliable power.
A Regional and Independent Planning Process
In 2000, the Federal Energy Regulatory Commission (FERC) gave ISO New England the authority for long-term planning and we developed an annual, comprehensive planning process to assess and identify transmission system needs. The first Regional Transmission Expansion Plan (RTEP) was published in 2001 and identified more than $1 billion in needed investment. Today's planning document is now called the Regional System Plan (RSP) and is slated to be issued later on this year.
In the years prior to the initiation of RTEP, no appreciable transmission projects were on the books. Since 2002, we have made significant progress toward upgrading the system: seventy-five projects have been completed. Our most recent plan, published last fall, identified nearly 250 regulated transmission projects needed throughout New England at a total estimated cost ranging from $1.5 billion to $3 billion over the next ten years. We have demonstrated that timely completion of these transmission projects is critical to preserving and improving reliability region-wide and is key to solving reliability problems in the region's load pockets.
The most important of these projects are five 345kV lines located across the region that will greatly improve the efficient transmittal of electricity: Greater Boston, Southwest Connecticut, Northwest Vermont and an interconnection between New England's bulk power grid and New Brunswick. These projects have all been approved by state siting councils and will be brought into service between 2006 and 2009. A sixth project, which would create an important link between Southeast Massachusetts, where there is surplus power, and Connecticut, is in the early planning stages.
The key element in moving these forward is our active role in the process beyond planning. We not only identify system needs, but we conduct in depth technical studies, testify at state siting hearings, and determine whether costs can be regionalized.
By working with utilities, state and local governmental bodies, as well as engaging the
public discourse through press releases, media interviews and letters to the local newspapers, a greater understanding of the region's power system needs has resulted in significant upgrades to New England's transmission system in the most critical areas. Five major transmission lines receiving local siting approval from four separate states-in less than two years is proof positive that our formula works.
How does the process work? The RSP is a comprehensive assessment made up of numerous studies and analyses of the region's bulk electric power system that identifies the location and nature of projected system needs. ISO New England also identifies system problems by conducting technical transmission planning studies with input and analytical assistance from the transmission owners. The system plan is updated annually to reflect both market responses and changes in system or market conditions. Load growth, resource additions and retirements, timing of transmission upgrades, new technologies, and regulatory developments are all examples that have a potential to impact system performance.
In the planning process, ISO New England uses a power system model that includes all generators, transmission facilities, and loads. Simulations address physical issues such as thermal loading, minimum voltage, voltage regulation, transient stability, dynamic oscillations, harmonics and short circuit interrupting capability.
Transparency and feedback are an important part of the planning process. ISO New England conducts and directs studies with input and review from the Planning Advisory Committee (PAC). The PAC is open to any interested party and is composed of a wide variety of regional stakeholders, including market participants, governmental representatives, state agencies, representatives of local communities and consultants. The PAC meets regularly throughout the year. ISO New England posts the meeting minutes and presentations on its Web site. Seven meetings were held throughout New England during the 2004 process. We also solicit input via a public meeting conducted each year by the ISO New England Board of Directors before approval of the annual plan.
Assistance to Localities in Siting Proceedings
ISO New England's approach to local siting proceedings has been critical to attaining site approvals. Our input provides neutral, unbiased expert testimony on the regional bulk power system needs. Because our bottom line is reliability of the power grid, our testimony at state siting hearings has clout-and has moved contentious discussions past the rhetoric and into productivity. In Connecticut, for example, the need for new transmission infrastructure has been apparent for years, but local opposition made it nearly impossible for utilities to move ahead with major projects. Our work in Connecticut provides a good case study for the importance of an active role by an impartial entity.
Although Southwest Connecticut's transmission system has long been recognized as woefully insufficient, the area has become a major financial center supporting the nation's international financial community. Nevertheless, Connecticut had not made much progress in siting new transmission upgrades to correspond to Southwest Connecticut’s growing economic presence. Northeast Utilities (The Connecticut Light & Power Company) and The United Illuminating Company proposed to upgrade the system with a 345kV "loop" that ran from Bethel to Norwalk and Norwalk to Middletown in Southwest Connecticut making it easier to transport power from other parts of New England to that part of the state. The project was deemed essential to maintain reliability not only in Southwest Connecticut, but also throughout the region.
ISO New England engaged in a comprehensive public information campaign to emphasize the importance of these proposals. In addition, we acted as an expert witness during Siting Council proceedings and commissioned studies demonstrating the necessity of the project and the consequences of inaction.
The project was opposed by members of the Connecticut Legislature, which passed legislation placing a moratorium on any upgrades, and the Attorney General, who initially said it was too costly and unnecessary.
ISO New England provided supportive, expert testimony before the siting council and provided factual information to the state legislature about the need for new transmission facilities. Over a three-to-four-year period, debate over the necessity for this project shifted to how much of it could be placed underground, as a result of a legislative change that occurred in the middle of the siting process.
After ISO New England warned the Council that placing large portions of the line
underground would threaten the reliability of the new line, we participated in a special study group, hired independent consultants and international experts and filed reports with the Council that led to a resolution on the issue.
While this process continued, ISO New England initiated short-term fixes for emergency demand periods by contracting for temporary generators to be placed in Southwest Connecticut in case of failures on the system. In addition, we aggressively marketed our demand response programs to alleviate stress on the system by decreasing demand. These programs compensated large-scale users for not using electricity during peak periods. More than 500MW of power is currently participating in these programs.
Taking a lead role as an independent arbiter between the utilities and the political and
regulatory system was essential in moving this project to a fruitful conclusion. Working with
siting Councils throughout the region, ISO New England is able to provide engineering
information about the projects, factual details about requirements, an evaluation of alternative solutions, and public discussion about what will and will not work.
Cost Allocation Process
Equally important is the cost allocation process that provides for sharing costs on a pro rata basis among the six New England states. If the project provides benefits to the bulk power system, the region shares in the cost; if the benefits are largely local, the costs stay local. This process brings cost certainty to the industry. This transparent and participatory process to determine and allocate costs has been instrumental in moving projects from the planning stage to final approval and, ultimately, to construction.
Major Projects Identified, Planned, Approved
The RTEP planning process has made explicit and specific the ways in which the mismatch of resources, demand and geography result in reliability problems in the heaviest demand centers in New England. The following projects planned for the most critical areas will help to mitigate cost increases as well as increase reliability over the next several years.
Southwest Connecticut Reliability Project: The Southwest Connecticut Reliability Project will provide adequate import capability to meet load and reserve requirements and will accommodate generation expansion plans consisting of repowering of existing units, as well as construction of new units, within the area beginning in 2008. This project includes a number of system reinforcements and a 345 kV loop between Bethel and Norwalk and Norwalk and Middletown to connect Southwest Connecticut to surplus power in other parts of New England. The project has been proposed in two phases:
Phase I: In July 2003, the Connecticut Siting Council approved a combination overhead/underground upgrade for the 20-mile Phase I Project from Bethel to Norwalk. Construction has begun and the line is expected to be put into service in 2006.
Phase II: This 69-mile project includes a combination overhead/underground 345kV line from Norwalk to Middletown and completes the "loop" to reinforce the transmission system in Southwest Connecticut. The Siting Council gave final approval to the project in April. Cost allocation and permitting processes continue.
Northwest Vermont Reliability Project: This region has outgrown its ability to meet its own power demands over the existing transmission system. The project includes a new 345 kV line along with improvements to equipment and stronger ties to New York and Canada. State approval came in early 2005. The project is expected to be placed into service by 2007.
NSTAR 345 kV Transmission Reliability Project: ISO New England reliability studies identified the critical need to improve the reliability of the bulk electric power system in the Boston area. The construction of a 345 kV station and three new 345 kV lines south of Boston will allow for surplus power in Southeastern Massachusetts and Rhode Island to be brought into Greater Boston. The $217
million project will reduce the need to shed up to 400 MW of load for line outage contingencies. Two of the new lines are expected to be operational by the summer of 2006, the remaining one in 2007.
Northeast Reliability Interconnect Project: This project consists of a 345kV transmission line connecting a substation in New Brunswick to a substation in Northern Maine. This tie will improve the flow of electricity from Canada through Maine and into high demand areas throughout New England. Access to relatively lower cost generation in New Brunswick is estimated to result in approximately $9 million in annual savings in addition to reliability benefits. Current plans are for completion by 2007.
Southern New England Transmission Reinforcement Project: The final major project currently in the planning phase is intended to build a strong tie across southern New England to improve conditions in Connecticut and Western Massachusetts. A major portion of the New England demand is in Southern New England - near the coastline. The project's purpose is to move power to and from Southeastern Massachusetts into Connecticut. This will help service the growing demand in Southwest Connecticut and alleviate pressure in Western Massachusetts. The project is estimated to be in service by 2011. It will provide 800-1000 MW of improved east-west transfer capability.
Further Challenges in New England
Even with these planned transmission upgrades, additional resources or re-powering of existing resources will be needed within areas of high demand to offset potential retirements and meet growing demand. The particular unit characteristics that are needed in New England are flexible/quick start type capacity that responds to changing system conditions and contingencies - providing 10 and 30-minute reserves.
New England has come to the end of its building boom for new power supply sources. Moreover, some existing generating units needed for system reliability are in jeopardy. There is a potential for over 1,600 megawatts of generator deactivations or retirements. Several of these
generating units are located in heavy demand centers.
Five major factors contribute to the risks to reliability:
• Continued growth in electricity use;
• Proposed generating unit retirements;
• Continued transmission bottlenecks;
• Inadequate development of new resources, i.e. new or re-powered generation and demand response programs;
• Heavy reliance on natural gas-fired generators that are subject to interruptions of fuel supply, which poses potential reliability issues for winter peak load periods.
Both short-term and long-term steps are essential to meet the challenges we face in New England. ISO New England has already applied "Band-Aids" to minimize risks of power outages. These include implementing agreements to keep older power plants (less efficient and less environmentally friendly) operating, securing emergency generation sources for peak periods, and encouraging conservation through demand response programs.
Long-term solutions require further investment in both new transmission and generation to meet future demand. ISO New England has again taken the lead proposing several market-based solutions to encourage investment in these needed resources. We are working to ensure that investment in
transmission and generation goes hand in hand - with neither lagging behind.
Transmission System Progress via Inter-Regional and Inter-Industry Planning
We believe that successful transmission investment also depends on the recognition that planning activities must be coordinated on an inter-regional basis to ensure the long-term reliability of the nation's system. ISO New England has established close communications and a healthy information exchange with neighboring ISOs and their stakeholders.
Inter-industry cooperation is equally
important. New England has become heavily reliant on natural gas to produce electricity. During the "cold-snap" of January 2004, many generators in New England could not run their plants because of the heavy demand for natural gas to heat homes. Immediately after this crisis, we established task forces that led to a closer working relationship with the gas industry. Task force recommendations resulted in 2,000 megawatts of additional power being available during peak periods this past winter.
Conclusion
Finally, encouraging transmission investment is all about improving reliability. We believe that our three-pronged approach helps us to get transmission built and maintain good relationships within the region as a whole and to continue to move forward working with industry, government and the public.
New England has demonstrated that an ISO can make real change through new investment in transmission that makes the grid more efficient, thus moving cheaper generation to market. We will continue to remain active in identifying problems and moving solutions forward to improve the electric power system in New England. n
Here in New England, where it might be expected to be especially difficult to build new transmission lines given our population density, environmental regulations and public emphasis on environmental protection, we're actually getting things done. Five major projects as well as a host of smaller ones scattered throughout the region, have been approved and one major effort underway. The total projected transmission investment has surpassed $1.5 billion.
It hasn't been easy. Political and community opposition, as well as uncertainty concerning financing, has put critical transmission projects in limbo for quite some time. Rather than continue to fight unwinnable battles, utilities did what they could to patch the system, but accomplishing large-scale upgrades had become nearly impossible.
To mitigate this problem, ISO New England and the New England stakeholders developed a winning formula that brought major projects out of hibernation and identified critical needs giving transmission owners and regulators a road map to improve the system. We believe this approach can act as a model for other areas of the country where needed transmission improvements are lagging. Our approach relies on the following critical elements:
• A planning process that is regional and independent
• Active stakeholder participation throughout the planning and siting process;
• A cost allocation process that brings clarity and certainty to those who pay for needed projects.
This article will explore the progress New England has made in each of these areas and the challenges that lie ahead with particular emphasis on the importance of a regional (and inter-regional) planning process to identify needed investment and the need to speed the siting of critical transmission facilities.
Inaction Left System Vulnerable
At the start of the deregulated power markets, the historical lack of transmission investment left the power system ill equipped to move power around New England efficiently. Three key areas with rapidly growing economies - Southwest Connecticut, Northwest Vermont, and Greater Boston - faced an energy future much like California's recent past, including tight supply, constrained transmission and the potential for shortages.
The newly deregulated wholesale markets resulted in more than $6 billion of investment in new power plants, but investment in new transmission lagged far behind. The addition of a more than a dozen new power plants increased supply by more than 30 percent; however, many of these new plants were located outside areas of high electricity demand. Transmission investment continued to lag behind, leaving the existing system overtaxed. This mismatch of increased production and limited transmission led to bottlenecks, where surplus electricity was stranded in low demand areas such as Maine and Rhode Island. As a result, system operators have been forced to call on older, more expensive generators located close to demand centers to run "out of merit" and led to Reliability Must Run (RMR) agreements to keep older plants operating past their normal retirement age. Right now in New England, 17 percent of our peak power is produced by generating plants on RMR's. All totaled, these inefficiencies add more than $350 million annually to the cost of power in the region.
Clearly something had to be done to ensure that needed transmission projects progressed. Without new transmission lines, sooner or later the peak demand of a hot summer day or a cold winter night would trigger a breakdown - disrupting the economy, endangering public safety and driving residents and businesses from the region in search of reliable power.
A Regional and Independent Planning Process
In 2000, the Federal Energy Regulatory Commission (FERC) gave ISO New England the authority for long-term planning and we developed an annual, comprehensive planning process to assess and identify transmission system needs. The first Regional Transmission Expansion Plan (RTEP) was published in 2001 and identified more than $1 billion in needed investment. Today's planning document is now called the Regional System Plan (RSP) and is slated to be issued later on this year.
In the years prior to the initiation of RTEP, no appreciable transmission projects were on the books. Since 2002, we have made significant progress toward upgrading the system: seventy-five projects have been completed. Our most recent plan, published last fall, identified nearly 250 regulated transmission projects needed throughout New England at a total estimated cost ranging from $1.5 billion to $3 billion over the next ten years. We have demonstrated that timely completion of these transmission projects is critical to preserving and improving reliability region-wide and is key to solving reliability problems in the region's load pockets.
The most important of these projects are five 345kV lines located across the region that will greatly improve the efficient transmittal of electricity: Greater Boston, Southwest Connecticut, Northwest Vermont and an interconnection between New England's bulk power grid and New Brunswick. These projects have all been approved by state siting councils and will be brought into service between 2006 and 2009. A sixth project, which would create an important link between Southeast Massachusetts, where there is surplus power, and Connecticut, is in the early planning stages.
The key element in moving these forward is our active role in the process beyond planning. We not only identify system needs, but we conduct in depth technical studies, testify at state siting hearings, and determine whether costs can be regionalized.
By working with utilities, state and local governmental bodies, as well as engaging the
public discourse through press releases, media interviews and letters to the local newspapers, a greater understanding of the region's power system needs has resulted in significant upgrades to New England's transmission system in the most critical areas. Five major transmission lines receiving local siting approval from four separate states-in less than two years is proof positive that our formula works.
How does the process work? The RSP is a comprehensive assessment made up of numerous studies and analyses of the region's bulk electric power system that identifies the location and nature of projected system needs. ISO New England also identifies system problems by conducting technical transmission planning studies with input and analytical assistance from the transmission owners. The system plan is updated annually to reflect both market responses and changes in system or market conditions. Load growth, resource additions and retirements, timing of transmission upgrades, new technologies, and regulatory developments are all examples that have a potential to impact system performance.
In the planning process, ISO New England uses a power system model that includes all generators, transmission facilities, and loads. Simulations address physical issues such as thermal loading, minimum voltage, voltage regulation, transient stability, dynamic oscillations, harmonics and short circuit interrupting capability.
Transparency and feedback are an important part of the planning process. ISO New England conducts and directs studies with input and review from the Planning Advisory Committee (PAC). The PAC is open to any interested party and is composed of a wide variety of regional stakeholders, including market participants, governmental representatives, state agencies, representatives of local communities and consultants. The PAC meets regularly throughout the year. ISO New England posts the meeting minutes and presentations on its Web site. Seven meetings were held throughout New England during the 2004 process. We also solicit input via a public meeting conducted each year by the ISO New England Board of Directors before approval of the annual plan.
Assistance to Localities in Siting Proceedings
ISO New England's approach to local siting proceedings has been critical to attaining site approvals. Our input provides neutral, unbiased expert testimony on the regional bulk power system needs. Because our bottom line is reliability of the power grid, our testimony at state siting hearings has clout-and has moved contentious discussions past the rhetoric and into productivity. In Connecticut, for example, the need for new transmission infrastructure has been apparent for years, but local opposition made it nearly impossible for utilities to move ahead with major projects. Our work in Connecticut provides a good case study for the importance of an active role by an impartial entity.
Although Southwest Connecticut's transmission system has long been recognized as woefully insufficient, the area has become a major financial center supporting the nation's international financial community. Nevertheless, Connecticut had not made much progress in siting new transmission upgrades to correspond to Southwest Connecticut’s growing economic presence. Northeast Utilities (The Connecticut Light & Power Company) and The United Illuminating Company proposed to upgrade the system with a 345kV "loop" that ran from Bethel to Norwalk and Norwalk to Middletown in Southwest Connecticut making it easier to transport power from other parts of New England to that part of the state. The project was deemed essential to maintain reliability not only in Southwest Connecticut, but also throughout the region.
ISO New England engaged in a comprehensive public information campaign to emphasize the importance of these proposals. In addition, we acted as an expert witness during Siting Council proceedings and commissioned studies demonstrating the necessity of the project and the consequences of inaction.
The project was opposed by members of the Connecticut Legislature, which passed legislation placing a moratorium on any upgrades, and the Attorney General, who initially said it was too costly and unnecessary.
ISO New England provided supportive, expert testimony before the siting council and provided factual information to the state legislature about the need for new transmission facilities. Over a three-to-four-year period, debate over the necessity for this project shifted to how much of it could be placed underground, as a result of a legislative change that occurred in the middle of the siting process.
After ISO New England warned the Council that placing large portions of the line
underground would threaten the reliability of the new line, we participated in a special study group, hired independent consultants and international experts and filed reports with the Council that led to a resolution on the issue.
While this process continued, ISO New England initiated short-term fixes for emergency demand periods by contracting for temporary generators to be placed in Southwest Connecticut in case of failures on the system. In addition, we aggressively marketed our demand response programs to alleviate stress on the system by decreasing demand. These programs compensated large-scale users for not using electricity during peak periods. More than 500MW of power is currently participating in these programs.
Taking a lead role as an independent arbiter between the utilities and the political and
regulatory system was essential in moving this project to a fruitful conclusion. Working with
siting Councils throughout the region, ISO New England is able to provide engineering
information about the projects, factual details about requirements, an evaluation of alternative solutions, and public discussion about what will and will not work.
Cost Allocation Process
Equally important is the cost allocation process that provides for sharing costs on a pro rata basis among the six New England states. If the project provides benefits to the bulk power system, the region shares in the cost; if the benefits are largely local, the costs stay local. This process brings cost certainty to the industry. This transparent and participatory process to determine and allocate costs has been instrumental in moving projects from the planning stage to final approval and, ultimately, to construction.
Major Projects Identified, Planned, Approved
The RTEP planning process has made explicit and specific the ways in which the mismatch of resources, demand and geography result in reliability problems in the heaviest demand centers in New England. The following projects planned for the most critical areas will help to mitigate cost increases as well as increase reliability over the next several years.
Southwest Connecticut Reliability Project: The Southwest Connecticut Reliability Project will provide adequate import capability to meet load and reserve requirements and will accommodate generation expansion plans consisting of repowering of existing units, as well as construction of new units, within the area beginning in 2008. This project includes a number of system reinforcements and a 345 kV loop between Bethel and Norwalk and Norwalk and Middletown to connect Southwest Connecticut to surplus power in other parts of New England. The project has been proposed in two phases:
Phase I: In July 2003, the Connecticut Siting Council approved a combination overhead/underground upgrade for the 20-mile Phase I Project from Bethel to Norwalk. Construction has begun and the line is expected to be put into service in 2006.
Phase II: This 69-mile project includes a combination overhead/underground 345kV line from Norwalk to Middletown and completes the "loop" to reinforce the transmission system in Southwest Connecticut. The Siting Council gave final approval to the project in April. Cost allocation and permitting processes continue.
Northwest Vermont Reliability Project: This region has outgrown its ability to meet its own power demands over the existing transmission system. The project includes a new 345 kV line along with improvements to equipment and stronger ties to New York and Canada. State approval came in early 2005. The project is expected to be placed into service by 2007.
NSTAR 345 kV Transmission Reliability Project: ISO New England reliability studies identified the critical need to improve the reliability of the bulk electric power system in the Boston area. The construction of a 345 kV station and three new 345 kV lines south of Boston will allow for surplus power in Southeastern Massachusetts and Rhode Island to be brought into Greater Boston. The $217
million project will reduce the need to shed up to 400 MW of load for line outage contingencies. Two of the new lines are expected to be operational by the summer of 2006, the remaining one in 2007.
Northeast Reliability Interconnect Project: This project consists of a 345kV transmission line connecting a substation in New Brunswick to a substation in Northern Maine. This tie will improve the flow of electricity from Canada through Maine and into high demand areas throughout New England. Access to relatively lower cost generation in New Brunswick is estimated to result in approximately $9 million in annual savings in addition to reliability benefits. Current plans are for completion by 2007.
Southern New England Transmission Reinforcement Project: The final major project currently in the planning phase is intended to build a strong tie across southern New England to improve conditions in Connecticut and Western Massachusetts. A major portion of the New England demand is in Southern New England - near the coastline. The project's purpose is to move power to and from Southeastern Massachusetts into Connecticut. This will help service the growing demand in Southwest Connecticut and alleviate pressure in Western Massachusetts. The project is estimated to be in service by 2011. It will provide 800-1000 MW of improved east-west transfer capability.
Further Challenges in New England
Even with these planned transmission upgrades, additional resources or re-powering of existing resources will be needed within areas of high demand to offset potential retirements and meet growing demand. The particular unit characteristics that are needed in New England are flexible/quick start type capacity that responds to changing system conditions and contingencies - providing 10 and 30-minute reserves.
New England has come to the end of its building boom for new power supply sources. Moreover, some existing generating units needed for system reliability are in jeopardy. There is a potential for over 1,600 megawatts of generator deactivations or retirements. Several of these
generating units are located in heavy demand centers.
Five major factors contribute to the risks to reliability:
• Continued growth in electricity use;
• Proposed generating unit retirements;
• Continued transmission bottlenecks;
• Inadequate development of new resources, i.e. new or re-powered generation and demand response programs;
• Heavy reliance on natural gas-fired generators that are subject to interruptions of fuel supply, which poses potential reliability issues for winter peak load periods.
Both short-term and long-term steps are essential to meet the challenges we face in New England. ISO New England has already applied "Band-Aids" to minimize risks of power outages. These include implementing agreements to keep older power plants (less efficient and less environmentally friendly) operating, securing emergency generation sources for peak periods, and encouraging conservation through demand response programs.
Long-term solutions require further investment in both new transmission and generation to meet future demand. ISO New England has again taken the lead proposing several market-based solutions to encourage investment in these needed resources. We are working to ensure that investment in
transmission and generation goes hand in hand - with neither lagging behind.
Transmission System Progress via Inter-Regional and Inter-Industry Planning
We believe that successful transmission investment also depends on the recognition that planning activities must be coordinated on an inter-regional basis to ensure the long-term reliability of the nation's system. ISO New England has established close communications and a healthy information exchange with neighboring ISOs and their stakeholders.
Inter-industry cooperation is equally
important. New England has become heavily reliant on natural gas to produce electricity. During the "cold-snap" of January 2004, many generators in New England could not run their plants because of the heavy demand for natural gas to heat homes. Immediately after this crisis, we established task forces that led to a closer working relationship with the gas industry. Task force recommendations resulted in 2,000 megawatts of additional power being available during peak periods this past winter.
Conclusion
Finally, encouraging transmission investment is all about improving reliability. We believe that our three-pronged approach helps us to get transmission built and maintain good relationships within the region as a whole and to continue to move forward working with industry, government and the public.
New England has demonstrated that an ISO can make real change through new investment in transmission that makes the grid more efficient, thus moving cheaper generation to market. We will continue to remain active in identifying problems and moving solutions forward to improve the electric power system in New England. n
