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Federal court rules against part of New England grid operator reliability plan

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Chris Hunkeler
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Flickr Creative Commons

A federal appeals court has thwarted part of a plan to improve the reliability of New England's electric grid during the winter that would pay electricity generators extra for keeping fuel on-site.

As climate change causes more unreliable weather and conflict in Ukraine pinches energy markets, ISO-New England, the organization in charge of keeping the region’s lights on, is planning to provide payments to electricity generators to keep three days worth of fuel on hand.

Their plan, called the Inventoried Energy Program, is meant to improve the reliability of the grid during winter, in particular on some of the coldest days of the year. The program would be used for the winters between 2023 and 2025.

But after federal regulators approved the plan in 2020, a group of petitioners, including the state of New Hampshire, challenged their decision in court.

Challengers said certain kinds of electricity generators – those using coal, nuclear, biomass, and hydropower – already keep three days worth of fuel on site. ISO-New England would be paying those generators an extra $40 million dollars a year for just doing what they already do.

While the federal appeals court agreed with the challengers, saying those generators would not change their behavior in response to subsidies, it also upheld the rest of the Inventoried Energy Program.

Melissa Birchard, director of clean energy and grid reform at the Acadia Center, said the decision was a partial win.

“This decision from the court does at least protect consumers from some wasted expenditures,” she said.

But, Birchard said, what the grid needs is long-term solutions for reliability that move away from fossil fuels, which New England has to import from sometimes-volatile international markets.

Solutions that move towards renewable energy are also important for mitigating climate change, Birchard said.

“We need markets, regional markets that promote the development of clean reliability resources,” she said. “And right now, our markets aren't doing that effectively. And so instead, we keep relying on fossil fuels.”

Energy efficiency, battery storage, and demand response programs – where consumers shift the time of day when they use electricity – can all contribute to reliability, Birchard said.

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