Grid operator’s faux neutrality and endorsement of natural gas threatens our future“Our mission is to achieve reliability through wholesale markets and we’re technology neutral,” said Gordon van Welie, CEO of ISO New England. “So ultimately, as long as the resources are providing us the reliability services that we need, we don’t care where the energy is coming from, “And that’s by the design. “In the context of being market neutral we’re
Published on November 19, 2017
By Steve Ahlquist
“Our mission is to achieve reliability through wholesale markets and we’re technology neutral,” said Gordon van Welie, CEO of ISO New England. “So ultimately, as long as the resources are providing us the reliability services that we need, we don’t care where the energy is coming from,
“And that’s by the design.
“In the context of being market neutral we’re also independent of all market participants. We set up as a not-for-profit, and we’re not allowed to have any financial interest in any entity that operates in the market.”
van Welie was speaking to an invite only group of energy producers, lobbyists, politicians and government board members in Cranston Friday morning. The media was limited to the Providence Journal, Rhode Island Public Radio and the Associated Press. This report is based on an audio recording from inside the event.
The brunch was sponsored by the New England Coalition for Affordable Energy and Rhode Islanders for Affordable Energy, two lobbying/astroturfing groups funded by The American Petroleum Institute and Invenergy respectively, as well as many other fossil fuel companies and big energy consumers. Invenergy is the company currently applying to build a $1 billion fracked gas and diesel oil burning power plant amid the pristine forests of northwest Rhode island.
ISO (Independent System Operator) New England is “regulated by the F.E.R.C.,” explained van Welie, saying each letter in FERC (Federal Energy Regulatory Commission). “They approve the rules by which we operate the system and by which we operate the wholesale markets.”
van Welie explained that, “There are three functions that we perform. The first is Grid Operation. Think of Grid Operation as air traffic control. So you’re at T.F. Green, there’s a control tower and they don’t own the runways or the planes or any of the buildings, but their job is to make sure that the planes take off and land safely. And that’s really the Grid Operation function.
“The next is Market Administration. So you can think of that a little bit like a stock exchange for electricity where people can buy and sell and trade both on a forward basis and also a real time basis or day-to-day basis. So we administer all of that and ultimately do all the settlements and the billing and make sure that the money gets to the right places.
“The last function is Power System Planning and it’s really, specifically planning the transmission system. We don’t plan the resources. We’re not the ones who decide what resources connect to the transmission system, but we do have a responsibility for making sure the transmission system is reliable, because it’s really the network that enables the wholesale market.”
van Welie’s particiaption in the Cranston brunch raised eyebrows among those who watch the fossil fuel industry for signs of influence peddling. One industry insider told me that van Welie’s participation was “outrageous.” Dave Anderson, the policy and communications manager for the Energy and Policy Institute wrote that as “CEO of ISO New England, van Welie is subject to a Code of Conduct and ‘must act with impartiality toward all Market Participants…,’ which includes Invenergy.”
van Welie talked about the importance of technical neutrality, saying the ISO doesn’t care how the energy they purchase is produced, but others have noted van Welie’s tacit and outspoken preference for natural gas.
For instance, Kathryn R Eiseman at CommonWealth writes, “When I participated in a small-group, sit-down meeting in late 2014 with Gordon van Welie, the ISO’s CEO, a disconnect was palpable – between how we envision a sustainable power system, and the vision held by the ISO’s leadership. Van Welie did not dispute the impacts of climate change, but told us that he expects things to get very ugly in that regard before business as usual changes. His team touted the ISO’s integration of demand-side resources and renewables into their forecasting, but cast our energy challenges as essentially insurmountable without a major buildout of natural gas infrastructure. Van Welie admitted that he had his ‘finger on the scale’ in favor of additional gas pipelines in the region. Public records requests filed by the Conservation Law Foundation (CLF) earlier that year unearthed meeting notes showing that van Welie had gone further, telling state and federal regulators that ‘what you need to do is overbuild’ the pipeline.”
As van Welie pushes for more gas pipelines, which in turn attracts more gas infrastructure to New England in what seem like a vicious, anti-environmental cycle, in Cranston he touted the inevitability of gas. “Gas probably will live with us a long time,” said van Welie. “We’ve built more gas [generation facilities] we’ve committed more gas [to supply contracts and] capacity markets have attracted more than 3000 megawatts of new gas investments in the last several cycles.”
It’s tempting to take van Welie at his word about gas. After all, his job is to run markets that successfully predict energy prices and sources three years in advance. Then again, van Welie told the audience in Cranston this story about his ability to predict the future:
“If you had asked me ten years ago whether it made sense to install solar panels in a place like New England I probably would have said, ‘no.’” van Welie said with a chuckle.
“I don’t really regard us as having a particularly sunny climate, but states have made a very aggressive investment in this space so we see over 2000 megawatts in the system. We can see the impact on a sunny day in terms of the load profile across New England. It’s pretty dramatic to see…”
Getting ahead of climate change is not a task for those whose imaginations work on decades long timelines. And it won’t be done by those hobnobbing with the fossil fuel industry at exclusive, media restricted events. ISO New England’s faux neutrality, outright endorsement of fossil fuels and flirtations with fossil fuel lobbyists under the leadership of Gordon van Welie puts New England’s energy and environmental future at risk.
Here’s the first 45 minutes of van Welie’s talk, audio only:
van Welie also had this to say about the future of the grid, but it didn’t quite fit in with the above:
“There’s a hybrid grid emerging. I think about the word hybrid in two dimensions the one is grid scale resource connected to the transmission system and distributed resources that are essentially connected behind the meter at the distribution end. So hybrid in that sense. It used to be that bulk of the electricity was going to be produced by large, central station generation. That’s no longer the case. Were on a trend moving towards a mix of central and distributed. I’d say we’re at 90/10 [percent] at the moment, rapidly trending towards 80/20 [percent], and a decade from now it may very well be 70/30 or more than that.
“We’re going to be stuck needing grid-scale energy production for the most part, for the next several decades and its going to come from natural gas fired combined cycles and then over time you’ll gradually see a shift towards grid scale renewable energy. But that’s a slow transition, it’s a several decade transition.”
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