Understanding RTOs: ISO New England
February 21, 2023
Refresher: What is an RTO?
While states set their own clean energy goals and utility policy, wholesale markets and electricity transmission between states are regulated by the Federal Energy Regulatory Commission (FERC). In many cases, this is organized through Regional Transmission Organizations (RTOs). RTOs are responsible for managing the capacity market, which ensures that electricity supply meets future demand with adequate reserves.
What States Are Within ISO New England?
ISO New England is the RTO for Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut.
How is ISO New England Structured?
ISO New England is managed by an independent Board of Directors. Board members are nominated by the ISO New England Board of Directors, the New England Power Pool (NEPOOL), and the New England Conference of Public Utilities Commissioners. Board members are elected to serve three-year terms.
Why Should You Care About ISO New England?
ISO New England is responsible for both the energy and capacity market. Because ISO New England controls the capacity market, their decisions have a huge impact on how state clean energy policy is implemented and the cost of electricity to consumers in the region.
What Have States Done Around ISO New England?
ISO New England currently has a minimum price offer rule (MOPR) that makes it difficult or impossible for renewable energy resources to compete in ISO New England’s capacity market. It hinders states’ ability to transition away from fossil fuel resources, while forcing ratepayers to pay for more expensive generating resources, like methane gas or coal. After a process in which stakeholders overwhelmingly agreed the rule should be eliminated, ISO New England reversed course and insisted on maintaining the MOPR for another two years.
In April, over 90 legislators from all six ISO New England states called on the regional operator to eliminate the rule now, rather than prolonging it for another two years. The continuation of the MOPR increases costs for consumers by preventing low-cost renewable energy from freely competing in the market. It also hinders New England’s climate commitments by unfairly dampening the economic competitiveness of renewables, leading to increased emissions over time.
While ISO New England refused to eliminate the rule immediately, state legislators are committed to working more directly and with more oversight of the grid operator to ensure that state policies are not undermined.