Ayotte calls for reforms to regional electric grid

(The Center Square) — New Hampshire Gov. Kelly Ayotte is calling on a regional electric grid operator to implement proposed reforms aimed at reducing the rising cost of electricity in New England.

In a letter to ISO-New England, which operates the regional electric grid, Ayotte called for reforms to the so-called Day-Ahead Ancillary Services Market, where buyers and sellers of energy lock in binding prices for the next day to help protect against price volatility and ensure there is enough power to feed the grid. 

Ayotte pointed to a February report from ISO-New England's internal market monitor that found the new market has cost an estimated $921 million, far exceeding the agency's original estimate of about $140 million. The governor said the data suggests ratepayers are getting fleeced by the financial market, which was launched a year ago. 

"The unprecedented cost increases documented by the IMM are imposing substantial and unanticipated burdens on electricity consumers across New England, including those in New Hampshire, and demand urgent attention to protect ratepayers," Ayotte, a first-term Republican, wrote to the agency's board of directors. "New Hampshire's consumers should not be expected to shoulder unnecessary costs."

Ayotte said the program is "falling short" of a responsibility to ensure that New England's electricity system remains both "reliable and affordable" and said it "must be reformed to better serve the people of our state."

ISO-New England responded to the governor's letter with a statement saying day-ahead ancillary services have improved reliability of the regional grid but have also had an impact on overall costs amid a colder-than-expected winter and rising energy prices. 

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"Specifically, variables like higher consumer demand, higher natural gas prices, a shift in the resource mix, and extended extreme cold have resulted in different outcomes from those initially modeled," ISO-New England said in the statement.

The statement said the agency is considering proposed changes to the market — at least three of which were mentioned in the governor's letter — and expects to submit its proposal to federal regulators by the summer. 

"We also recognize the concerns stakeholders have raised regarding ... costs, particularly in the broader context of overall high energy costs," the agency wrote in a recent memo highlighting the proposed changes. "In light of these concerns, we recommend that the ISO and stakeholders prioritize evaluation and implementation of these recommended adjustments." 

New England has some of the highest energy costs in the nation, which critics have attributed in part to resistance to expanding natural gas pipelines, and clean energy policies embraced by neighboring states like Massachusetts, they say, have driven up costs for consumers. 

“Electric bills are through the roof, and New Hampshire families and businesses shouldn’t bear these unnecessary additional costs," Ayotte said in a separate statement. "New England’s electric system needs to be reliable and affordable, and it must be reformed immediately to lower costs for Granite Staters."