So here we are, watching a new but already obsolete methane gas fueled electric generator being installed to help meet the responsibility of 14 municipal light plants to provide power to meet the peak needs of the electric system. This Project 2015A, the Peabody peaker plant, developed by the Massachusetts Wholesale Electric Company (MMWEC), has no rational basis consistent with public health, environmental concerns, or climate warming. There are better solutions, non polluting, more reliable, and less expensive.
But our regulators have not adapted to the changing technology options and do not recognize the danger of the climate crisis in determining policy. The regulators at the regional and national level claim to use competition on price as a means of regulating and serving the common good. But we know that people and institutions motivated by profit tend to be vulnerable to economic and political influence that can punish innovation and harm the public good. Today, we see policies which protect fossil fuel plants which cause harm, and create unfair challenges for renewable sources of energy and battery storage.
Let's all work together to change the regulations. Otherwise, these regulations will destroy our world.
There are several levels of government that should have intervened with common sense concerns and actions to halt and review the plans for the peaker plant to safeguard the health and well-being of people and the planet—municipal, state, regional, and federal.
Those of us who are concerned with the future well-being of our children, grandchildren, and the natural world on which all life depends are seeking a rapid transition to all-renewable energy. We wonder how we’re going to get there in time so that we can preserve our health and our local wetlands and mitigate the most drastic impacts of climate change. Today, as I write, most of the electricity in our region comes from burning gas, oil, other organic matter, or from nuclear; while only 13.4% comes from clean renewables: wind, solar, and hydro. ISO-NE Dashboard, Fuel Mix, February 20, 2022
We feel like the traveler in the story lost on the back roads who asked the farmer how to get to their destination, only to be told, "you could go there by the shore road, but the road is washed out...or you could go over the mountain...but the road is blocked by an avalanche," and finally, “You can’t get there from here.”
We struggle to identify and understand the barriers to rapidly switch from burning gas and oil to renewables including wind, solar, geothermal, and energy storage. We find ourselves protesting against officials and agencies that ignore laws, and are unable to convince those officials who may have the power to change regulations that favor fossil fuel generators like Project 2015A.
That regulatory authority rests with ISO-NE under the supervision of the Federal Energy Regulatory Commission (FERC). The stated vision of ISO-NE is
“To harness the power of competition and advanced technologies to reliably plan and operate the grid as the region transitions to clean energy.”
FERC is the United States federal agency that regulates the transmission and wholesale sale of electricity and natural gas in interstate commerce and the transportation of oil by pipeline in interstate commerce. ISO-NE operates the power system, administers wholesale electricity markets, and plans the future of the power system in New England.
ISO-NE regulations favor conventional, fossil fuel generator technologies, and create barriers to rapidly switching to wind generation and battery storage. FERC only encourages, rather than requires, updating those regulations to enable renewables to compete fairly. Renewables have become competitive in price with traditional energy resources. If ISO-NE really wanted to “harness the power of competition,” they would provide a level playing field for suppliers of renewable energy and battery storage who can provide a cheaper source of power.
However, in a move that favors fossil fuel generation and maintains barriers on reliable, low cost energy sources for another two years, ISO-NE and the New England Power Pool have decided to continue to prevent price competition from renewable sources. They argue that otherwise, fossil fuel plants would be forced to shut down, and suggest that it would threaten reliability by creating a void that renewable sources could not fill. However, they did not offer any supporting analysis to demonstrate how that void would be created. It is hard to understand how replacing a polluting source of energy with an equivalent source of clean energy can create a threat to reliability of electric supply, although such replacements do threaten the fossil fuel suppliers and generators. Boston Globe, February 5, 2022
We have tried and failed to get any official or agency with the authority to intervene to stop this polluting, harmful, and costly project 2015A. Not the Governor, not Kathleen A. Theoharides, the Secretary, Executive Office of Energy and Environmental Affairs, not the Department of Public Utilities, not the Mayor of Peabody or the Peabody City Council, and certainly not the Peabody Municipal Light Plant, and not even the Federal Energy Regulatory Commission, or even ISO-NE, the regional coordinator of electric energy.
We saw hope for change when the Commonwealth created a new Climate Roadmap law.
“The new law directs the Department of Public Utilities (DPU), the regulator of the state's electric and natural gas utilities, to balance priorities going forward: system safety, system security, reliability, affordability, equity, and, significantly, reductions in greenhouse gas emissions.” Office of Senator Mike Barrett, June 10, 2021
MMWEC, the manager of the Peabody peaker plant, is a non-profit, public corporation and political subdivision of the Commonwealth with the authority to issue tax-exempt revenue bonds to finance electric power projects on behalf of its members.
Through MMWEC, the collective strength of municipal utilities is focused on enhancing the rights and interests that benefit public power consumers.—MMWEC
MMWEC has displayed an egregious failure of transparency and betrayed their responsibility to serve the needs of citizens, including their health and their climate, and follow the intent of the legislature that we expect from an arm of the Commonwealth. But the Department of Public Utilities did not hold them to account under the terms of the new Climate Roadmap.
At a meeting of Elders Climate Action on February 8, 2022, we asked Senator Mike Barrett, who led the passage of the Climate Roadmap legislation,
“Can you see any way to halt the Peabody peaker, a gas/oil fired generator, now going forward despite the need for health and environmental reviews in line with the climate roadmap.”
Senator Mike Barrett replied that he is not concerned to stop the Peabody peaker, which is under federal regulation, from going forward.
We believe the peaker plant should have been halted under the terms of his climate roadmap legislation to allow a proper evaluation of the health and environmental risks.
Why should we pass laws if we are not prepared to implement and enforce them? We urge our legislators to actively pursue all avenues to hold all state agencies to their responsibilities under legislation that mandates the rapid end to burning fossil fuel, including to hold oversight hearings and to consider new legislation.
Finding our way
If we can get a map of the complex system of regulation, we may be better able to see the roadblocks and find a way around them.
A detailed report by Strategen Consulting, Assessment of Potential Energy Storage Alternatives for Project 2015A in Peabody, Massachusetts, Clean Energy Group, Massachusetts Climate Action Network, July, 2021, showed that battery storage could better meet the need to provide power during times of peak demand, at a lower cost, more reliably, and without pollution compared to the methane gas and oil Peabody peaker.
MMWEC has claimed that battery storage was more expensive than the use of gas and has published a levelized (lifetime) cost comparison of methane gas vs. battery power. On the face of it, the comparison is not a justifiable and valid comparison, MMWEC must have known that it was an unfair comparison.
In fact, Matthew Ide, MMWEC Treasurer and Executive Director of Energy & Financial Markets, admitted as much during the MMWEC Public Information Session at the Torigian Senior Center in Peabody on June 22, 2021. Ide stated that under ISO-NE market regulations, battery storage would not be eligible for forward reserve payments, while 2015A does qualify. Under the current regulatory regime, for MMWEC to provide power at the lowest cost, they could not gain as much income by using battery storage to meet their capacity requirements. Further, the transmission infrastructure made it difficult to import power to our region, where local supplies are barely able to meet demand. At the time of that information session, MMWEC had spent $9 million and had a $21 million cancellation obligation if the project were to be cancelled.
The ratepayers in the 14 participating communities were thus made guarantors of $30 million, unwitting investors in the MMWEC gamble to complete the project by June of 2023. And they are exposed to the uncertainty of a risky investment that is likely to become a stranded asset, either due to more stringent pollution regulations, or because renewable alternatives are already able to beat a gas generator on price and reliability. Why would ISO-NE pay more for the same electricity, unless due to pressure from the fossil fuel industry.
Ide, at the June 22, 2021 meeting at the Torigian Senior Center in Peabody, and at a meeting of the Hull Municipal Light Plant claimed that MMWEC was the helpless victims of regulations that forced them to continue the use of fossil energy sources.
They could instead speak out and engage with climate activists and all the light plants and ratepayers that they serve, and support change that will protect us all.
We know that MMWEC fully understood the benefits of battery storage, because at the same time, MMWEC had partnered with Anbaric Development Partners, LLC (Anbaric) to develop a 100 MW battery storage facility, the “Westover Energy Storage Center,” in Ludlow on property of MMWEC.
“Anbaric develops large-scale storage projects. Our storage projects support our transmission work by easing the integration of intermittent renewables. Our storage business focuses on bulk storage projects of 50 MWs and up, that maximize the value of renewables, reduce the demand for gas-fired peaking plants, and stabilize grid operations energy to markets and strengthen the grid.”
They sought approval from ISO-NE to provide capacity power at below the threshold minimum price for battery storage, which was $2.601/kW-month. ISO-NE uses their “minimum offer price rule” (MOPR) to set a minimum price for each type of power supply to provide a guide for evaluating offers to sell power, and to create a barrier to unrealistic prices meant to gain an unfair market advantage. ISO-NE rejected the Westover proposal because they deemed their low price as unfounded and unproved by their documentation. That is surprising, because Anbaric is experienced in developing large battery installations and should be capable of doing a valid analysis of projected costs.
When MMWEC and Anbaric appealed to the Federal Energy Regulatory Commission (FERC), they lost. Although FERC stated that the regulations were in need of revision, they let stand the rejection of the MMWEC/Anbaric proposal.
“...The existing Tariff appears to be unjust and unreasonable. ISO New England’s MOPR regime ... appears to act as a barrier to competition, insulating incumbent generators from having to compete with certain new resources that may be able to provide capacity at lower cost. Such overbroad barriers are the antithesis of market competition...and increase the costs of state policies.” Joint Concurrence of Chairman Glick and Commissioner Clements Regarding ISO New England Inc. January 21, 2022.
Thus we have lost the benefits of clean, reliable energy storage that was deemed too inexpensive! Worse, we have locked in a new polluting source at a time when we must rapidly switch to clean renewables.
RENEW Northeast, a consortium of energy companies focused on renewable technologies criticize the ISO-NE regulations that favor old technologies that burn fossil fuels. NEPOOL is New England’s independent, FERC-approved stakeholder advisory group on all matters relating to the competitive wholesale market rules and transmission tariff design. Renew Northeast argued to adopt rates proposed by NEPOOL rather than those proposed by ISO-NE.
“Despite renewable power’s advances, ISO-NE continues to limit it from full participation in electricity markets because it relies on outdated data that reflects higher than actual costs for renewables – particularly those for offshore wind. This exclusion hurts both renewable generators and ratepayers. It also prolongs the use of dirtier power and keeps prices artificially high for consumers while perpetuating financial advantages to conventional generators.”—Renew Northeast
“The NEPOOL Alternative reflects that renewable energy and battery storage resources are already competitive and should not be subjected to ISO’s administrative screen that uses artificially inflated cost estimates for these resources that could exclude them from the market,” said Francis Pullaro, Executive Director of RENEW Northeast. “ISO’s proposal to erect barriers to participation in the market by renewable energy, particularly offshore wind, will only result in making prices artificially high for consumers while perpetuating financial advantages to conventional generators.”—Renew Northeast
Paul Dale, Chair of the MA Sierra Club energy committee, has pointed out that there is a significant problem not addressed by a peaker plant or short-term battery storage, namely multi-day peak reliability in winter when gas supply is constrained. The Peabody peaker is licensed to run on oil for up to 250 hours a year, or 10 days, and Dale points out that the peaker is actually an oil-fired reserve source. Dale, The proposed peaker power plant in Peabody is unnecessary, harmful and costly, October 30, 2021; Revised Oct 31, 2021. One future solution for winter reliability would be offshore wind, which is plentiful and reliable during a winter storm and cold snap; provided that the transmission system is upgraded to distribute the power to where it is needed.
Advocates and legislators have been critical of the lack of transparency around the planning and approval of Project 2015A. But the egregious level of intentional deception on the part of MMWEC has been used to advance a gas fuel peaker plant when such installations are being phased out in favor of renewable solutions. If the public and state regulators had but known that MMWEC had been trying to get approval for a large battery storage facility, a rational decision would have been to stop the Peabody peaker project. In a year or two it is likely that ISO-NE regulations will have been updated to offer a fair chance to renewable resources.
Our children and grandchildren will pay the price of a world becoming hostile to the natural systems that support our lives if we allow this irresponsible behavior to continue.
Jerry Halberstadt, Peabody, Breathe Clean North Shore; Clean Power Coalition
Co-Signers: name, location, affiliations for identification only
Nathan Phillips, Newton, MA, Boston University
Susan Smoller, Peabody, Breathe Clean North Shore
Ron Smoller, Peabody, Breathe Clean North Shore
Judith Black, Marblehead, 350 Mass
Pat Gozemba, Salem