As soon as tomorrow (Thursday, April 4, 2024), New England could have a new long-term transmission planning process—and one that puts the states in the driver's seat.
The New England Power Pool ("NEPOOL") Transmission Committee voted on March 27 to approve a proposal, crafted jointly by ISO New England ("ISO-NE") and the New England States Committee on Electricity ("NESCOE"), to establish procedures for states to direct the ISO to solicit transmission solutions, including those needed to meet states' energy policy goals. The "Extended-Term/Longer-Term Transmission Planning Phase 2" proposal, "Phase 2" for short, follows on the heels of a "Phase 1" process that was approved by the Federal Energy Regulatory Commission ("FERC") in 2022. Phase 1 provides a roadmap for NESCOE to require that the ISO perform system planning analyses, including analyses that anticipate needs beyond a ten-year planning horizon. Phase 2 enables NESCOE to require that the ISO conduct solicitations to fulfill the transmission needs identified in Phase 1. After last week's decision by the Transmission Committee, the Phase 2 proposal needs to survive one more vote (by the NEPOOL Participants Committee) this coming Thursday before it is eligible to go up to FERC for approval.
The two phases, taken together, constitute a novel innovation in large-scale transmission planning that we've not yet seen outside of single-state ISOs: the handing-off of meaningful control over decisions to study and address transmission needs to state policymakers. The new process will enable NESCOE to determine—and direct the construction of—transmission infrastructure necessary to meet their respective states' energy policy goals or legal mandates around emissions reductions. By default, the costs of such projects will be regionalized where they are commensurate with project benefits; where such an allocation is insufficient to cover costs, individual states can pay the balance so that a project can proceed.
Notably, the March 27 vote saw the Transmission Committee approve an amendment requiring ISO-NE to conduct independent cost assessments of bids submitted by transmission developers. While bidders will still use their own methodologies to calculate project costs, the ISO will then re-estimate the costs of each project using a consistent methodology.
If approved by the NEPOOL Participants Committee, the proposed changes will take effect in August 2024.
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