New England Electricity Market Overview IPPNY Spring Conference - - PowerPoint PPT Presentation

IPPNY Spring Conference

New England Power Generators Association

May 8, 2018

New England Electricity Market Overview

Source: https://www.iso-ne.com/static-assets/documents/2018/03/20180306_pr_2017prices.pdf

New England wholesale electricity prices have declined by 49% between 2007 and 2017

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10 20 30 40 50 60 70 80 90 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Price per MW/h

$33.94 $66.72

New England transmission rates have increased more than 400% since 2007

Source: https://www.iso-ne.com/static-assets/documents/2015/12/section2-rate-summary.xls 3

20 40 60 80 100 120 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Price per kW/year

$27.91 $111.96

Breakdown of a Connecticut Electricity Bill

Wholesale Power Market costs went from making up 61% of an average residential customer’s bill down to 37%.

Customer Bills Up 6% in 9 Years with Energy Costs Down 35%

113%

• 35%

67% $40 $67 $68 $44 $4 $7

$0 $20 $40 $60 $80 $100 $120 $140

Jan-08 Jan-17

Monthly Electricity Cost

Monthly Bill for Residential Eversource CT Customer Using 600 kWh/mo

Renewable Energy, RGGI, & Efficiency Program Charges Wholesale Power Market Transmission & Distribution Charges

Total Cost $112 Total Cost $119

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New generation representing nearly 15% of peak demand is scheduled to come online by mid-2020

674 1373 353 1459 264

200 400 600 800 1,000 1,200 1,400 1,600 2016/17 2017/18 2018/19 2019/20 2020/21 Capacity, MW Planning Year (June - May)

ISO New England New Generation Over 4,000 MW of new generation is being developed without consumer subsidies or state-backed contracts

$0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20

30,000 32,000 34,000 36,000 38,000

$/kW-mth Total Capacity Offered in MW

Demand Curve Comparison

2014 Original Demand Curve 2016 Marginal Reliability Impact 2017 Marginal Reliability Impact + New Net CONE 2018 Proposed MRI +Net CONE+ New BTM Solar Modeling

Illustrative Capacity Market Revenue Impact

Note: Assumes 600 MW electric generation unit and the market clears at 34,000 MW

Capacity Capacity Price Revenue $/kW-mth Mil.$ 2014 Original Demand Curve $14.00 $101 2016 Marginal Reliability Impact $12.50 $90 2017 Marginal Reliability Impact + Net CONE $8.55 $62 2018 MRI + Net CONE + New BTM Solar Modeling $6.40 $46 2018 vs. 2014 ($55) % Chg.

• 54%

Administrative changes to demand curve introduces market uncertainty

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Fuel security concerns from ISO-NE are driving major market actions

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• ISO-NE released fuel security analysis stated that load shedding

would occur in 19 of 23 fuel mix scenarios in Winter 2023/2024

• Mystic Generating Station – 2,000 MW outside of Boston – Exelon

announced retirement by May 31, 2022 as well as purchase of adjacent LNG terminal (Distrigas)

• ISO-NE counters by stating intent to hold Mystic 8 & 9 (1,400 MW)

due to “fuel security risk”

• Fueled by LNG and largest Distrigas customer
• ISO-NE has filed a Tariff waiver with FERC seeking ability to hold

for reliability

• Exelon will now file two-year cost of service contract bringing

Mystic 8 & 9 to mid-2024

New England state electricity procurements cut to the core of the competitive market

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• Massachusetts is reviewing a 20-year contract with Hydro Quebec

for 9.45 TWh over the New England Clean Energy Connect transmission line in Maine

• RFP also out for offshore wind with requirement to get to

1,600 MW in the next several years

• Connecticut issued an RFP for 12.45 TWh from Class I RPS, large-

scale hydro and nuclear

• These RFPs, coupled with existing RPS requirements, mean:
• Nearly 60% of electricity demand in New England could be

carved out of competitive wholesale markets

Source: http://www.eia.gov/environment/emissions/state/, released October 24, 2017

New England transportation & power plant CO2 emissions from 1990 to 2015

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20.0 30.0 40.0 50.0 60.0 70.0 80.0 Transportation Power Plants

Transportation: 6% Increase since 1990 Power Plants: 40% Decrease since 1990

Questions?

www.NEPGA.org Follow us on Twitter – @NEPowerGen