Power from Canada is No Panacea

Last Thursday afternoon, an event occurred on the New England power lines (called “ties”) from Canada which should give any proponent of buying large amounts of power from Canada pause. It turns out that at the same moment an executive from Northeast Utilities was speaking at the ISO-NE Consumer Liaison Group meeting that day about the desirability of building a new large transmission line from Canada, Hydro-Quebec (HQ) was cutting electricity supply on the existing ties to New England by more than half because of a problem on two 750 kv transmission lines which circle Montreal. As a result, the Highgate tie in Vermont and the HQ II tie in New Hampshire were brought to zero, and the New Brunswick tie was reduced to 450 MWs. What caused the trip is not yet known (or at least not public), but the event should give pause to anyone who believes that buying more power from Canada is the sole solution to our over reliance on natural gas fired generation and limited natural gas pipeline capacity. There are serious risks in this strategy.

Another scary thing happened Thursday afternoon when the Canadian power ties were cut, 10,000 MWs of generation within New England was not immediately available when needed. And the hourly wholesale market price of electricity jumped into the $2,000/Mwh range ($20/kilowatt hour). Our domestic generation could not ramp up fast enough to replace what was lost from Canada. This proves that the region must have reliable economic in-region generation even if we buy more power from Canada. How many more events or price spikes have to happen before policy and decision makers in the region wake up and do something? No more studies are needed; no more stakeholder processes are needed. Action is needed, now. New England is facing a very real energy crisis. The issues aren’t academic anymore; they pose very real operation and economic problems for the system that will impact all ratepayers.

There are new leaders in Massachusetts in the Governor’s office, the Attorney General’s office and in the Legislature. They need to get up to speed quickly on the analytical and policy work that has been done to date without having to rehash the issues. There isn’t time for that. Massachusetts is roughly half of the electricity demand in the region and probably has an even bigger percentage of the non-generation use of natural gas. While it would be nice to have each of the six New England states agree on a path to resolve these issues, there isn’t time for that either. Massachusetts needs to show leadership and announce in the first quarter of the New Year exactly what the state will do to alleviate this crisis.