ISO-NE makes selection in first Order 1000 transmission RFP
In its first-ever competitive process for transmission development, ISO New England has narrowed its selection to one proposal to address the region’s power system reliability needs resulting from the scheduled retirement of the Mystic Generating Station in 2024. The Greater Boston Ready Path solution, a joint venture of National Grid and Eversource, has emerged from a field of 36 proposals based on its ability to solve grid reliability needs at the lowest cost and be available prior to the retirement of the Mystic Generating Station.
“The selection of the Ready Path project marks an important milestone in New England’s first competitive transmission solution process,” said Robert Ethier, ISO New England’s Vice President of System Planning. “Electricity customers of New England can be sure that this competitive process led developers to look hard at the most efficient, cost-effective ways to ensure a reliable power grid.”
In late December, ISO New England issued a request for proposals (RFP) under the Federal Energy Regulatory Commission’s (FERC) Order 1000, which requires the ISO to develop certain transmission upgrades through a competitive-bidding process. The ISO posted the final report on phase one of the RFP solicitation process on July 17.
This final report follows a discussion of the RFP review process at the June 17 meeting of the Planning Advisory Committee (PAC). Eight different developers submitted 36 proposals, ranging from $49 million to $745 million, as part of the first phase of the competitive solicitation.
The ISO reviewed each of these proposals to ensure they addressed the identified reliability needs, while meeting other requirements. Ultimately, five proposals addressed the needs for a reliable power system and met all other requirements. The ISO then compared these projects’ costs, which ranged from $49 million to $121 million. Given that the $49 million project is significantly less expensive (the next least expensive proposal is for $94 million), the ISO did not advance the other four projects to the second phase of review, as it is unlikely that further review would have led to their selection.
Development costs incurred during the second phase of review are charged to electric customers, so not advancing proposals that are unlikely to be selected delivers additional cost savings.
“Though the selection of the Ready Path project may have disappointed other transmission developers, the ISO’s responsibility to New England electricity customers is to select a project that ensures reliability, is timely, and is cost-effective,” Ethier said. “The project accomplishes these goals.”
The ISO will now begin working with National Grid and Eversource on a Solutions Study, as per the rules of the ISO’s tariff.
The draft report was open for stakeholder review and comment. The ISO has posted responses to comments received during this review period.
With Order 1000, FERC included a framework for transmission development through a competitive process. This RFP was issued under part of Order 1000 that addresses transmission upgrades needed for system reliability, allowing for the possibility of more creative solutions. A separate part of Order 1000 allows for competitive transmission solutions to achieve public policy requirements.