Remember that time in EUT committee when, after sitting there patiently for several hours, Tanya told the members, “well, it’s better than doing laundry”?
Here’s another witty and homespun comparison to help us all picture what is really going on with electric market clearing rates.
The ISO-NE memo which mentions the $921 million overspend is here.
It is also posted as a PDF below, for your convenience. I’d suggest skimming the document: it’s a great example of how making a market more complicated allows for incentives to get all screwy and not benefit the end consumer.
Often, more middlemen = more costs. Complicated markets that only a handful of people understand do not benefit the ratepayer. In reading this document, it appears that adding wind and solar to the generation mix is the primary cause of this challenge: the generation capacity of natural gas and nuclear are easily predicted day ahead: but it’s still hard to predict the weather precisely enough for generation estimates.
As the PDF below states, “This recommended approach increases market sensitivity to renewable forecast error.”
The governor of NH, Kelly Ayotte, spoke about this $921 million issue recently, as reported by WMUR. Remember, New Hampshire is studying withdrawing from ISO-NE.
ISO-NE did not exist before 1997, yet New England still had electric power. ISO-NE has ballooned to 855 employees, recently requested $60 million for new offices, and the president was paid over $3 million in 2024. Overspending nearly a billion $ in less than a year is cause for concern, when you are a non-profit whose ostensible goal is to lower and smooth out pricing for the region.
