As the Regional Transmission Organization (RTO) for New England, ISO New England (ISO-NE) is required to identify transmission infrastructure needs essential for maintaining power system reliability and an efficient wholesale electricity marketplace, or for meeting public policy goals set by federal, state, and local governments. ISO-NE then runs a request for proposal (RFP) process to find competitive solutions to these needs or, for more immediate reliability needs, performs a solutions study. ISO-NE implements these responsibilities following the regional system planning process described in Attachment K of the Open Access Transmission Tariff (OATT) and the technical requirements and process detailed in the transmission planning guides.
Identifying System Needs
Identifying system needs involves a collaborative, iterative approach, which includes the following.
- ISO-NE regularly performs needs assessments to study the adequacy of the region’s networked transmission facilities to maintain reliability and promote the operation of efficient wholesale electricity markets in New England.
- Additionally, Order No. 1000, Transmission Planning and Cost Allocation, from the Federal Energy Regulatory Commission (FERC) requires ISO-NE to study transmission needs related to federal, state, or local public policy goals. (This process is expected to begin in January 2017.)
- Planning study efforts are based on assumptions described in the ISO-NE Transmission Planning Technical Guide and discussed at Planning Advisory Committee (PAC) meetings, with related materials posted on the PAC webpage. Economic metrics and public policy metrics are also used to identify market efficiency and public policy needs.
Once Attachment K requirements are met, projects are listed on the Regional System Plan (RSP) Project List, a cumulative listing of proposed transmission solutions for pool transmission facilities (PTFs), and classified as one of the following:
- Reliability Transmission Upgrades (RTUs)
- Market Efficiency Transmission Upgrades (METUs)
- Public Policy Transmission Upgrades (PPTUs)
These may include the portions of interregional transmission projects (see below) located within the New England Control Area.
Depending on the type of transmission need and timeframe, ISO-NE runs an RFP process or a solutions study. These are detailed in the Transmission Planning Process Guide. In summary:
- If the identified need is expected to be required in more than three years’ time, ISO-NE solicits competitive solutions through a request for proposals (RFP) process. After evaluation, ISO-NE selects the proposal that offers the best combination of electrical performance, cost, future system expandability, and feasibility to meet the need in the required timeframe.
Excluded are “grandfathered projects”—proposed or planned projects that were on the Regional System Plan Project List prior to May 18, 2015, unless ISO-NE reevaluates the solution design.
- If the identified need is expected to be required in less than or equal to three years’ time and the requirements are met of Attachment K, section 4.1(j), Requirements for Use of Solution Studies Rather than Competitive Process for Projects Based on Year of Need, ISO-NE performs a solutions study to identify the most cost-effective way to meet the identified need. ISO-NE then develops the regional transmission solution alternatives with the input of transmission owners and the PAC, and selects the most cost-effective option to meet the identified needs.
- Where there is a combination of needs to be addressed, ISO-NE will first address needs expected to be required in less than or equal to three years’ time. Needs that remain after this solution is chosen, if any, will follow the process discussed above for needs expected to be required in more than three years’ time.
Needs Related to Market Efficiency or Public Policy Goals
For both, ISO-NE solicits competitive solutions through an RFP process as done for reliability needs outside of three years’ time.
ISO-NE, NYISO, and PJM also follow a joint planning protocol to coordinate planning and address planning seams that was approved by FERC on 11/19/2015. These interregional planning activities are documented on the Interregional Planning Stakeholder Advisory Committee webpage.
Allocating Transmission Costs
The New England electric grid is a tightly interconnected system. Therefore, costs for needed transmission projects are shared by consumers across the region, on the principle that all consumers benefit when the reliability of the regional network is improved. Similarly, costs are shared across interconnected neighboring grids.
- For reliability and market efficiency projects, costs for PTF facilities required for a regional need are allocated on a load-ratio basis—in other words, it’s based on the amount of electricity demand in each state. To learn more about ISO-NE’s responsibilities and method for deciding whether the region will share the costs for new or upgraded transmission facilities, see the Transmission Cost Allocation page.
- For public policy projects, a different cost allocation is used:
- 70% of the costs of upgrades are spread throughout the region on a load-ratio basis
- 30% of the costs are allocated on a load-ratio basis among states with public policies driving the need for the project
- For interregional transmission facilities, costs are allocated between each pair of regions, using an avoided-cost method. Each region’s share of the costs is determined by the ratio of a to b:
- The present value of the estimated costs of the region’s displaced regional transmission project or projects
- The total of the present values of the estimated costs of the displaced regional transmission projects in the regions that have selected the interregional transmission facility in their regional transmission plans
About Order No. 1000
FERC Order No. 1000 required ISO-NE, along with other RTOs across the US, to change aspects of its regional and interregional transmission planning and cost-allocation processes. This order, which took effect on May 18, 2015, in New England, changed the practice whereby existing New England transmission owners built transmission upgrades required for reliability or market efficiency needs to a process whereby certain transmission projects are open to competitive proposals from any qualified developer. As noted above, FERC Order No. 1000 also required ISO-NE and stakeholders to consider federal, state, and local public policy goals in the regional transmission planning process—see the FERC compliance order.