In the world of electricity and energy, the concept of local control and sovereignty often takes a backseat to complex corporate structures and regulatory bodies. This is particularly evident in the case of New Hampshire, where the state's electric sovereignty has been ceded to an entity called ISO New England, an organization with a rather obscure presence and an even more complicated governance structure.
As the state's Consumer Advocate, it's my duty to protect the interests of residential utility customers, and the lofty rhetoric of our state Constitution, which speaks of free and fair competition and limiting corporate power, rings hollow when it comes to electricity.
The Rise of ISO New England
ISO New England, a nonprofit corporation headquartered in Massachusetts, has assumed a threefold role in the region's electricity sector. It manages the grid, oversees the transmission system, and controls the wholesale electricity markets. This concentration of power is a result of industry restructuring that began in 1996, when utilities were required to sell off their generation assets, effectively abolishing New Hampshire's authority over a significant portion of its electricity sector.
The arrangements blessed by the Federal Energy Regulatory Commission (FERC) are so intricate that they resemble Pablo Picasso's famous painting, "Guernica." This complexity serves as a barrier to understanding and, perhaps, to meaningful change.
The Cost of Withdrawal
The recent study by London Economics International, commissioned by the General Court, explored the possibility of New Hampshire backing out of these arrangements and severing ties with ISO New England. The findings were clear: it would be an expensive endeavor, with higher transmission and energy supply costs estimated at $148 million annually. Legal fees and other associated costs would only add to the burden.
Accountability and Unaccountability
What's particularly concerning is the issue of governance and accountability. The study merely summarized the existing governance arrangements, which are dominated by advisory bodies with cryptic acronyms, and noted that FERC finds these arrangements "independent." However, this independence can easily be seen as a lack of accountability, especially when the nominating process for the ISO New England board is controlled by large generation owners and transmission utilities.
The situation is further complicated by the fact that ISO New England is incorporated in Delaware, a state that treats the board members as owners, with no legal rights for shareholders. This structure raises questions about who truly holds the power and who is ultimately responsible to the public.
A Crisis of Confidence
Contrast this with the situation in PJM, the nation's largest regional transmission organization, which is facing a governance crisis. FERC's chairman has issued a stark warning, demanding governance reforms by the end of September. The absence of a similar crisis at ISO New England might be attributed to its smaller transmission grid, but it also highlights a potential lack of scrutiny and a willingness to overlook high transmission charges in New England.
The London Economics study, while informative, failed to serve as a reminder to ISO New England and the transmission-owning utilities of New Hampshire's existence and its right to fair and transparent governance. It's a missed opportunity to advocate for the interests of residential utility customers, and it underscores the need for continued vigilance and creative solutions to ensure that local control and public interest are not merely rhetorical concepts.
