Customers paid $350 million to run Mirant Electric as backup

Grid operator kept Sandwich plant running despite lack of market demand

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 Rep. Matt Patrick makes a point during Wednesday night's discussion at Oak Ridge School in Sandwich concerning the Mirant Canal electric plant and the New England power grid. In foreground from left are Carolyn O'Connor of ISO-New England and Page Kane of Mirant. Behind Patrick is Chris Powicki of the Cape & Islands Renewable Energy Collaborative.

 Rep. Matt Patrick questions lack of emphasis on reducing demand for power

 By James Kinsella

In a period of four years, from 2005 to 2008, electric customers on Cape Cod and in southeastern New England paid $350 million to keep the Mirant Canal electric plant running when there was no market demand for its power.

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Customers paid $350 million over 4 years to keep the plant running in case not one, but two, large-scale breakdowns occurred simultaneously in thearea generation & transmission system.

Customers instead were paying to keep the plant running in case not one, but two, large-scale breakdowns occurred simultaneously in the area generation and transmission system.

Such a breakdown has occurred just once in recent years, in 2004, when a fire at the plant temporarily shut down two major transmission lines coming onto Cape Cod.

State Rep. Matthew Patrick, D-Falmouth, looks back at those years and that money, and wonders aloud what else that $350 million could have been used for.

Photovoltaic energy panels on every roof. Wind turbines throughout the Cape. A one-third share of the proposed Cape Wind offshore turbine farm.

The issue of how local ratepayers came to spend so much money without being asked is prompting Patrick and other Cape residents to take a closer look at the relatively obscure way that electricity is managed in Massachusetts and New England.

On Wednesday evening, about 60 people came out to the Oak Ridge School in Sandwich for a discussion sponsored by the Cape & Islands Renewable Energy Cooperative.

Also known as CIRenew, the non-profit organization seeks to bring together individuals and organizations working toward a sustainable energy future.

Much of the focus was on the Mirant Canal plant, which uses fuel oil, a now-expensive form of fossil fuel, to generate power.

"Where is the accountability to ratepayers? Is there any consideration for what is best for the customers?"
               - Rep. Matt Patrick

Power grid operator focuses on reliability

In recent years, between the rise in the price of fuel oil and the availability of less expensive power from other sources, there often was no market demand for Mirant Electric's power.

But the mission of the organization that manages the power grid in New England - the Independent System Operator for New England commonly known as ISO-New England - includes ensuring reliable power to customers in the six-state region.

The organization, which independent of direct control by utilities or by state governments in New England, is following guidelines set by the Federal Energy Regulatory Commission.

And ISO-New England decided that the possibility, however small, of the simultaneous loss of two major parts of the system - with the damage that the power demand could wreak on the rest of the weakened system - was too large a risk to take.

So Mirant Canal kept running in what technically is known as "out of merit" or "out of economic merit."

Thanks to the decline in recent months in the price of oil, Mirant Canal is "back in merit" as a market provider of electricity.

Further, Carolyn O'Connor, director of external affairs for ISO-New England, said transmission line improvements are now under way and are slated for completion this fall.

Those improvements, she said, will reduce the number of days that ISO-New England requires Mirant Canal to be running as a system backup from 365 a year to 50 or less.

Patrick questions assumptions underlying power grid governance

Yet the $350 million entire episode and the regulatory structure that allowed the episode to occur - and could allow it to reoccur - is leading Patrick to ask questions about that structure and its underlying assumptions.

The state representative wants state and federal energy regulators to better encourage reducing demand and to increasing the role that renewable energy and smaller, distributed generators play in the power grid's supply.

At present, the state's new Green Communities Act mandates that all new energy generation be compared to new energy efficiency programs or renewable energy to determine the least cost, not only economically but to society and the environment as well.

"I have filed legislation to do the same thing with transmission and we will take our argument to Washington and the Federal Energy Regulatory Commission if need be," Patrick stated.

"Where is the accountability to ratepayers?" the state rep asks. "Is there any consideration for what is best for the customers?

"Do we just go on mindlessly accommodating new fossil fuel generation or transmission for large generators without considering distributed generation? Apparently, if the industry has its way, we do."

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Some of the 60 people who turned out for Wednesday night's discussion at the Oak Ridge School.

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