Press Release  AG Healey Makes Recommendations to Modernize Wholesale Electricity Markets Following Clean Energy Symposium

BOSTON — After hosting a symposium in October attended by top thought leaders on how New England’s wholesale electricity markets must adapt to a clean energy future, Attorney General Maura Healey issued a white paper outlining changes the region could adopt to best support its climate goals, keep the lights on, and ensure reasonable costs and equity for customers.

The day-long symposium, convened by the AG’s Office, was held at the Federal Reserve Bank of Boston on October 24 and represented varied points of view, experience, and expertise from academia, practitioners, and a wide spectrum of the region’s electric industry stakeholders.

“As the existential threat of climate change grows, our wholesale electricity markets must support all the clean energy resources we need,” AG Healey said. “This symposium has generated important recommendations to help transition our electricity system away from polluting fossil fuels and towards a future that is clean, equitable, cost effective, and reliable.”

“In the midst of a massive change in the electricity supply mix and how electricity can drive our economy, it is critical to examine how the electricity markets need to evolve to support reliable service and continued investment,” said Dan Dolan, president of the New England Power Generators Association, Inc. “This symposium, under the leadership of the Attorney General, offered a unique opportunity to explore the difficult issues that the Commonwealth and region must wrestle with as we meet our climate obligations. Much work remains, but it is clear that with the right, thoughtful framework in place we can continue to deliver reliable, cost-competitive, and clean electricity for consumers.”

According to the white paper issued by the AG’s Office, New England’s competitive wholesale electricity markets were designed for and implemented in an electric grid dominated by large coal, nuclear, and natural gas power plants. But today, that regional electricity mix is evolving rapidly. “Our wholesale electricity markets must be ready to support this wide scale deployment of low/no-carbon resources as well as the decarbonization of the heating and transportation sectors,” the white paper states.

In making its recommendations, the AG’s Office agreed with symposium participants that the marketplace where energy resources compete to sell their electricity has not adjusted to the new reality of building a clean energy economy. In today’s white paper, the AG’s Office has identified potential next steps to help advance market modernization. These recommendations include:

Wholesale/retail coordination

State public utility commissions should adopt retail rates and supporting infrastructure to provide customers with more information about the actual price of electricity, which varies throughout the day. This would incentivize customers to buy when the cost of electricity is low.

ISO-New England (ISO-NE) and the New England Power Pool (NEPOOL) should study options to improve price signals in the wholesale market to better encourage participation by customer-owned resources like energy storage, energy efficiency, demand response, and distributed solar.

Resource adequacy

New England states should work together to provide guidance to the region about who they would like to define and deliver the kinds of electricity needed to ensure reliability and meet our clean energy future.

NEPOOL/ISO-NE should consider possible wholesale market frameworks that best support a clean energy future. This discussion could be assisted by an independent facilitator dedicated to ensuring an efficient and productive process. 

Carbon pricing

Building on the region’s success with Regional Greenhouse Gas Initiative (RGGI) and its current work on the Transportation and Climate Initiative, the New England states should convene a regional task force to consider tools for achieving the states’ emissions reductions mandates, including the expanded use of carbon pricing.

To ensure that the burden of carbon-pricing policies is shared equitably, the AG’s Office will review existing studies to consider the relative socio-economic and geographic impact of expanding carbon pricing in New England.  

Public education and participation

The AG’s Office emphasizes that resolving these issues will require the input and support of both traditional stakeholders and the broader public, including grassroot advocates, academics, elected officials, and the upcoming generation of young people who are passionate about addressing climate change. As the Massachusetts ratepayer advocate charged with representing customers on these matters, the AG’s Office will host a “teach-in” that will provide opportunities for the public to learn about these important issues and to express their views.

The AG’s Office also will continue its work with regional consumer advocates, meet with elected officials, and provide educational opportunities to enhance the knowledge of young people and other concerned citizens about the New England electrical grid and its relationship to the states’ climate policies. 

The symposium was made possible with funding from the Barr Foundation, and support from the Regulatory Assistance Project, along with Dr. Jonathan Raab of Raab Associates who helped design and facilitated the symposium.

As the ratepayer advocate for Massachusetts, AG Healey is committed to ensuring access to clean electricity at reasonable prices for all Massachusetts consumers. In December, the AG’s Office launched an effort to help empower the state’s ratepayers in Massachusetts with a petition and educational video and encouraged them to call on ISO-New England to set market rules that support cleaner energy resources.

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