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Sometimes in Winter - Gas-fired Power Generation in New England This Winter and Next

This winter will be the last go-round for ISO New England’s Winter Reliability Program, under which the electric-grid operator in the natural gas pipeline-challenged region provides financial incentives to dual-fuel power plants if they stockpile fuel oil or LNG as a backup fuel. This coming spring, a long-planned “pay-for-performance” regime will go into effect, and gas-fired generators that can’t meet their commitments to provide power during high-demand periods — such as the polar vortex cold snaps that hit the Northeast in early 2014 — will pay potentially significant penalties. Today, we discuss the pitfalls that the pipeline capacity-challenged region may encounter as its power sector becomes increasingly gas-dependent.

Bostonians and other New Englanders pride themselves on their winter hardiness. They scoff at doomsday nor’easter forecasts from the Weather Channel. They think nothing of putting on five layers of L.L. Bean clothing to watch Tom Brady and the Patriots play in subzero temperatures at Gillette Stadium. They’ve even perfected the practice of saving the curbside parking space they just cleared of 20 inches of snow: it’s called the “parking chair” or “space saver” — usually an old plastic chair or Home Depot bucket that’s centered in the newly cleared space when they drive away so they have a nice place to park when they return from a quick run to Dunkin’ Donuts or Cumberland Farms. (Space saving is legal in most of Boston for up to 48 hours during a snow emergency.)

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