Mass. AG Favors Adoption Of Dynamic Retail Pricing Options
March 09,2020
Massachusetts Attorney General Maura Healey (AG, or AGO) has issued a white paper outlining changes the region could adopt to, as stated by the AG's office, "best support its climate goals, keep the lights on, and ensure reasonable costs and equity for customers."
As previously reported, Healey has called for the elimination of residential electric choice (while still allowing municipal aggregation)
Among Healey's recommended policies are wholesale & retail market coordination
"The AGO agrees ... that the retail and wholesale markets should work together to advance real-time coordination between variable supply and flexible demand," the AG's office said
The AG's proposed next steps in furtherance of these goals include:
• ISO-NE and NEPOOL should study options for improved scarcity pricing in the energy market to provide more robust price signals and facilitate demand participation.
• "State public utility commissions should adopt policies that allow for time of use rates or other dynamic retail tariff options and advance enabling technologies such as advanced metering functionality, grid modernization, and smart EV charging."
Concerning resource adequacy, "The AGO agrees with Symposium participants that the FCM [forward capacity market] as designed today is not compatible with the region’s future electric-system needs."
"Given the Symposium discussions that revealed varying views regarding the best techniques, tools, or markets to ensure resource adequacy going forward, considerably more work on this topic is warranted. Many Symposium participants emphasized the need to move forward with a resource adequacy discussion as soon as possible. Many commented that a productive regional discussion requires the New England states to provide guidance on the threshold question of who should define and deliver resource adequacy (ISO-NE, states, market participants, other entity, or some hybrid). Some participants noted that the states need not wait for any in-depth study on how a wholesale market solution might be designed or implemented to answer this threshold question," the AG's office said
Against this backdrop, the AG's office said that potential next steps include:
• In 2020, the states should work collaboratively to address and attempt to answer the threshold question of who, going forward, should define and deliver resource adequacy that aligns with state clean energy policies and goals. This process could take varying forms. For instance, the states could convene a small advisory task force of state representatives and representative stakeholders to inform and assist in resolving this question. The states could commission a study outlining different approaches to resource adequacy, including approaches that have been applied in different parts of the country (ERCOT, MISO, NYISO, CAISO), and the relative risks and costs for market participants.
• Because time is of the essence, while the states consider the threshold question, NEPOOL/ ISO-NE should commence the process to consider possible wholesale market frameworks that are compatible with the implementation of state energy and environmental laws, as outlined in NESCOE’s July 16, 2019 letter to ISO-NE.11 This process could be assisted by an independent facilitator dedicated to ensuring an efficient and productive process.