As customers of the New York power grid continue to deal with the daily threat of reduced power reliability, politicians in the Northeast are now expressing concern over the possibility of rate hikes associated with the development of the proposed Northeast Regional Transmission Organization (NRTO). The plan would join the New York and New England power grids and could be ready to serve the region’s 33 million residents as early as next year.
Representatives from smaller New England states like Connecticut and Massachusetts are worried that the new arrangement will marginalize their constituents and fail to meet their power needs at reasonable prices. In fact, a study conducted earlier this year by ISO New England and the New York ISO, which operate the regions’ respective power transmission systems, revealed New York customers would save almost $282 million over the next few years if the merger takes place, while those in New England would pay nearly $62 million more in the same time period.
However, there is talk the ISOs are considering plans to split the cost savings between the two grids. Power has been cheaper in New England over the past three years because the energy supply is more abundant – energy companies in the region have built or are in the process of building 7,000MW of new generating capacity, while New York has only expanded its capacity by 1,000MW.
The merger would require some plants in New England, now idle, to begin producing power for eastern New York. And representatives from New England ISO are confident the merger will have mutual benefits for the two sides. “Prices in both regions will decline as competition increases,” says Ellen Foley of ISO New England. “The larger grid will be more reliable, avoiding some of the summer price spikes.
