Power grid OKs new method of operation

HOLYOKE, Mass. – The managers of New England’s power grid voted Thursday to create a new method of operating the wholesale electricity market.

Independent System Operator-New England officials say the new system will make power rates more equitable across the region, but critics say it will unfairly burden ratepayers in Greater Boston.

All of New England now is treated as one wholesale power market, with the costs of so-called “electrical congestion” in Greater Boston and southwestern Connecticut spread to ratepayers across the region.

Under the system that will go into effect in March, Connecticut, Maine, New Hampshire, Rhode Island, and Vermont each will have its own wholesale market price. Massachusetts will be broken into three pricing zones.

Because it’s more difficult to supply power in Greater Boston and southwestern Connecticut because of a shortage of generators and reliable transmission lines, ISO-New England officials say it’s likely that ratepayers there will be paying more for power in the short term.

Under the current system, ratepayers in areas with stronger power supplies such as Maine and western Massachusetts are “subsidizing the power costs for Greater Boston and southwest Connecticut” said ISO-New England spokeswoman Ellen Foley.

Attorney General Thomas Reilly said rates in the Boston area could unfairly increase by as much as 14 percent.

“This is fraught with peril for ratepayers,” Reilly said. “The increase could be as high as 14 percent, but we don’t know for sure what they’ll be. It’s proceeding at a reckless manner.”

Price increases would be offset by power companies opening more generators and upgrading transmission lines in the congested areas, ISO officials said.