The region’s energy supply, which New Hampshire draws from, is becoming less diverse and more susceptible to price volatility and reliability risks. Looking forward, ISO New England is concerned about the region’s growing dependence on natural gas as the primary fuel used to generate electricity, the potential retirement of several of its existing power plants, its diminishing fuel diversity, and the performance of its energy resources under stressed operating conditions.
The inclusion of reliable, competitively priced hydropower from The Northern Pass will benefit everyone in the region, including all electricity customers in New Hampshire, by:
Improving Electric Reliability
With the construction of The Northern Pass transmission line, New England will gain access to a new 1,200- megawatt power source that will provide the region with an added degree of electric reliability, and increase the ISO New England energy reserve margin for several years. This project will also enhance electric reliability by reducing the region's dependence on natural gas, particularly during high gas demand periods in the winter months.
Providing Greater Fuel Diversity
Hydroelectric energy transmitted over The Northern Pass line will provide fuel diversity benefits that ISO New England (ISO-NE) has determined to be essential at this time. In its 2010 Regional System Plan, ISO-NE notes New England's "high dependence on natural gas," and that diversification is necessary because the region continues to depend on natural gas for approximately 40 percent of its electric energy. The availability of 1,200 megawatts of hydro energy over The Northern Pass line will offset this adverse trend. This project will provide significant fuel diversity for New England, with up to a 20 percent reduction in dependence on natural gas. This, in turn, frees up natural gas for other uses. For example, the "freed up" gas that will result from this project is enough to heat and supply hot water for nearly a million homes.
Reducing Transmission Congestion
Given the large differential between the low power costs in Québec and the high electricity prices in the ISO New England (ISO-NE) market, the existing transmission connections between the two systems are very highly utilized, especially during peak periods (i.e., periods of high electricity demand). The additional capacity provided by The Northern Pass line will reduce transmission congestion between Québec and the New England electric system by:
- Allowing more competitively priced energy to be imported into New England, displacing higher cost generation on the ISO-NE system; and
- Allowing more of the energy imported from Québec to be delivered during peak hours when marginal generation costs and prices in New England are highest.