By “hastily” implementing changes to its capacity retirement scheme, ISO-NE can allegedly enforce an early retirement of the Mystic Generating Stations which has been classified as “system-relevant” for regional power supply.
Exelon claims ISO NE’s tariff changes, approved without FERC review, are in breach of the grid operator’s tariff scheme, especially with regards to Order 1000 provisions on competitive transmission procurements.
Mystic is “system relevant”, says ISO New England
Gas-fired power generation is not always economical in New England. In fact, Exelon two years ago approached FERC saying it would only keep its two large Mystic gas power blocks and the adjacent Everett LNG import facility operational between 2022 and 2024, if it gets permission to collect $1 per month from all electricity customers in New England.
Trying to put pressure on the regulator, Exelon had floated plans to retire Mystic’s two gas power units at the end of May 2022 rather than continue to lose money. Estimating the future costs of operation, Exelon said at the time its annual fixed revenue requirement for the two plants totals nearly $219 million in 2022-2023 and nearly $187 million in 2023-2024.
However, the regional power grid operator ISO New England insisted it needed the 1,700 MW capacity of the two gas power blocks to keep the system in balance.
Pipeline constraints limit the amount of natural gas that can be transported to the U.S. north-eastern state, hence ISO NE urged FERC at the time that Exelon needs to keep the Mystic plants running because it can rely on imported LNG.
Massachusetts looks beyond fossil fuels
Since June 2020, the public regulator is investigating again whether the Boston Everett LNG import terminal might have to close, given that the government of New England considers phasing out all fossil power stations.
Everett LNG, in operation since 1971, is used primarily to balance peak demand during the winter season, when gas consumption for heating is prioritized. The terminal feeds regasified LNG into two interstate gas pipelines and the Mystic Generating Station.