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ISO-NE asks FERC to keep Mystic units operating

08 May 2018 20:34 (+01:00 GMT)
ISO-NE asks FERC to keep Mystic units operating

Houston, 8 May (Argus) — Electric grid operator ISO-New England has asked the US Federal Energy Regulatory Commission (FERC) to allow two units at Exelon's Mystic generating station in Boston, Massachusetts, to remain operating in order to ensure system reliability for the regional grid.

Exelon in March announced it would have to shut the Mystic plant absent any regulatory reforms to properly value reliability and regional fuel security. The utility said the ISO's market rules and FERC's inaction on the matter had forced its hand. The two units operate at 1600MW in the winter months, and the grid said their loss would create significant additional reliability concerns.

The ISO last week filed a petition with FERC to waive certain tariff provisions in order to allow the two units to continue operating.

ISO-New England earlier this year said fuel security was its greatest challenge of 2018 amid growing demand for natural gas combined with robust public and regulatory opposition to new gas infrastructure in the region. Natural gas is now the greatest source of electricity generation across the six New England states. It represented 49pc of the region's electric load in 2016, up from 15pc in 2000, and is expected to rise to 56pc by 2026.

"Exelon's planned retirements come at a time when the ISO and New England stakeholders are grappling with a growing threat to the reliable operation of the New England electric system," the FERC filing said. "This threat is posed by the region's increasing reliance on natural gas-fired generation despite essentially static regional natural gas pipeline capacity."

ISO-New England asked FERC to specifically waive seven sections of its market rule 1, which applies to its criteria for generation retirements, as well as one provision for evaluating upgrades to the transmission system. The grid operator asked FERC to issue a decision no later than 2 July. That date would provide Exelon enough time to enter the units into ISO-New England's next forward capacity auction.

The ISO recently made rule changes to that auction, a market structure that provides steady income for electric power plants, in order to better accommodate renewable energy. The capacity payments can be a boon for utilities during times of low demand, such as the shoulder seasons and parts of summer when weather can be mild in New England.

Exelon had attempted to remove two Mystic units from the 2021-22 forward capacity market, which would mean it would not be required to run them, but ISO-New England rejected that attempt because of the grid's reliability issues.