Exelon Shocker:Company Announces they Will Shut Down Mystic Station by 2022; Purchases of Distrigas/ENGIE
In what the company called a “difficult day,” and one that could have dire ramifications for the electrical needs of the entire Greater Boston region, Exelon Generation on Lower Broadway filed with ISO New England on Thursday morning, March 29, to retire all of its Mystic Station generation equipment by 2022.
The company cited problems with the reliability of fuel supplies and lack of predictability with regards to property values – alluding to a fight that has been going on for the last year with the City of Everett over a longtime tax break that is due to expire soon. That said, they also left the door open a crack saying the closure was contingent on “regulatory reforms.”
It would effectively close down a fairly new power plant that generates 2,000 megaWatts of power, is the second largest provider of power to Greater Boston and accounts for about 40 percent of the region’s power needs. The plan would retire Mystic Station’s Generating Units 7, 8, 9 and the Jet unit by June 1, 2022.
Absent any regulatory reforms to properly value reliability and regional fuel security, the company said, these units will not participate in the Forward Capacity Auction scheduled for February 2019, the company said.
Also, in a curveball move, Exelon announced it would purchase the ENGIE (Distrigas) LNG terminal next door, a company that supplies most of the fuel used by Exelon to create electricity and a long-time supplier to them.
“Mystic has a strong track record as a source of reliable, around-the-clock electric supply to over two million homes in New England,” said Ron DeGregorio, president of Exelon Power. “However, the ISO-NE market fails to properly reflect the reliability and fuel security benefits that these power plants provide to the region.
“Today is a difficult day, not only for the talented men and women who have dedicated themselves to operating Mystic safely and reliably every day, but also for their families, their communities, and all of their colleagues here at Exelon,” continued DeGregorio. “We will continue to engage in supportive, open and honest dialogue with employees in the coming months.”
ISO New England said it would immediately commence a study to see what the ramifications of closing such a major power plant might be without such a major provider.
“I can confirm that Exelon Generation submitted a formal request to ISO New England to retire its four Mystic generating units in Everett in 2022,” said Marcia Blomberg of ISO New England. “Together, the four units at the Mystic Station are capable of producing about 2,000 megawatts (MW) of electricity, making it one of the two largest generating stations on the regional power system. The ISO will conduct a study to ascertain how these retirements could affect power system reliability and will release the results as soon as possible.”
ISO New England is an independent organization charged with ensuring the reliability of current and future electrical and utility needs of the New England region.
Gov. Charlie Baker’s administration – who recently announced a plan to obtain hydro power from Canada via a line going through Maine – said the announcement is one reason they have tried to diversify the region’s power supply – not making it just of natural gas-fired power plants like Exelon.
“The announcement reinforces why the Baker-Polito administration is pursuing a strategy to bring more renewable sources online, such as hydroelectric and wind, and to expand natural gas capacity along existing right of ways so the Commonwealth can provide Massachusetts residents and business with reliable, cost-effective clean energy while reducing carbon emissions,” said Peter Lorenz, communications director for the Energy and Environmental Affairs cabinet office.