ISO-NE seeks US FERC permission to keep Exelon units online for fuel security
In an apparent first, the New England grid operator has asked federal regulators for permission to pursue a reliability must-run agreement to keep two retiring units of Exelon’s Mystic Generating Station in Middlesex, Massachusetts, online to address reliability risks related to “fuel security.”
The loss of Mystic units 8 and 9 could cause mandatory reliability standard violations by depleting 10-minute operating reserves “on numerous occasions” and result in rolling blackouts in the region during the winters of 2022-2023 and 2023-2024, the ISO New England told the Federal Energy Regulatory Commission in filing Wednesday.
Moreover, allowing those units to retire could jeopardize the continued financial viability of the adjacent Distrigas LNG terminal by causing that facility to lose its biggest customer, according to the grid operator. “Should Distrigas also retire, the region’s risk of reserve depletion and load shedding would increase, as would the length and severity of such events,” the ISO-NE warned.
Exelon in March announced plans to close the combined-cycle, natural gas- and waste heat-fired Mystic River 8 and 9 and two other generating units at the Mystic site, maintaining that the ISO-NE’s market is flawed because it fails to properly compensate the reliability and fuel security benefits the units provide. Exelon said it intended to retire the units when their existing capacity supply obligations expire May 31, 2022.
In the wake of that announcement, the ISO-NE released a memo explaining that it had determined Mystic units 8 and 9 need to remain online for fuel security reasons and that it intended to ask FERC for permission to enter into a reliability must-run agreement with Exelon to ensure they do so.
The ISO-NE’s Wednesday filing followed through on that commitment, noting that Exelon’s planned retirements of Mystic units 8 and 9 come at a time when the region’s stakeholders “are grappling with a growing threat to the reliable operation of the New England electric system.”
“This threat is posed by the region’s increasing reliance on natural gas-fired generation despite essentially static regional natural gas pipeline capacity,” the ISO-NE said (ER18-1509). “The problem is most critical during the winter months, when the region’s pipelines are most constrained.”
Most gas pipeline capacity in New England is under contract to the local natural gas distribution utilities that serve retail gas consumers, and gas-fired power plants in the region typically rely on surplus capacity that local utilities release temporarily in the secondary market, the ISO-NE said. Pipeline capacity, therefore, often is unavailable for gas-fired generators when firm shippers’ demands are greatest, typically during the coldest winter weather.
