Generators say Mystic order mirrors their capacity price concerns
Washington — New England generators are telling regulators that ISO-New England’s current plan to keep 1,700 MW of gas-fired units at Exelon’s Mystic plant in Massachusetts running could unfairly reduce prices in the capacity auction and spur more retirements.
NEPGA’s request echoes a complaint they filed earlier this year, but now they say a recent order shows the US Federal Energy Regulatory Commission shares their concerns. In May, ISO-NE sought a tariff waiver (ER18-1509) for an out-of-market remedy, in the form of a cost-of-service agreement with Exelon, to keep Mystic units 8 and 9 operating to ensure reliability in 2022 and beyond. The units use LNG from the Distrigas import terminal, rather than pipeline gas, for fuel supply.
FERC on July 2 threw out ISO-New England’s request — saying it was too big a change to be done through a waiver — and required the ISO to make short- and long-term fixes to its rules to address fuel-security concerns. FERC on July 13 then accepted and suspended Mystic’s cost-of-service agreement in case ISO-NE’s short-term tariff accommodates the deal.
The grid operator is working on a short-term proposal to file by the end of August. ISO-NE is planning on treating resources retained for fuel security as price-takers in Forward Capacity Auction 13, and will review treatment for later periods, said Marcia Blomberg, a spokeswoman for the ISO.
This means the Mystic units’ 1,700 MW of capacity would be offered into the auction for the 2022-23 period at a price of zero, ensuring they clear the market.
NEPGA claims FERC’s July 2 order mirrors the positions NEPGA took in a May complaint on the issue (EL18-154).
“The commission’s clear preference is for ISO-NE to treat fuel security resources in a way that avoids offering them into the FCA at uncompetitive offer prices,” NEPGA said.
Generators asked FERC to clarify that ISO-NE’s plan is at odds with the commission’s directives. FERC should also clarify that the ISO should file a proposal that either offers fuel security resources at their competitive offer price, or procures the resource outside of the forward capacity market, with the obligations and compensation for the service dictated solely by a cost-of-service agreement, NEPGA said.