Grid operator raises alarm at Mystic shutdown
Says power plant retirements pose unacceptable fuel security risk
This story was updated at 7:25 p.m. to include clarifying material.
THE OPERATOR OF THE REGIONAL POWER GRID said on Tuesday that it plans to take immediate steps to prevent two of Exelon’s power plants in Everett from retiring while it develops financial incentives to convince the company to keep the plants open in the future.
Exelon recently announced that it would retire its four power plants in Everett in 2022 unless the power grid operator, ISO New England, compensated the company for the reliability and fuel security the plants provide. “Changes to market rules are necessary because critical units to the region, like Mystic 8 and 9, cannot recover future operating costs, including the cost of securing fuel,” the company said.
The ISO appeared to comply with Exelon’s request. In a memo to the region’s power generators, Vamsi Chadalavada, the chief operating officer of the ISO, said the 1,600 megwatts of capacity provided by the Mystic 8 and 9 units cannot be retired.
Chadalavada said the ISO would seek approval from the Federal Energy Regulatory Commission “to retain Mystic 8 and 9 to maintain fuel security on the system.” Current federal rules only allow the ISO to retain power plants for reliability due to transmission security. With FERC approval, Exelon could then seek cost-of-service compenstion for its plants.
“The ISO believes it has limited options and needs to take this initial action in response to the Exelon retirement bids,” he said. “However, the ISO commits to work with stakeholders to develop a tariff-based approach for retaining retiring resources needed for fuel security on a short-term, going-forward basis.”Chadalavada said the ISO hopes to file new tariffs by November.
Exelon officials could not be immediately reached for comment.