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.
“These retirements pose an unacceptable fuel security risk to the region during the winter months,” he said. “Our recent operational experiences during the cold spell, the projected state of the power system in 2022 through 2024, and the future trends identified in our operational fuel security analysis highlight the critical importance of this facility to the region’s fuel security.”
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.”
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About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
About Bruce Mohl
Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.
Chadalavada said the ISO hopes to file new tariffs by November.
Exelon officials could not be immediately reached for comment.
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