PROVIDENCE – Regional regulators are confident New Englanders should be able to keep the lights on in 2021-2022 after a forward-looking auction last week ended with a surplus of generation capacity.
The auction, known as the Forward Capacity Market, is held each year by ISO New England to ensure the region has enough power generation under contract for three years in advance.
ISO New England, the six-state electricity grid regulator, announced on Feb. 8 the auction closed with sufficient resources and at the cheapest clearing price in five years totaling $4.63 per kilowatt month. The clearing price last year totaled $5.30 per kilowatt month.
“Preliminary results indicate the clearing price was the lowest in five years due to a surplus of capacity in the region,” according to the announcement.
The auction, now in its 12th year, closed with commitments of 34,828 megawatts of regional generation for 2021-2022, exceeding ISO New England’s target for the auction by 1,103 megawatts.
“The forward capacity market is designed to ensure resource adequacy – that there are enough resources in the right places to meet peak demand,” said Robert Ethier, vice president of market operations at ISO New England. “This auction procured sufficient resources at a competitive price.”
The six-state region is divided into three regulatory zones. Rhode Island is part of the Southeastern New England zone, which includes southeastern Massachusetts, the greater Boston area and northern Massachusetts.
The auction helps inform future electricity prices and what demand for a specific zone might look like three years in advance. The latter has become a focal point in the debate over whether to allow Invenergy Thermal Development LLC to build a power plant in Burrillville.
The company is seeking permission from Rhode Island regulators to develop the controversial 1,000-megawatt gas-fired power plant, which has yielded fierce pushback from environmentalists and local and state officials.
Project opponents argue the power plant isn’t needed and point to the forward-looking capacity auction as proof. Two years ago, Invenergy successfully sold about half of its generating capacity, but has since failed to sell the rest and was disqualified from participating this year.
Invenergy officials last year said ISO New England’s decision was due to ongoing delays in the permitting process. The project was first proposed in 2015.
“The results of [the auction] are all good news for the opponents of Invenergy,” wrote Jerry Elmer, an attorney of the Conservation Law Foundation, and opponent of the project. “All of this is further confirmation of the degree that Invenergy is not needed.”
ISO New England, however, has raised concerns about fuel security in future years, according to a report it released in January. The report cites – among other things – potential vulnerability by 2024 because of retiring generators with stored fuels.
“The results aren’t a prediction, but they do shine a light on the potential reliability consequences of retirements of generators with stored fuels and the significant of liquefied natural gas, imports, renewables and oil inventories at dual-fuel power plants,” said Gordon van Welie, ISO New England CEO.
The overarching issues will undoubtedly come into question when the R.I. Facility Siting Board – responsible for deciding whether to permit the Burrillville power plant – hears final arguments. The hearings could begin in July but have been repeatedly delayed in the past.