A proposal for a natural gas power plant in Killingly, which has drawn the ire of environmental activists for six years, was dealt a major setback after the regional electric grid operator — ISO-New England — said it doesn’t want Killingly to be part of its future plans.
In a Nov. 4 letter to the Federal Energy Regulatory Commission, the independent system operator that runs the New England grid — known as ISO-New England — has requested permission to cut Killingly from future power considerations. ISO-NE set up a battle over the proposed Killingly plant with its decision to include it in future power plans, known as Capacity Supply Obligation (CSO). Killingly is owned by NTE Energy.
The letter to FERC says, in part, that after consultation with NTE Energy, ISO-NE is “exercising its right to seek to terminate Killingly’s CSO.” If accepted by FERC, ISO-NE will “draw down the financial assurance” NTE Energy was required to provide to back up their commitment to the project, and ISO-NE would remove Killingly’s qualified capacity from future plans. ISO-NE asked FERC to issue an order within 60 days from the date of the letter and set a date of Jan. 3, 2022 for the termination, in advance of the next time ISO-NE is scheduled to pick future generation facilities in February.
Without a commitment from ISO-NE to use the 650 megawatts the plant would have supplied, building the Killingly Energy Center would likely be a less economically viable project. Whether NTE would simply scuttle the project at that point is unknown. NTE did not reply Friday morning to a request for comment.
Opponents of the Killingly plant were heartened by the news Friday.
“This is hugely welcome news,” said Samantha Dynowski, state director of the Connecticut chapter of the Sierra Club, one of several groups that have relentlessly fought the Killingly plant for years. “Without a capacity supply obligation, I don’t think we’re going to see this get built.”
Kate Donnelly, of the group No More Dirty Power, was equally optimistic.
“I think that we noticed that the signs were building against the plant,” she said. The financing wasn’t secured and certain land areas hadn’t been secured, but most of the final permits were in place, except for one for a natural gas pipeline Eversource needed to build to connect to the plant.
“We think this really is the beginning of the end,” Donnelly said.
FERC still needs to approve the request, which is predicated on ISO-NE’s existing commitment to the power having timed out.
In a statement, an ISO-NE spokesman explained its action this way: “Any new resource acquiring a capacity supply obligation is required to meet several development milestones, including, among other things, financing, permitting, major equipment orders, and commercial operation. Developers who face delays in meeting milestone deadlines have the ability to find other resources to cover their obligations for up to two years. After these two years, if a project is still unable to meet their milestone deadlines, the ISO has the right to seek to terminate of the resource’s obligation through a filing with the Commission. The ISO is exercising this right with regard to the Killingly Energy Center.”
ISO-NE had long contended that just because it had committed to Killingly didn’t mean it would necessarily be built – noting that many projects it commits to are abandoned.
But it noted that NTE would have the option to re-enter Killingly in the capacity market at a later time but would need to begin the qualification process for new resources again.
Climate change advocates weren’t the only ones who objected to the plant. More recently, state officials have argued that another fossil fuel plant would be contrary to the state’s mandate for a 100% zero-carbon electric sector by 2040 and its other climate change reduction goals.
In January, Gov. Ned Lamont said outright: “I don’t want to build Killingly.”
On Friday he said: “If ISO said we need Killingly in order to keep the lights on, I’m going to keep the lights on. But I wanted to do everything I could as a governor over the last two and a half years and make sure we didn’t need the last natural gas-fired plant in New England in order to keep the lights on.”
Katie Dykes, the commissioner of the Department of Energy and Environmental Protection, has long used the prospect of Killingly as an example of why the New England grid operation needs to change. She has repeatedly said it ignores the climate change mandates and goals of the individual states.
“I believe that we have to change the system that brought us this plant in the first place. We’re doing that by working with other states to reform the ISO-New England,” she said in January. “That is the place we can have the greatest and most lasting impact.”
On Friday, she said there had been questions around the plant’s viability for quite a while. “The latest communication from the ISO indicates that it also thinks this plant is not viable,” she said.