It’s the end of the line for the proposed Killingly natural gas plant as far grid operator ISO-New England is concerned, at least for the immediate future.
Two rulings in the last two weeks, one by the Federal Energy Regulatory Commission and the other by the U.S. District Court of Appeals in Washington D.C., paved the way for the ISO to complete its recent annual auction that determines future power sources for use by the New England grid.
The auction results will not include the Killingly facility, as they have for the last several auctions.
It’s unclear whether Killingly’s owners, NTE, have additional recourse to force the ISO to include the plant — and, if they do, whether they would use it. The company did not respond to requests for information.
Also unclear is whether after six years of planning, NTE might abandon the project. Without a guaranteed market for its power, investors could be disinclined to back the plant, though NTE has said in the past that the plant’s financing is in place.
Killingly had become a cause celebre for environmental advocates who argued the region needed more renewable not fossil fuel energy. The ISO has argued natural gas generation improves the grid’s reliability. But in winter, when gas is needed for heat and the grid operator has to turn to dirtier oil and coal generation, environmental advocates have argued the use of natural gas makes the grid less reliable. That is being underscored right now as fossil fuel prices soar due to the war being waged by Russia in Ukraine.
Advocates, along with Gov. Ned Lamont and Department of Energy and Environmental Protection Commissioner Katie Dykes, have also argued that more non-renewable energy on the grid is counterproductive in terms of slowing climate change and that it could cause the state to miss any number of greenhouse gas emissions goals, including the governor’s executive order for a carbon-free grid by 2040. The legislature failed to make that order into a law last session, but it’s been refiled for this session.
The most recent turn of events began on Nov. 4 when the ISO asked permission from FERC to remove Killingly from the February auction because NTE had missed required deadlines that would ensure its development.
On Jan. 3, 2022, FERC approved the ISO’s request, saying: “Based on a review of the record, including the confidential information provided by ISO-NE and NTE, we find that the relevant condition for termination … has been met.”
NTE disagreed, saying at the time: “We are very disappointed and do not agree with FERC’s decision. The Killingly Energy Center is important for grid reliability, and we will continue to work to be the bridge for the region’s carbon-free future.”
NTE asked for a re-hearing by FERC and took the matter to court, which resulted in a ruling just days before the annual auction on Feb. 7, 2022, that temporarily stayed FERC’s decision removing the plant from consideration.
The ISO ran the auction as scheduled with and without Killingly but did not reveal the results to “protect the commercially-sensitive information that might otherwise be revealed as part of the auction finalization process.” They intend to release the results without Killingly this week.
That’s because on Feb. 23, FERC denied the NTE request for a rehearing and then on March 2, the appeals court dissolved the stay, after a request from the ISO to end it — all of which allows the ISO to complete the auction, but it doesn’t necessarily end the potential for building the plant.
While the state and especially Lamont have been blunt about not wanting Killingly, under the current system there’s really no way for the state to stop it. If all the criteria for permits are met, the state has to issue them. In fact, Killingly has almost all its permits.
For several years now, the ISO has had the plant in its future selections — which are made three years in advance. NTE could start over and re-enter a future auction.
Dykes has been waging a decade-long fight to get the ISO to change its rules for selecting power for the grid. And that effort is now facing a two-year delay in its implementation from a year from now to three years from now.
In the meantime, advocacy groups continue to push for policies that will allow the state to stop power plants it doesn’t want.
“The ISO-NE markets are moving on, and so should NTE. The time for building more gas power plants is past,” Melissa Birchard, senior regulatory attorney at Acadia Center.