The Federal Energy Regulatory Commission on Tuesday approved Shell Energy North America’s planned purchase of a 596-MW, gas-fired combined-cycle power plant in Rhode Island.
Shell Energy North America, a subsidiary of Shell, expects to buy the Rhode Island State Energy Center in Johnston, Rhode Island, from investment funds managed by The Carlyle Group and from EGCO RISEC II, a subsidiary of Thailand-based Electricity Generating Public Co. Shell plans to close the deal this quarter.
The deal comes as ISO New England expects electricity use in its footprint to grow by 1.8% a year from 2024 to 2033, according to an annual 10-year forecast of capacity, energy, loads and transmission the grid operator released in May.
Shell buys electricity from the power plant under a tolling agreement that runs through this year, according to an application for the deal filed at FERC. The contract started in 2019, Shell said in an Oct. 22 press release announcing the deal.
“Shell has had a successful integrated gas and power business in the growing ISO New England market for over 20 years, and this acquisition secures valuable trading opportunities by guaranteeing SENA’s position in the market,” Huibert Vigeveno, Shell downstream, renewables & energy solutions director, said in the release. “Our strong understanding of this plant’s performance positions Shell to capitalise on its value within our existing trading portfolio.”
The power plant’s capacity cleared ISO-NE’s annual forward capacity auction for the current and upcoming delivery years and is committed to ISO-NE through May 31, 2028, except for a limited amount of excess winter capacity that may be offered into ISO-NE’s monthly reconfigurations for the months of October through May, Shell and the power plant’s owners told FERC.
The Rhode Island State Energy Center produced 3.6 million MWh in 2023, up from 3.3 million MWh the year before, according to the U.S. Energy Information Administration.
Shell also buys about 1,252 MW from unaffiliated third parties in ISO-NE’s footprint under contracts that end on March 31, according to the application. This includes Shell buying 490 MW from Montville Power and 762 MW from Middletown Power in Connecticut. In New England, Shell is also affiliated with a company that owns a 25-MW solar farm in Litchfield, Connecticut, according to the application.
Shell and the power plant’s owners said the transaction didn’t pose competitive or market power concerns in ISO-NE’s markets. FERC said the deal was “consistent” with the public interest.
Entergy Wholesale Commodities sold the Rhode Island State Energy Center to Carlyle Power Partners in December 2015 for a base price of about $490 million. The power plant has been operating since 2002, according to Shell.
When EGCO Group bought its 49% stake in the Rhode Island State Energy Center in March 2023, the company said the power plant, located near the load centers of Boston and Providence, is a key facility for providing grid stabilizing and energy services. “It also serves as a potential base for future energy transition initiatives, including the preparation for co-located battery energy storage systems and co-firing of hydrogen as fuel in its combustion turbine units in the future,” the company said.
