Dive Brief:

• ISO-New England has asked federal regulators to approve the cancellation of a capacity supply obligation (CSO), a key contract underpinning ​Invenergy's plans to develop the 900 MW Clear River Energy Center in Burrillville, Rhode Island.
• Opponents of the project have for years questioned whether there is a need for the new gas-fired generation. The grid operator's letter to the Federal Energy Regulatory Commission (FERC) says it does not believe the facility can be completed in time to deliver the promised power.
• The Conservation Law Foundation (CLF) immediately celebrated the unexpected announcement, calling it "a major setback" which proves the $1 billion facility is not needed. Project officials say they remain committed to building the plant.

Dive Insight:

The Clear River Energy Center was controversial as soon as it was proposed, with opponents pointing to the environmental impact of a plant burning fracked gas and questioning who would actually use the power.

Despite the debate, development has continued and on Thursday Rhode Island's Energy Facilities Siting Board (EFSB) heard testimony about the plant's possible emissions.

During the hearing Invenergy lawyers revealed ISO-New England has requested to cancel the plant's capacity obligations.

The original commercial operation date for the project was June 2019, and ISO-NE granted Clear River Unit 1 a CSO in early 2016, for the June 1, 2019 to May 31, 2020 Capacity Commitment Period.

Since then, with the plant delayed, Invenergy has covered the Clear River capacity auction for the 2019-2020 and 2020-2021 commitment periods.

Because Invenergy covered the CSO for two periods, and because of the delays in project development, ISO-NE says it now has authority, with FERC approval, to cancel the capacity obligation.

"Invenergy has not made sufficient progress to achieve Clear River Unit 1's critical path schedule milestones, and the commercial operation date for Clear River Unit 1 is more than two years beyond June 1, 2019, which is the start of the Capacity Commitment Period in which the resource first obtained a CSO," the grid operator told FERC in its request to cancel the contract.

"Today's filing is proof positive of what CLF has argued from day one: Invenergy's plant is simply not needed," Jerry Elmer, senior attorney at CLF, said in a statement. "It's time for Invenergy to admit defeat and withdraw its permit application."

The company disagrees, however, and issued a statement saying it would continue with the project with or without the capacity deal with the ISO.

Invenergy in a statement said it will build the Clear River Energy Center "as an independent supplier of electricity to the competitive wholesale market, rather than under the long-term capacity supply agreement requiring delivery by 2021 as previously planned."

Despite a longer-than-anticipated permitting process, project officials say they remain certain Clear River is the best solution for Rhode Island, where customers "already pay some of the highest power prices in the nation," Invenergy Vice President of Thermal Development Daniel Ewan said in a statement.

"With record power demand this summer and the projected retirement of 'at-risk' power plants in New England on the horizon, the need for the Clear River Energy Center is unmistakable."