Dive Brief:
- Power generators in New England are asking the Federal Energy Regulatory Commission to prevent ISO New England from entering into an unusual contract to keep the 1,500 MW, coal-fired Brayton Point power plant in Somerset, Massachusetts operational.
- Keeping the plant operating through an “out-of-market” contract will skew New England's forward capacity market and cost existing and new generators about $500 million, according to a complaint filed by the New England Power Generators Association (NEPGA).
- If FERC cannot make a rapid decision, NEPGA wants the federal agency to delay ISO-NE's February capacity auction.
Dive Insight:
New England's capacity market is designed “to maintain system reliability by sending economic price signals needed to encourage entry of new resources, when needed, and to discourage the premature exit of otherwise economic existing resources,” NEPGA said. “A capacity market’s ability to fulfill that core purpose is threatened when prices are artificially suppressed by either the entry of uneconomic new resources or the non-exit of uneconomic existing resources.”
ISO-NE wants to keep the Brayton plant operating to maintain reliability, but the plant's owners want to shut down the facility because they don't see any economic reason to keep it running. It appears that New England's capacity market is not working properly if the grid regulator has to intervene to keep the plant online.
