I’m going to hit you with a lot of jargon in this piece, but I hope to explain as I go:
On September 20, in the midst of the Energy Facility Siting Board (EFSB) hearings to determine the fate of Invenergy‘s $1 billion fracked gas and diesel oil burning power plant aimed at the pristine forests of northwest Rhode Island, Invenergy dropped a bombshell: For the first time in its 22 year history, ISO-New England cancelled a Capacity Supply Obligation (CSO). Specifically, it cancelled Invenergy’s CSO for Turbine 1 of it’s proposed power plant.
A little over a week later ISO New England did what everyone expected them to do and disallowed Invenergy proposed second turbine from participating in Forward Capacity Auction (FCA) 13.
The way energy works in Rhode Island is that ISO New England, a non-profit that manages New England’s electrical grid, holds annual Forward Capacity Auctions. FCA 13, to be conducted on February 4, 2019, will determine the suppliers and prices of electricity in New England for the period from June 1, 2022 to May 31, 2023.
About three years ago, when they announced that they wanted to build a two turbine power plant in Burrillville, Invenergy began to bid into these auctions, with the expectation that they would have a functioning power plant when it came time to deliver. Due to delays, Invenergy does not have a power plant, so Invenergy sold their commitments (CSOs) – at a profit.
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It is estimated that Invenergy made about $22 million in profit by selling their CSOs and that they were on track to make an additional $20 million this year, until ISO New England pulled the plug on this scheme by cancelling the CSO.
Without a CSO, the very reason for Invenergy’s power plant to exist goes away. If the plant is not needed to satisfy New England’s electrical needs, then why build it? In fact, the question of need is central to the deliberations of the EFSB.
Invenergy understands the question of need very well. On August 18, 2016 the company filed a brief (see here) that declared that the, “competitive market will determine whether [the proposed power plant] is necessary to meet the needs of the region.”
“ISO-New England evaluates the market and sets prices that maintain system reliability while encouraging new efficient generation in the zones where needed,” writes Invenergy in their brief. With the cancellation of the CSO for Turbine 1 and Turbine 2 being disallowed in the upcoming auction, it looks like the competitive market has spoken.
Conservation Law Foundation (CLF), which is battling Invenergy at the EFSB, has filed a motion to bring Invenergy’s filing to the attention of the board. CLF also motioned the board to admit the Qualification Determination Notification (QDN) for Forward Capacity Auction 13 (FCA-13), which was issued by ISO New England when they disallowed Invenergy’s Turbine 2. The QDN is the document from ISO New England that will outline the reasons for the disqualification of Turbine 2.
The QDN document is not reviewable by the public, ostensibly because it contains information of a confidential nature, “trade secrets” and information Invenergy may not want its competition to know about.
Jerry Elmer, Senior Attorney at CLF, characterizes the QDN as first, “further evidence that the electricity to be produced by Invenergy is not wanted and not needed by the ISO” and second, “the QDN provides evidence of the degree to which Invenergy has misstated facts to the EFSB, ISO New England, and the public.”
Elmer has long made the case that Invenergy has been dishonest with the public, the media and the EFSB about its proposed power plant.
“And even if a power plant were needed, which it is not, this would not be the company to build the plant because you can’t give a permit to a company that can’t be honest with the ISO, with the EFSB, and with the public,” said Elmer during his opening statement before the EFSB on April 26, 2018.
Since it was revealed that ISO New England cancelled Invenergy’s CSO, the EFSB hearings have once again been delayed, most likely until after Thanksgiving. In the meantime, though, all parties will be before the EFSB on Wednesday, October 31 to hear Burrillville’s pending motion to reject the Rhode Island Public utilities Commission (PUC) Advisory Opinion. (See here)
Attorney Elmer explains:
“Burrillville’s Motion is simple and logical: the PUC Advisory Opinion, which opines that the Invenergy power plant is needed, was based largely on the fact that Invenergy held a CSO from the ISO. But that is no longer true. Since the main basis of the PUC Advisory Opinion is now invalid, Burrillville argues that the Advisory Opinion should be rejected. The Energy Facility Siting Act (EFSA), which created the EFSB, gives the EFSB the power to accept, reject, or modify any Advisory Opinion. Burrillville’s motion asks the EFSB to reject the PUC Advisory Opinion (saying that the plant is needed) because the Advisory Opinion is badly outdated and no longer valid.
“Invenergy is fighting hard against Burrillville’s motion – for obvious reasons. If the EFSB grants Burrillville’s motion, that will be another significant nail in Invenergy’s coffin. In the past, Invenergy’s two strongest arguments in favor of the plant were: (a) that it had a CSO; and (b) that it had a favorable PUC Advisory Opinion. The CSO is already gone; if the PUC Advisory Opinion is rejected, Invenergy will be further harmed.”
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