If granted, Invenergy will seek to sell its permit or sit on it until market conditions make the plant needed, says expert

Glenn Walker
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Burrillville’s expert witness says plant is not needed

Under cross-examination from Conservation Law Foundation (CLF) Senior Attorney Jerry Elmer, Burrillville’s expert witness on the question of whether or not Invenergy‘s proposed power plant is needed, Glenn Walker, revealed information that could significantly harm the chances that the company will receive a permit to build. Invenergy, as we know, is proposing to build a $1 billion fracked gas and diesel oil burning power plant amidst the pristine forests of northwest Rhode Island.

To put the following into context: The Energy Facilities Siting Board (EFSB) which is the governmental body responsible for deciding on the permit, is not like the court system most of us are used to seeing on television. Testimony is pre-filed, in written form, and made available to all parties involved. Lawyers on both sides of the issue are then given the opportunity to cross-examine the witnesses.

Central to the issue is one of need: Is the proposed Invenergy power plant necessary to keep the lights on in the New England region in the short, medium and long term? Burrillville’s expert witness, Scott Walker, says it is not needed. One piece of evidence is the easy way Invenergy sold off its Capacity Supply Obligation (CSO).

Let me explain.

Every year ISO New England, the non-profit body that regulates electrical power transmission in New England, hold what is called a Forward Capacity Auction (FCA). These auctions determine who will supply power to the grid and at what price. Power plant owners bid into this auction and are obligated to provide power three years in the future at the price agreed to. The agreements are called Capacity Supply Obligations.

Invenergy entered the FCA and received a CSO for only one of its two proposed turbines. Even though Invenergy didn’t have a power plant in existence yet, they entered the market so that when the power plant was completed, they would have an immediate income stream for the power they would be able to generate. Unfortunately for Invenergy, due to delays entirely of company’s own making, the power plant has yet to complete the hearing process or put a shovel in the ground. Now, three years later, Invenergy cannot satisfy its obligation.

That’s no problem for Invenergy though, and it actually might be a blessing. Every year ISO New England also hold what is called an Annual Reconfiguration Auction (ARA). During these auctions, companies are able to sell their obligations to other power generators.

Walker pointed out in his testimony that Invenergy easily sold off it’s CSO in subsequent reconfiguration auctions. Walker maintains that selling off the CSO was easy, because there is an overabundance of energy in the system. In other words, there more than enough power generators eager to sell power into the grid.

Not only did Invenergy sell off its obligation to produce energy for the power grid easily, the company made a profit of over $26 million doing so! This is without having a power plant or producing so much as a battery’s worth of electricity. How is this possible? Walker explains in the videos below:

“The Invenergy plant clearly wasn’t needed because they were able to close out that supply obligation that they had received for FCAs 10 and 11,” said Walker. “Had the alternative energy not been available, they likely would not be able to close out of those obligations…”

So if the plant is not needed,

In a recent Providence Journal editorial, Ed Achorn asks, “Why would [Invenergy] put $1 billion in private capital at risk if there was no market for the energy the plant would produce?” Achorn answered his own question by suggesting that we should trust that a company like Invenergy knows the market well enough to rest assured that its energy is needed, but Walker, during his cross-examination, suggests another, more likely scenario.

Walker, in his written testimony, suggests that Invenergy wants the permit for the proposed power plant so that they can sell it to another developer or to sit on it until market conditions become more favorable and the plant will become profitable to build.

“At this point I think [Invenergy] has a situation where the plant is in permitting, the market doesn’t need the plant, and they’re looking to decide, is there a path forward, what might that path forward look like… One option would be to just move forward, try to permit the plant and wait for the market to catch up, if you will,” said Walker.

This happens a lot, it seems.

“We’ve seen this repeatedly in the New England market,” said Walker, and he provided some examples.

How can we prevent Invenergy from reselling or sitting on a permit to build a power plant?

“The denial of a permit ensures that we don’t have a phantom or a ghost plant in the Burrillville corner of Rhode Island,” said Walker.

Another issue that points towards the fact that Invenergy’s proposed power plant is ISO New England’s cancellation of Invenergy’s sole remaining CSO that the company still held after making its $26 million in profits. The Federal Energy Regulatory Commission (FERC) upheld the cancellation of the CSO on appeal.

In other cases, ISO New England has worked with companies to help get a proposed power plant online in an area where a resource was needed for system reliability, said Walker. ISO did not pursue this path, but instead cancelled the CSO.

Walker provided examples of the ISO doing this in other cases, but in the case of Invenergy’s proposed power plant, the ISO took the unprecedented step of cancelling the CSO.

When proponents of the power plant say the plant is needed, they often talk about transmission constraints, the inability to transmit energy across great distances in the quantities needed.

Walker explains how this works, and why this is wrong, in the clip below:

Though this is really just an aside, EFSB Boardmember Janet Coit raises a question about the the supply of natural gas in light of the recent disaster on Aquidneck Island which forced thousands of people out of their homes in Portsmouth, Middletown and Newport.

In his cross-examination of Walker, which began in the afternoon and will continue on Thursday, Invenrgy’s attorney Michael Blazer tried to poke holes in Walker’s testimony, without much success. Blazer began his cross by saying to Walker, either sarcastically or not, “You clearly know what you’re talking about.”

[Edit: An earlier version of this piece incorrectly cited Glenn Walker as Scott Walker. This has been corrected, with apologies.]


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About Steve Ahlquist 1027 Articles
Steve Ahlquist is a frontline reporter in Rhode Island. He has covered human rights, social justice, progressive politics and environmental news for half a decade.Uprise RI is his new project, and he's doing all he can to make it essential reading.atomicsteve@gmail.com