Region set to see major power shortage despite new power plants

THE CLOSING OF THE BRAYTON POINT power plant by owner Energy Capital Partners is part of a projected shortfall of electricity generating capacity that ISO-New England expects will increase prices in New England for power consumers.  / COURTESY DOMINION RESOURCES INC.
THE RETIRED BRAYTON POINT POWER STATION is being remodeled as a hub for the emerging offshore wind energy industry. / COURTESY DOMINION RESOURCES INC.

PROVIDENCE – New power plants will replace closing power plants, but energy supply is still predicted to fall short in Rhode Island, likely costing ratepayers more in the future.

Three new power plants – two in Connecticut and one in southeastern Massachusetts – will be built to help fulfill a projected capacity shortage in New England. The plants will add 1,060 megawatts of power to the six-state region energy load by 2018, according to grid operator ISO-New England Inc., which held its yearly power capacity auction this week.

The capacity shortage is largely attributable to closed, or closing, power plants. ISO calculates about 10 percent – 3,400 megawatts – of the region’s power generation will be removed from the grid by 2017, including the 1,500-megawatt Brayton Point coal-fired plant in Somerset, Mass., which is scheduled to close in 2017. The 600-megawatt Vermont Yankee nuclear power plant, in Vernon, Vt., retired from the grid in December.

ISO, which plans power capacity three years in advance, holds an auction each year in order to ensure there is enough capacity for future markets. Private investors this year won bids to build three new power plants. The first, a 725-megawatt dual-fuel (oil and natural gas) power plant, is slated for Oxford, Conn.

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The second will be comprised of two 45-megawatt natural gas turbine plants in Wallingford, Conn.

The third is a 190-megawatt natural gas turbine (peaking) power plant in Medway, Mass.

An ISO spokeswoman said she couldn’t disclose any more information about the investors.

The auction also drew 376 megawatts of new “demand-side resources,” which comes from businesses who agree to shutoff power when, and if, there’s a need elsewhere, according to a report released by ISO.

Together, the added supply will cover most of the lost resources, but with new generation come new costs. This year’s auction yielded a 2018-19 capacity market at about $4 billion, an increase of $1 billion from a year earlier, according to ISO.

The future increased costs will likely be passed along to the region’s ratepayers.

Rhode Island and southeastern Massachusetts ratepayers will see the largest increase because of constrained infrastructure and lack of local resources.

Even before the auction began, supply in the two-state zone fell short, which triggered an automatic pricing mechanism setting rates for the predicted 353 megawatts shortfall at the highest bidding rate of $17.73 per kilowatt month.

The rate, however, will only be set for the shortage of 353 megawatts, while the rest – 6,888 megawatts – will be set at $11.08 per kilowatt month.

The pricing system is set up as an incentive for new investment, an ISO spokeswoman said.

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