1/ We can’t seem to resist turning our attention, time and again, to Mystic Generating Station. It has become something of a Rorschach test: everyone looks at it and uses it to offer their own prediction or prescription about the future of grid reliability here in New England.
3/ Picking up on @isonewengland Pres. & CEO Gordon van Welie’s statement to the @AP this week that "[w]e were one large contingency away from rolling blackouts" this past winter, the piece casts Mystic as an indispensable generating resource b/c it has a dedicated source of fuel.
4/ Unlike other natural gas generating plants here in NE, which compete in winter with homes using natural gas for heating, Mystic is fueled by the adjacent Distrigas LNG terminal. Mystic, today’s piece suggests, is thus a linchpin supporting grid reliability here in NE.
5/ Except that we know that it’s not.
This past Labor Day Mystic went offline unexpectedly, forcing @isonewengland to implement emergency measures to stabilize the grid, and sending wholesale electricity prices as high as $2,600/MW.
Q: Why did Mystic suddenly drop offline?
This past Labor Day Mystic went offline unexpectedly, forcing @isonewengland to implement emergency measures to stabilize the grid, and sending wholesale electricity prices as high as $2,600/MW.
Q: Why did Mystic suddenly drop offline?
6/ A: It was felled by a power line fault at the Distrigas terminal. The natural gas that supplies Mystic sat just a few hundred yards away, but b/c of a power outage at Distrigas it couldn’t be pumped over to Mystic, and Mystic stopped making electricity. bit.ly/2QQBe5g
7/ In short, having its own dedicated source of fuel didn’t make Mystic immune to failure, & Mystic’s failure threw the grid into chaos last Labor Day. And this was in summer mind you, before the heating season, when there was ample gas to fuel the region’s gas generating plants.
8/ As @jonchesto noted, Mystic’s owner, @Exelon, is threatening to close Mystic in 2022 b/c it’s “no longer economic to run.” @Exelon, though, has said it will keep Mystic open if it receives special payments that value its reliability b/c it has a dedicated source of fuel.
Ha!
Ha!
9/ Moreover, @Exelon has said it will also shut down its adjacent Distrigas LNG terminal unless Mystic receives the special payments b/c if Distrigas loses its largest customer—Mystic—it too will be financially unsustainable.
10/ But how is it that Mystic “is no longer economic to run”? The fact is, Mystic has not been economic to run for years. The subsidy @Exelon wants now to keep Mystic open—the special payments valuing the plant’s (now questionable) reliability—are just a substitute for ...
11/ ... a subsidy that Mystic has received for years from the City of Everett. That subsidy came in the form of a tax increment finance (TIF) agreement that allowed Mystic’s owner’s to make lower, negotiated payments in lieu of paying assessed real estate taxes on the plant.
12/ Everett, however, has long argued that it was deceived by the plant’s original owners about the plant’s value—at the time the TIF agreement was signed the plant’s then owner estimated its value to be $600M, but the plant ultimately cost $1.3B to build. bit.ly/2q2hcbz
13/ Everett, believing that it’s due double the amount specified in the TIF agreement, has sued to have the agreement invalidated. In any case, the TIF agreement is due to expire in 2020, and Exelon will almost certainly be required by Everett to pay real estate taxes ...
14/ ... assessed on the full value of the plant.
That is, the cost of operating Mystic is about to increase significantly, and for reasons that are unrelated to inputs like fuel & labor costs, or the shifting $/MW market prices it earns for the electry it produces.
That is, the cost of operating Mystic is about to increase significantly, and for reasons that are unrelated to inputs like fuel & labor costs, or the shifting $/MW market prices it earns for the electry it produces.
15/ If ISO-New England gets its wish, and Exelon is allowed to receive a special payment to keep Mystic afloat (which we’ll all pay out of our electricity bills), then let’s not deceive ourselves into believing that the charge is justified because Mystic is “reliable.”
16/ As we learned on Labor Day, Mystic is no more reliable than any other generating plant in New England, regardless of fuel type.
No, if we’re going to pay a special charge to Exelon to keep Mystic open, then let’s be candid & admit that we’re doing so because ...
No, if we’re going to pay a special charge to Exelon to keep Mystic open, then let’s be candid & admit that we’re doing so because ...
17/ ... we need Mystic’s capacity to produce 1700 MWs of electricity, even though it’s been a money-loser for years.
This is what passes for resource planning in NE currently, and it begs the question whether we can do better.
This is what passes for resource planning in NE currently, and it begs the question whether we can do better.
18/ One thing is abundantly clear though: New England is overly reliant on gas generation, & the regional grid is going to remain on the bubble —potentially unreliable—until we further diversify our generating mix.
And there’s my take on the Mystic Rorschach test.
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And there’s my take on the Mystic Rorschach test.
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