Millions of people in New England may face a higher risk of heat and power issues during the winter if a plan to close down a natural gas terminal goes through, according to a federal agency.
The Federal Energy Regulatory Commission (FERC) and the private North American Electric Reliability Corporation (NERC) watchdog in a statement this week there could be “serious” problems with “certain local gas distribution systems’ ability to ensure reliability and affordability in the region” without the Everett Marine Terminal.
Constellation Energy, a U.S. energy firm, owns the 1,413-megawatt Mystic natural gas-fired power plant and the Everett liquefied natural gas plant. It is expecting to shut down the plant in May 2024. The company provides fuel to its Mystic power plant and to gas providers in New England using the liquid natural gas imported at Everett.
“Although there was evidence that the retirement of Everett would be ‘manageable’ for the electric system, at least in the near-term, given anticipated new resource deployments and transmission development, minimal load growth, limited resource retirements, and increased reliance on non-natural gas generators, the evidence indicates that, should those expectations not materialize as anticipated, ensuring reliability and affordability could become challenging in the face of a significant winter event,” FERC and NERC said in a statement.
The two organizations said that they will seek to push all parties involved to “keep reliability and affordability at the center” of negotiations on the plant’s future. “With respect to the natural gas system, we recognize that the reliability needs turn, at least for the foreseeable future, largely on facilities subject to the New England states’ jurisdiction.”
The regulators noted evidence indicating that Everett’s retirement would be “manageable” for the electric system, at least in the near-term. But if these expectations did “not materialize as anticipated,” it may become difficult to maintain affordability and reliability in the event of a major winter event, they said.
In September, FERC and NERC presented findings and recommendations of their joint inquiry into the power outages and rolling blackouts during winter storm Elliott in December 2022. The inquiry found that the sub-freezing temperatures and extreme cold weather caused unplanned electric generation supply losses exceeding 90,000 megawatts.
“Although much of the attention has focused on the electric outages, the storm’s effects on the natural gas system, and the local gas distribution system in particular, cannot be overlooked,” FERC and NERC warned.
The storm lowered flows of natural gas into the pipelines at a time when shippers were requesting increased volumes of natural gas, dramatically lowering line pressures and putting stress on the natural gas system.
Constellation, the terminal’s operator, has not yet confirmed whether it will shut down the natural gas terminal next year. In 2020, the firm said that because of an order issued by a grid operator, it doesn’t see a “path to continue” the operation of the power plant
“We have not made a decision to retire Exelon Generation’s nearby Everett Liquefied Natural Gas Facility,” the firm said at the time. “We are continuing to evaluate Everett’s future and are hopeful that it will continue to operate following Mystic’s retirement.”
Critics say that the reason for the closures is due to politics.
