The pending closure of the giant Mystic power plant is a headache for the people charged with keeping electricity flowing in Greater Boston. But for power line developers, it’s a business opportunity.
ISO New England, which oversees the region’s power grid, on Thursday said that eight developers submitted a total of 36 transmission proposals in a contest unprecedented in New England history. It boils down to this: Who can offer the best way to pick up the slack once Mystic goes away?
It’s a pressing question for anyone in Greater Boston who wants the lights to stay on. Presumably, that’s all of us. The Mystic plant — on Boston’s doorstep, just over the Mystic River in Everett — primarily uses natural gas to generate enough electricity for some two million homes. No other power plant in Massachusetts comes close to matching that output.
However, the plant’s owner, Chicago-based Exelon, says Mystic won’t be profitable without additional subsidies from ratepayers. In response, ISO New England has approved a substantial incentive, worth about $200 million annually for two years, to keep the turbines humming. But that contract runs out in mid-2024, and ISO executives wouldn’t mind a less-expensive alternative.
They know another massive power plant isn’t going up in Greater Boston anytime soon. So ISO is betting on improving transmission in the region instead to keep the juice flowing. Thus, a contest. Let the market decide: The winning bidder gets ratepayer subsidies from across New England to pay for the project.
The entries were due at the end of the day Wednesday. ISO New England declined to divulge much about the submissions: the names of the bidders, for example, specifics about their projects, even when it will make this information public.
But the region’s main electric utilities, National Grid and Eversource, released information about their submissions to the ISO for low-cost alternatives to Mystic. Each submitted four transmission proposals, with price tags from $48 million to $120 million. Eversource transmission president Bill Quinlan says the annual cost to ratepayers for these projects, including maintenance and operations, ranges from $7 million to $20 million — far below the cost of keeping Mystic online.
That’s short money in the world of energy infrastructure.
Executives at the two utilities say their proposals can be completed without a major new power line or the political headaches that usually accompany such projects. Instead, the proposals rely on upgrades at substations, on the low end, as well as new transmission lines along existing rights of way on the high end.
Meanwhile, the power line developer Anbaric submitted two bids involving its plan for an underwater line between the Mystic site and the shuttered Pilgrim nuclear plant in Plymouth. The company declined to provide pricing details before the bids are made public.
One benefit to using the site of the old nuke plant: It’s a good place to soak up the electricity from offshore wind farms south of Martha’s Vineyard — if and when they finally get built — and channel that power directly to the Boston area. The first major offshore project, Vineyard Wind, is in a holding pattern due to federal permitting delays. (Rather than plugging in at the end of 2021, its backers are now shooting for 2023, at the earliest.)
There’s also speculation that another energy company, NextEra, may revive its SeaLink proposal to move juice into Greater Boston from the company’s nuclear power plant in Seabrook, N.H. (A NextEra executive couldn’t be reached for comment.)
Then there’s this twist: Maybe Mystic won’t close, after all.
An Exelon spokesman issued a statement on Thursday saying any consideration of cost-effective ways to ensure grid reliability should include “preserving existing resources.” Read: the Mystic plant. The spokesman also said it’s premature to assume any transmission project would be built on time or be more cost-effective than Mystic, given the history of power line construction delays in New England.
By 2024, Exelon expects to have just two natural gas units running at Mystic, with fuel coming from its liquefied natural gas terminal next door. Exelon’s statement indicates it’s open to keeping the two units, dubbed Mystic 8 and 9, going beyond spring 2024 if ISO provides another ratepayer-funded system to properly compensate for the plant’s benefits to the grid.
The potential loss of Mystic has vexed ISO executives for years. On days of particularly high electricity demand, the power plant often plays a key role for all of New England. Nowhere is that more true than in Greater Boston. Ensuring the grid’s reliability is ISO’s main mission. But no one said keeping the lights on around here is easy — or cheap, for that matter.