Opinion

Opinion | Paul Stockton

New England must address fuel security risks

Everett MA (Apr 14, 03) - The Mystic Power Plant, owned by Exelon Corporation, viewed from Charlestown MA. (PHOTO BY SARAH BREZINSKY) Library Tag 04152003 Business Library Tag 12202005 Business
Sara Brezinsky/The Boston Globe
The Mystic power plant in Everett, owned by Exelon Corporation.

Our safety, quality of life, and national defense all depend on having a resilient electric grid. We need that resilience against the severe “bomb cyclone” storms predicted to come. We also need to ensure that hospitals, water systems, and military bases have the power they need, even if Russia or other potential adversaries attack our energy systems.

Yet in New England, there are warning signs that electric resilience, particularly during winter months, is at risk unless we address fuel security challenges to make the grid more resilient. These challenges stem from our overreliance on natural gas pipelines with limited winter capacity to supply customers with heat for their homes and businesses. This leaves insufficient gas pipeline capacity to fuel New England’s fleet of natural gas-fired power plants, built over the past 30 years, during cold winter conditions.

New natural gas pipelines in New England would be difficult to site and finance, and would take a long time to approve and build. Even if that could eventually be accomplished, it would deepen our reliance on pipeline gas, with an associated vulnerability from natural disasters and national security risks.

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When I served as assistant secretary of defense for Homeland Defense, I focused on threats to energy infrastructure that could jeopardize US security. One such threat is rapidly increasing: the risk that adversaries will launch cyberattacks against the control systems and other mechanisms essential to sustain the flow of gas. We are not immune from an attack by an adversary or a natural disaster here that could cause significant damage to gas pipeline infrastructure and have profound impacts on the economy, national security, and our health and safety.

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To its credit, the region’s electric grid manager, ISO-New England, is actively examining the region’s winter fuel security challenges and has alerted stakeholders about the growing problem. In January, it published a report on fuel security that spells out the vulnerabilities of the electric grid as nuclear, coal, and oil plants are taken out of service and no new gas pipelines are built.

ISO-NE’s analysis depicts an electric grid that by 2024 will be increasingly vulnerable, even with additional renewable energy projects coming online. In fact, New England could face rolling blackouts during some of the coldest winter weather under some scenarios ISO-NE studied, one of which was the loss of the liquefied natural gas-fueled units at Mystic Generating Station in Everett. This would pose a real threat to local residents’ health and well-being, not to mention the economic impacts.

The owner of the Mystic power plant, Exelon Generation, announced in March that it would retire the power plant in June 2022 because it has become uneconomical. Existing electric markets do not appropriately compensate Mystic for the fuel security benefits it provides.

Mystic is the largest electric generating station in Massachusetts and provides electricity to Greater Boston and beyond. It is unique because its largest units do not rely on gas supplied by pipelines, but rather receive gas directly from the LNG terminal located nearby. Exelon Generation is purchasing the terminal to ensure that its units can continue to be fueled to operate and provide power until the Mystic units are retired.

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Based on the findings of its fuel security study, ISO-NE has determined that closure of Mystic’s LNG-fueled units would pose an unacceptable fuel security risk to New England. Accordingly, ISO-NE filed with the Federal Energy Regulatory Commission a request for authority to keep those Mystic units running for an additional two years, by allowing the plant owner to recover costs of operating the units and the LNG terminal.

Exelon said the cost to the average residential electric customer from this agreement would be less than $1 per month. This additional cost will be well worth it. Allowing our grid to fail would be much costlier.

Given identified fuel security and resilience challenges confronting New England’s electric grid without Mystic’s LNG-fueled units, FERC should take swift action to support ISO-NE’s request. Delay is not a viable option. Retaining the Mystic units gives ISO-NE an ability to respond to fuel security challenges, helping make New England’s electric grid more resilient and less dependent on insufficient natural gas pipeline capacity.

A resilient electric grid is expected by customers, and must be supplied by diverse energy sources so that we don’t place too many eggs in one basket. New Englanders need an electric grid they can depend on to keep their lights on, their furnaces and air conditioners running, and their economy growing.

Paul Stockton is managing director of the economic and security advisory firm Sonecon LLC. His clients include Exelon. From 2009 to 2013, he served as assistant secretary of defense for Homeland Defense and Americas’ Security Affairs and is currently a member of the Homeland Security Advisory Council.