Footprint Power LLC, which is re-developing the oil- and coal-fired Salem Harbor power plant site with a new gas-fired facility, asked the Federal Energy Regulatory Commission on Nov. 28 for some relief related to power sales for the revamped facility.
Footprint requested a waiver of the capacity qualification and financial assurance deadlines in the ISO-NE Transmission, Markets and Services Tariff, Market Rule 1, to permit 674 MW of new capacity to participate in the Seventh Forward Capacity Auction (FCA 7). On Nov. 21, Footprint said it filed a motion to intervene and protest of ISO New England’s (ISO-NE) informational filing regarding the qualification of capacity resources to participate in FCA 7. In that protest, Footprint sought the same waivers of the qualification deadlines so that this new project can participate in FCA 7 at a FCA qualified capacity of 674 MW. “Out of an abundance of caution, Footprint now seeks the same relief via this separate request for waiver,” the company added.
Footprint is developing a new quick-start, gas-fired combined-cycle facility in the NEMA/Boston load pocket. Footprint said it is developing the only new “outside-the-fence” generator in the ISO-NE interconnection queue in the NEMA/Boston capacity zone and therefore the only large generator that can participate in FCA 7. It recently acquired the existing coal- and oil-fired Salem Harbor plant from Dominion Resources (NYSE: D) for the express purpose of demolishing that facility and addressing environmental conditions at the site to make way for a new, clean, efficient, quick-start natural gas-fired generating solution.
Footprint said it sought to qualify its capacity in FCA 7. It said it has met every qualification deadline and information request and has worked diligently with ISO-NE and the host transmission utility, New England Power d/b/a National Grid, to ensure that any transmission work necessary to interconnect the facility to the ISO-NE system could be completed by June 1, 2016. At the time that ISO-NE was required to issue its Qualification Determination Notices (QDN) on Sept. 28, however, Footprint, National Grid, and ISO-NE were still working through a technical analysis to ensure that the needed transmission upgrades could be in service by June 2016.
“With the results of that transmission analysis not yet complete, ISO-NE issued a QDN to Footprint that qualified only approximately 85% of the output of the Facility (570 MW of the Facility’s 674 MW winter rating),” Footprint noted. “Despite the QDN deadline, the parties continued to work together to complete the technical analysis needed to qualify the Facility as expeditiously as possible. Footprint now understands, through discussions with both National Grid and ISO-NE, that—after receipt of an updated Officer’s Statement from National Grid pursuant to Market Rule 1, Section III.184.108.40.206.3—ISO-NE has determined that the upgrades are reasonably expected to be in place prior to June 1, 2016. If the QDN were issued today, ISO-NE thus would qualify the full 674 MW of output of the Facility for participation in FCA 7. As a result, a waiver of the qualification deadlines now is necessary to permit the Facility to participate in FCA 7 at its full rating of 674 MW.”
Footprint pointed out that it has not sought “Out of Market” treatment in FCA 7 that would permit it to bid below the auction floor price and therefore negatively affect the auction price. It will either clear in the market because the NEMA/Boston load zone requires new generating capacity—thus fulfilling the purpose of the ISO-NE forward capacity market—or it will fail to clear because additional capacity will not be required in the NEMA/Boston load zone, the company said.
Footprint says not being able to sell all capacity endangers the project
“The failure to qualify the entire 674 MW output of the project in FCA 7 makes it uneconomic to develop the Facility and could lead to the perverse result of FCA 7 failing to procure capacity needed for reliability in the largest load pocket in New England in the first auction where new capacity may actually be needed,” Footprint added. “This could occur simply because, despite the best efforts and cooperation of the project sponsor, the local utility and ISO-NE, additional technical work needed to be completed—and actually has been completed—just days after the ISO-NE Information Filing and over 12 weeks prior to the auction.”
The existing Salem Harbor plant has been used for power generation since 1951. It has four separate units, which were owned and operated by a subsidiary of Dominion from 2005 until Aug. 3, 2012, when an affiliate of Footprint became the owner of the facility. Units 1 and 2, both coal-fired, were removed from service at the end of 2011. The two remaining units—one coal-fired and one oil-fired—will be shut down on June 1, 2014. Until that time, they have been determined by ISO-NE to be needed for reliability purposes in the Northeastern Massachusetts/Boston Capacity Zone. After Units 3 and 4 are shut down, Footprint will demolish the existing plant.
Footprint (through Footprint Salem Harbor) is proposing to construct its new facility on the northwest 16-acre portion of the 65-acre Salem Harbor site. The facility is planned to be in commercial operation on or before June 1, 2016, the start of the 2016-2017 Capacity Commitment Period for which FCA 7 is being conducted.
The proposed facility will include two state-of-the-art, efficient, low emission, quick-start natural gas turbine generators; two steam turbine generators; and two heat recovery steam generators, including pollution control equipment. The facility’s design will be unique in New England as it will have substantial quick start capability along with a state of the art heat rate of approximately 6,000 Btu/kWh when operating at full load, Footprint noted. Approximately half of the output of the facility will be available in 10 minutes, and the entire output of the facility will be available within one hour, providing ISO-NE with much needed quick-start units that will provide reliability service, as well as facilitate the integration of additional renewable resources onto the ISO-NE system.
Natural gas will be delivered to the facility via a new 16-inch pipeline lateral off the Algonquin Hubline interstate pipeline, to be owned and operated by a subsidiary of Spectra Energy.