By TIM FAULKNER/ecoRI News staff
The final phase of the Clear River Energy Center application process is set to go forward now that two key legal hurdles have been settled, at least for the moment.
On Jan. 26 the Federal Energy Regulatory Commission (FERC) ruled in favor of National Grid and ISO New England, which had asked the commission to ensure Invenergy follows standard practice under the Federal Power Act and pays for connecting the proposed Burrillville, R.I., fossil-fuel facility to the power grid. Invenergy wanted to perform the interconnection itself, but FERC also ruled that National Grid must manage the construction.
The decision was one of two related FERC lawsuits settled last week. On Jan. 24 Invenergy withdrew a complaint that sought to shift the expense — estimated at more than $100 million — of connecting the natural-gas/diesel power plant to the electric grid to ratepayers. The Rhode Island Energy Facilities Siting Board (EFSB) called a special “show-cause” hearing to ask Invenergy why it seemed to be breaking its promise to not charge ratepayers for any portion of the $1 billion project. The EFSB was expected to suspend the application process until the FERC cases were resolved.
Once Invenergy withdrew its lawsuit and pulled out of a water agreement with the Narragansett Indian Tribe, the EFSB canceled the show-cause hearing. The siting board also announced that the Clear River Energy Center (CREC) proposal can proceed with the final hearings for the application process, which is tentatively scheduled to begin April 11 and run through August or later.
Jerry Elmer, senior attorney for the Conservation Law Foundation (CLF), has been chronicling the legal activity in regular e-mails to the media. CLF is an intervenor in the CREC docket before the EFSB and opposes the power plant. CLF and the town of Burrillville failed to persuade the EFSB to go forward with the show-cause hearing, to clarify how Invenergy will pay for the interconnection costs or whether the Chicago-based energy developer will appeal FERC’s ruling.
Elmer said Invenergy still faces a dilemma: paying the massive expense for interconnection or risk having the project denied by the EFSB for balking on its promise to not charge ratepayers for the construction of the fossil-fuel power plant.
FERC ruled on the complaint just as CLF and the town of Burrillvile urged the EFSB a second time to preserve the show-cause hearing. Elmer, however, noted that Invenergy is facing another problem: time. By making National Grid perform the interconnection, the completion date of the project will likely move beyond its already delayed start date of June 1, 2021. On that date, the CREC is contracted to deliver power to the regional power grid. Failure to make that deadline means Invenergy must sell its commitment to a surrogate power producer, thus creating an additional expense while further delaying a major source of revenue.
If Invenergy wants to get construction moving it will have to pay tens of millions for a bond, Elmer said. But, he noted, the company previously stated it wouldn't pay for the interconnection. Invenergy, therefore, may be close to abandoning the project, Elmer surmised.
As a final option, Elmer said Invenergy and National Grid could negotiate a new, faster construction schedule for the interconnection. However, ISO New England may terminate Invenergy's power-purchase contract, reached through a competitive auction, if it expects further delays, he added.
“It would be the end of Invenergy politically, because Invenergy’s only argument ... in favor of the plant would be gone. It would also be the end of Invenergy economically, because that price lock-in from the auction is crucial to any developer turning a profit,” Elmer said.