Burrillville Power Plant Already Making Money

By TIM FAULKNER/ecoRI News staff

BURRILLVILLE, R.I. — The proposed Clear River Energy Center is already making money even though the fossil-fuel project has neither been approved or built.

The proposed power plant is still pending before the state Energy Facilities Siting Board (EFSB), but the nearly 1,000-megawatt facility was awarded a contract in 2016 to sell a portion of its electricity to the power grid starting in 2019.

The natural-gas/diesel-fueled power plant won’t be ready in 2019, so the developer, Invenergy Thermal Development LLC, sold its power obligation to other energy producers for about half the money it would receive from the operator of the power grid, ISO New England. It’s a one-year payout of about $20 million for the Chicago-based company.

“That is $20 million paid by New England ratepayers to Invenergy during one short year, for which Invenergy will do nothing,” said Jerry Elmer, one of the leading voices of opposition against the proposed facility.

Last year, Invenergy received some $10 million for selling the electricity obligation it failed to deliver.

Elmer, senior attorney for the Conservation Law Foundation, noted that the “free money” may not last long. It’s the second year in a row that Invenergy hasn't fulfilled its promise to deliver electricity to the power grid from the Clear River Energy Center. The failure to meet the obligation automatically allows ISO New England to terminate the 2016 electricity purchase deal with Invenergy.

ISO New England has incentives to end the contract, according to Elmer. Invenergy was awarded $7.03 per kilowatt-month to deliver electricity to the grid in 2019. But the price dropped to $3.67 per kilowatt-month for the most recent energy auction.

Under the Federal Power Act, ISO New England is legally obligated to ensure that electricity rates are just and reasonable. If the Invenergy contact persists without delivering electricity, the so-called “phantom megawatts” distort the prices of other auctions.

That alone may be reason for ISO New England to terminate the power deal, but Elmer noted that Invenergy’s problems may be much bigger. A glut of electricity production is driving down power-purchase prices, which affects power-plant revenues. It may also mean that Invenergy may not have a buyer for its power.

Through its initial contract, ISO New England only offered to buy 485 megawatts, or about half of the electricity from the Burrillville facility. Power from the Clear River Energy Center’s second turbine has been rejected from two annual ISO New England forward-capacity auctions. Invenergy has also been told not to bid on the future ones because the plant has already moved two years past its initial opening date.

A big argument in the upcoming EFSB hearings will be over the need for the Clear River Energy Center and its 1,000 megawatts of fossil-fuel power. Invenergy argues that the closure of older power plants across southern New England will drive demand. But Elmer and other project opponents argue that the Burrillville project is competing with other new natural-gas plants, renewable-energy development, battery storage, and energy efficiency.

“First, the plant is not needed,” Elmer said. “Second, the plant is costing ratepayers millions of dollars, even though it may very well never be built. Third, the plant would burn only fossil fuels, diesel oil and natural gas, both of which emit carbon pollution that cause climate change.”

Invenergy insists that it is committed to building the Clear River Energy Center “all the way through the regulatory and permitting process,” said Michael Blazer, chief legal officer at Invenergy. “Our resolve to permit, develop and operate this facility has never been stronger.”

The final phase of hearings for the proposed Clear River Energy Center are scheduled to resume July 19 at the Rhode Island Public Utilities Commission, 89 Jefferson Blvd. in Warwick. The hearings will be held intermittently through Oct. 31. A decision on the application is expected by January. The project also requires an air-pollution permit from the Rhode Island Department of Environmental Management and a power-interconnection agreement with National Grid.