By TIM FAULKNER/ecoRI News staff
WARWICK, R.I. — The proposed Burrillville power plant was dealt a serious setback that was announced during the Sept. 20 Energy Facilities Siting Board hearing for the fossil-fuel project. But the developer, Chicago-based Invenergy Thermal Development, insists the matter won’t slow its plans to build the $1 billion project.
“Rhode Islanders need access to cleaner and cheaper sources of power, and Invenergy will keep our commitment to meeting that need with the Clear River Energy Center,” said Daniel Ewan, vice president of thermal development for Invenergy.
In 2016, the operator the New England power grid awarded Invenergy a contract to buy half of the electricity from the Clear River Energy Center beginning in 2019, the year the energy facility was expected to start operating. However, delays in the approval process have pushed the project back at least two years, prompting ISO New England to withdraw the electricity contract.
The power-purchase agreement is coveted because having a guaranteed buyer for the electricity gives the developer a future stream of income. This guaranteed revenue helps the company’s balance sheet and is looked at favorably by banks that lend money to the project.
The contract is also worth a lot of money. If Invenergy wasn’t able to deliver the electricity, it was allowed to sell its power-purchase allotment to another energy facility for each year it failed to generate power. The sale of its electricity obligation has earned Invenergy at least $26 million — money that helps the project fund the cost of delays.
Jerry Elmer, senior attorney for the Conservation Law Foundation (CLF), said now that Invenergy is losing the power-purchase agreement it “effectively kills the Invenergy project.”
Elmer explained that without the capacity payments from the grid operator, ISO New England, any profit for the energy project is gone.
“With no profit, there is no incentive to build the plant,” he said.
Invenergy insists it will sell the electricity as an independent supplier until it receives another power-purchase agreement, which are awarded annually from ISO New England through auctions.
Elmer, however, argued that the cancellation of the 2019 power-purchase contract means that the electricity from the nearly 1,000-megawatt power plant isn’t essential to meet future energy needs in the region. This “need” for the natural-gas/diesel-fired power plant is one of the primary qualifications that the Energy Facilities Siting Board (EFSB) must consider in approving or denying the project.
The EFSB will discuss this development when it hears from experts on the need for the electricity at public hearings scheduled for Oct. 16, 17, and 30.
At those hearings, CLF and the town of Burrillville are expected to present expert witnesses who will testify to the assertion that the growth of renewable energy, enhanced energy efficiency, and other new energy sources make the Clear River Energy Center redundant and unneeded during the 20-50 year life of the proposed power plant.
Elmer said that point has been backed by the fact that ISO New England only agreed to buy electricity from one of the two project’s electric turbines. Twice ISO New England rejected bids from Invenergy’s second turbine in the annual electricity auctions. Prior to a third auction, ISO New England told Invenergy not to submit a bid.
Elmer said he expects Invenergy to receive the same rejection notice from ISO New England later this month, ahead of the annual power-purchase auction in January.
“Today’s action is an unmistakable sign that the ISO does not want and does not need the electricity from Invenergy,” Elmer said.
In an e-mail, Elmer wrote that he intends to talk with Invenergy’s legal team this weekend to discuss having Invenergy withdraw its application before the EFSB.
If Invenergy doesn’t withdraw its application, Elmer said CLF will ask the EFSB to close the docket or simply deny the application.
“Today’s development is a huge win for opponents of Invenergy,” Elmer said.
Project hearings are scheduled to resume Sept. 26 at the PUC building, 89 Jefferson Blvd. in Warwick, conference room A, at 9:30 a.m.