Exelon Generation Co. LLC is retiring its 2,000-MW natural gas- and oil-fired Mystic Generating Station in Middlesex, Mass., and is purchasing ENGIE North America Inc.'s Distrigas LNG import terminal in Boston.
Exelon Corp. subsidiary Exelon Generation notified grid operator ISO New England March 29 of plans to retire Mystic units 7, 8, 9, and the Jet unit on June 1, 2022. Absent any regional reliability or fuel security needs, Mystic, Mystic CT, and Mystic River 8 and 9 will not participate in the forward capacity auction scheduled for February 2019. Units 1 through 6 are already decommissioned.
"Mystic has a strong track record as a source of reliable, around-the-clock electric supply to over two million homes in New England," Exelon Power President Ron DeGregorio said in a news release. "However, the ISO-NE market fails to properly reflect the reliability and fuel security benefits that these power plants provide to the region."
Exelon said it may reconsider retiring the Mystic units if anticipated ISO-NE market rule changes are timely filed and approved by the Federal Energy Regulatory Commission. Exelon noted that ISO-NE recently said it may propose interim and long-term market rule changes to address significant reliability risks that were identified in a January fuel security report. Exelon said the inability of "critical" generating units, like Mystic 8 and 9, to recover future operating costs, including the cost of securing fuel, underscores the need for market reforms in New England.
In a related move, Exelon announced an agreement to purchase ENGIE North America's LNG import terminal, known as the Everett Marine Terminal or Distrigas Terminal, to ensure reliable fuel supplies for Mystic Units 8 and 9 during the rest of their operations. As the longest-operating LNG import facility of its kind in the U.S., Exelon said the Distrigas Terminal will continue to supply regional gas utilities, marketers, and other market participants.
Closure of the LNG terminal sale is dependent upon regulatory review and LNG import authorization by the U.S. Department of Energy and, if necessary, authorization from the U.S. Department of Justice. Exelon expects the transaction to close in the fourth quarter of 2018.
