The largest of New England's three remaining coal plants will run until 2024 after clearing the regional grid operator’s latest forward capacity auction, or FCA 14.
The approximately 439-MW Merrimack station, which has been targeted by activists seeking its closure, posted a 14% average capacity factor in 2018 while operating as a peaker plant, according to S&P Global Market Intelligence data. Located in Bow, N.H., the generating facility first entered service in 1960.
Clean energy advocates had hoped the ISO New England's new two-step capacity market construct would allow state-subsidized clean energy resources to purchase capacity supply obligations from older fossil fuel-fired generators like the Merrimack station that are willing to retire. However, no megawatts were traded this year under the ISO-NE's substitution auction, known as the Competitive Auctions with Sponsored Policy Resources construct.
While the ISO-NE's auction results do not indicate whether the Merrimack station offered to retire through Competitive Auctions with Sponsored Policy Resources, the generator will be paid roughly $8.1 million over the course of the 2023/2024 commitment period through an obligation secured in the primary auction, according to the Concord Monitor. Those payments will allow the facility to run until 2024, President Jim Andrews of owner Granite Shore Power LLC told the local paper.
Held three years in advance, the ISO-NE's forward capacity auctions are designed to guide retirement decisions while ensuring enough supply is available to meet demand. The FCA 14's closing price of $2.00/kW-month was a 47% decrease from the 2019's auction price of $3.80/kW-month.
The ISO-NE has cheered the record-low clearing price as evidence of "unmistakable economic benefits for consumers in the six-state region." However, regulators in Connecticut and Massachusetts are now reassessing their states' relationship with the grid operator due to what one has described as a "lack of leadership" on cutting planet-warming carbon dioxide emissions.
