Seeking to extend Mystic Generating Station’s cost-of-service contract for an additional year, Exelon on Wednesday accused ISO-NE of violating its Tariff by shortcutting its transmission security review and prematurely culling bids received in response to its Boston competitive transmission solicitation.

In a complaint filed with FERC Wednesday, Exelon alleged that the RTO is putting the reliability of the Boston area at risk “by prematurely substituting the uncertain outcome” of its transmission request for proposals “for the certainty provided by Mystic” (EL20-52).

The filing came two days after ISO-NE surprised many by announcing it had narrowed 36 responses to its first competitive RFP under FERC Order 1000 to a single finalist, a $49 million project by incumbent utilities National Grid and Eversource Energy. (See National Grid, Eversource Finalist for Boston Tx Plan.)

The RFP was issued to address transmission violations expected after the shuttering of Exelon Mystic Units 8 and 9, whose retirement was extended to May 30, 2024, under a two-year, $400 million cost-of-service contract to preserve the region’s reliability. The project recommended by the RTO Monday has a projected in-service date of Oct. 1, 2023, eight months before the end of the contract.

In its complaint, Exelon alleges that ISO-NE is violating its Tariff by prematurely rejecting the other bids and modifying its planning procedures to qualify the National Grid-Eversource project in time for Forward Capacity Auction 15 in February 2021, which will procure resources for capacity commitment period 2024/25.

“Twice in the last eight months, ISO-NE has sought permission from the commission to alter its Tariff to prevent the retention for reliability of … Mystic 8 and 9, and twice the commission has said that those efforts were premature,” Exelon said, referring to FERC rulings on Feb. 14 (ER20-645) and March 6 (ER20-89). (See FERC Rejects ISO-NE Fuel Security Sunset Rollback and FERC Rejects ISO-NE Fuel Security Tariff Revisions.) “Now ISO-NE has revised its planning procedures to do the same thing, but this time, without asking the commission.”

Exelon cited ISO-NE’s changes to Planning Procedure 10 (PP10) to modify the rules for determining whether planned transmission can be included in the network model for the studied capacity commitment period.

The new language said projects proposed in response to an RFP that “are reasonably likely to be in service prior to the relevant capacity commitment period … may be determined to be timely and sufficient to meet the reliability need.” It was approved by the New England Power Pool Participants Committee over Exelon’s opposition on June 4. (See “Order 1000 Questions on Tx Planning,” NEPOOL Participants Committee Briefs: June 4, 2020.)

Exelon said the change, which was not filed with FERC, violates the Tariff’s “strict rules” for determining whether planned transmission can be included in the network model. “Unless a transmission project has been certificated or executed a binding construction contract, and met important milestones, and been vetted and selected through an extensive process, the project cannot be included in the modelling,” Exelon said. It said the changes to PP10 will shorten the amount of time for project construction by as much as two years.

“We strongly disagree with Exelon’s complaint, and we look forward to addressing a number of inaccuracies contained therein,” ISO-NE spokesman Matt Kakley said Thursday. “Exelon requested to retire its Mystic plant, and we have worked diligently to accommodate their request while maintaining system reliability in the region. We are moving forward in solving the reliability issues caused by Mystic’s retirement in a timely and cost-effective manner.”

Expedited Ruling Sought

Exelon asked FERC to limit answers to its complaint to 14 days and issue an order by Aug. 4. “Expedition is crucial because ISO-NE will perform its transmission security review from June 11, 2020, through Aug. 18, 2020,” Exelon said. “Action by Aug. 4 will allow a reasonable amount of time (two weeks) for ISO-NE to correct its transmission security analysis by the Aug. 18 deadline.

“Whether ISO-NE follows the merchant approach or the incumbent approach, it is unlikely that the analysis will be completed, and a project selected and committed, before the FCA 15 auction is run in February of 2021,” it continued. “Put differently, because the transmission security analysis will be completed in August of 2020, ISO-NE will not have a vetted, approved and committed project in place in time to conduct that review. The revision to Planning Procedure No. 10, and likely the truncating of the RFP, are intended to circumvent this problem, but in taking these actions, ISO-NE runs afoul of the Federal Power Act, the ISO-NE Tariff and commission ‘rule of reason’ precedent.”

Exelon also claimed that ISO-NE “has unduly rushed” its RFP analysis, saying “its elimination of some projects based on project installed cost alone bypasses the detailed weighing of factors required for viable projects in Phase Two … and exceeds ISO-NE’s authority to cull the list of proposals in Phase One.”

The RTO said it cut the candidates down to one project on the basis of installed cost and the speed of completion.

“That is unwarranted,” said the complaint. “To be sure, the Phase One information that project sponsors are to submit includes cost information but only ‘estimated life-cycle and installed costs of the proposed solution, including a high-level itemization of the components of the cost estimate, a description of the financing being used and any cost containment or cost cap measures.’”

By contrast, Phase Two requires “detailed cost component itemization and life-cycle cost,” and permits “clarifications to cost containment or cost cap measures that were not included as part of the Phase One Proposal,” the complaint said in quoting the Tariff.

Long and Litigious

Exelon announced in 2018 that it would retire the 2,001-MW Mystic plant’s units 8 and 9, which began a long and litigious process of the RTO working to keep the plant running for “fuel security” reasons rather than for reliability, the only rationale then allowed under the Tariff.

Wednesday’s complaint is the latest move by Exelon to extend Mystic’s life after announcing in 2018 that it would retire the plant as uneconomical, citing its dependence on LNG, which is more expensive than natural gas from pipelines.

The “fuel security” cost-of-service agreement for Mystic Units 8 and 9 and the Exelon-owned LNG terminal that supplies them pays Exelon an annual fixed revenue requirement of almost $219 million for capacity commitment period 2022/23 and nearly $187 million for 2023/24, subject to true-ups for fuel costs.

In April, Exelon filed interconnection requests to keep the two combined cycle units running beyond 2024. asking the RTO to treat the units — with combined capacity of 1,600 MW in summer and 1,700 MW in winter — as “new” resources. (See Exelon Bid to Keep Mystic Units Running Provokes Outrage.)

Kakley emphasized Tuesday that the RTO has “not selected” the National Grid-Eversource project but is only proposing to advance it to further review under Phase 2. RTO staff will discuss their review of the proposals with stakeholders at the Planning Advisory Committee on June 17.