ISO-NE put the future of a 650-MW natural gas power plant in eastern Connecticut into potential regulatory doubt when it asked FERC on Thursday to terminate the project’s capacity supply obligation (CSO) in the next 60 days.

In a heavily redacted filing to the commission, ISO-NE said it is exercising its right to seek termination of the CSO for the Killingly Energy Center after consulting with NTE Energy, the Florida-based developer of the project. If FERC accepts the termination, NTE must forfeit any financial assurance associated with the terminated megawatts. Terminated resources also lose their associated CSO and rights to any related payments. It would also make Killingly ineligible for the 16th Forward Capacity Auction in early February 2022.

ISO-NE spokesperson Matt Kakley told RTO Insider that Killingly, which initially secured a CSO in 2019’s FCA 13 for the 2022/23 capacity commitment period, was required to meet several development milestones such as financing, permitting, major equipment orders and commercial operation. Developers facing delays in meeting milestones can find other resources to cover their obligations for up to two years. But if a project is still unable to meet its milestone deadlines after two years, ISO-NE has the right to seek termination of the resource’s CSO through FERC.

“The ISO is exercising this right with regard to the Killingly Energy Center,” Kakley said.

NTE Managing Partner for Development Tim Eves said in a statement to RTO Insider that “while we appreciate all of the work that ISO-NE does, we are disappointed that it has not chosen to come down on our side of this equation.”

“ISO-NE’s determination is based on an incorrect assumption regarding a financing milestone date. Financing for the Killingly Energy Center is imminent, and this filing will only further delay this much needed source of cleaner, more affordable energy,” Eves said. “Killingly is the much needed bridge to the clean energy future, and we will exercise all options available to show FERC that Killingly has not only already commenced its construction schedule but also will be online in time to meet its capacity supply obligation.”

A spokesperson for the Connecticut Department of Energy and Environmental Protection said the agency has long heard “that there have been questions regarding the viability of this project.”

“Clearly, ISO-NE identified things that called into question the project’s ability to reach required project milestones and made their determination to file a resource termination,” the DEEP spokesperson said.

Killingly Opponents React

A divided Connecticut Supreme Court in September upheld a lower court decision to dismiss a complaint from local environmental group Not Another Power Plant that the Connecticut Siting Council acted “improperly” in its decision when it did not account for potential environmental damage from a needed expansion of a pipeline to deliver fuel. The decision was a legal victory for NTE and Eversource Energy (NYSE:ES), the latter of which was expected to rebuild an existing pipeline to deliver gas to the facility. (See Conn. Supreme Court Affirms Lower Court Decision on Power Plant Approval.)

Opponents of the plant welcomed Thursday’s action by ISO-NE.

“People from all over Connecticut have recognized that dirty power generation conflicts with the future we all want and need to avoid the worst impacts of climate change,” Samantha Dynowski, director of Sierra Club’s Connecticut chapter, said in a press release that also captured similar sentiments from other groups opposed to Killingly. “Sierra Club is very hopeful that FERC will accept ISO-NE’s request for termination of the capacity contract for the fracked gas power plant proposed for Killingly and that Connecticut can focus on a clean and climate-friendly future. This is a major step in the right direction for clean air and a livable planet.”

Kate Donnelly, a member of Killingly, Conn.-based No More Dirty Power, said the plant would increase the pollution in a town “with high asthma rates that already houses a fracked gas power plant.”

“Its construction would make it impossible to meet Connecticut’s goals to address the climate crisis, [and] the energy from this plant wouldn’t even be used in our state,” Donnelly said. “For these reasons, people have been fighting construction of the power plant since it was first approved. Even though we were repeatedly told it was a ‘done deal,’ we fought on. With this news, we are hopeful that it is the beginning of the end of the Killingly Energy Center, and we can all focus on meeting our climate goals through energy-efficiency programs and the development of renewable resources.”

Leah Ralls, president of NAACP’s Windham-Willimantic branch, said its membership unanimously passed a resolution opposing the construction of the power plant in April.

“Environmental racism and economic injustice can be defeated when we stand together and work toward development and construction of clean, renewable energy sources,” Ralls said. “Today’s news of ISO-NE’s termination filing for [Killingly] brings us closer to that outcome.”