The Killingly Energy Center saga is not over yet.

The D.C. Circuit Court of Appeals issued a stay Friday on FERC’s order to terminate Killingly’s capacity supply obligation, allowing the proposed Connecticut natural gas plant to participate in ISO-NE’s capacity auction Monday.

The stay came just 72 hours before Forward Capacity Auction 16 for delivery year 2025/26. (See Experts Expect Stable or Decreased Prices in ISO-NE Capacity Auction.)

“Absent other legal developments, the ISO will comply with this order in the conduct of the auction and will therefore unwind the actions it had taken to terminate Killingly,” ISO-NE said in a notice to stakeholders Friday evening. “After FCA 16 is conducted, should FERC confirm the termination of Killingly, the ISO would adjust the auction results to reflect the removal of Killingly.”

ISO-NE had requested the termination of Killingly’s CSO in November, saying that the project would not be able to meet key milestones for fulfilling its capacity obligations.

FERC approved the termination Jan. 3, writing that it was “persuaded by the evidence” presented by ISO-NE (ER22-355). That meant Killingly would have to forfeit its CSO for 2022/23 and would not be able to take part in FCA 16. (See FERC Accepts ISO-NE Request to Terminate Killingly CSO.)

The D.C. Circuit ruled that the order cannot be enforced until FERC “resolves” developer NTE Energy’s Jan. 11 petition for rehearing.

The rehearing request would be automatically denied “by operation of law” if the commission does not act on it within 30 days.

The court’s full opinion was not yet available as of Saturday. Judge Robert Wilkins noted in the order that he would have denied the stay, but Judges Neomi Rao and Ketanji Brown Jackson sided with NTE.

The developer did not immediately respond to a request for comment.

In a second notice Sunday, the RTO said it had declined suggestions that it delay the auction. Instead, ISO-NE said it will calculate prices and quantities cleared with and without Killingly. “The ISO intends to keep these results confidential until there is greater certainty about Killingly’s status. This will protect the commercially sensitive information that might otherwise be revealed as part of the auction finalization process,” said Allison DiGrande, director of Participant Relations & Services. “This approach will allow the ISO to conduct the auction in a timely fashion, consistent with the requirements of its tariff, while addressing the uncertainty created by the recent D.C. Circuit Court of Appeals order.”

DiGrande said the RTO also will not reveal the results of any clearing in the substitution auction until Killingly’s status is resolved. “The ISO believes that this is the most prudent path to both minimize disruptions to the administration of FCA 16 and the required timing of [Forward Capacity Market] activities related to subsequent auctions. After due consideration, the ISO is confident that this approach will ensure the integrity of the auction while also complying with the D.C. Circuit Court of Appeals order.”

In a subsequent notice on Feb. 11, the RTO announced that NTE had been suspended from the markets and told stakeholders that “a
market participant would not be allowed to participate in an Forward Capacity Auction (FCA) unless it was in compliance with the Financial Assurance Policy.”

Five business days after being suspended, a company’s CSO would be terminated and financial assurance forfeited.