April 3 Update:
Exelon Power’s Mystic Generating Station located in Charlestown, Massachusetts, has announced planned retirement in 2022. The power plant has the highest nameplate capacity of any station in the state, and provides reliable baseload generation to serve the nearby Boston demand center. Mystic sources fuel from the Everett LNG terminal; this indicates that even as gas supplies in the Northeast become tight, Mystic can be counted on to serve ISO-NE demand as long as LNG remains available.
However, Genscape’s ISO-NE Power Market Analysts determined that Mystic is unlikely to have cleared a full Day-Ahead market schedule for April 3 and is not expected to reenter the supply stack in time to support baseload generation during the beginning of maintenance season. As temperatures warm in the region, generators use the period of low demand to take their assets offline and perform routine maintenance. With only 56 MW of implied cleared generation out of Boston load zone beginning 10:00 PM ET of April 3, it appears the LNG-fed baseload generator has exited the supply stack only two hours before the implementation of fuel supply-threatening pipeline maintenance. Upside risks are abundant now that gas-fired generation with high heat rates will have to make up for this loss of baseload supply. This is occurring amidst the continued 500 MW limitation on NYAC interface imports, and a line outage placing economic restrictions on New Brunswick imports.
According to the Genscape Natural Gas and LNG teams, Mystic is a large consumer of Everett LNG terminal storage gas, averaging 201 MMcf/d gasburn from March 27 to April 2. The previously inbound LNG cargo, “BW Boston,” has rerouted, likely due to the news of Mystic maintenance. For New England, this will allow more sendout from Everett storage onto Tennessee Gas Pipeline and Algonquin Gas Transmission (AGT). However, seeing sendout volumes this time of year is rare. Given the 0.8 Bcf/d import restriction on Algonquin that will last through April 18, Everett may have to break pattern in order to secure supply.
Increased gas-pipeline dependency is expected with the loss of Mystic as LNG-fed baseload supply. An already tight supply stack is getting tighter given the imminent increased reliance on pipeline natural gas imports. Market participants are advised to closely follow maintenance and outage reports to manage the magnitude of upside risks in store for the coming maintenance season.
April 4 Update:
Critical Notices for AGT posted that the Stony Point compressor station operational capacity will be maximized until April 10. Pipeline maintenance was originally scheduled to begin on April 4 and was expected to reduce Stony Point flow capacity to 691,000 DTH. Capacity is now scheduled to remain at 1,714,000 DTH until April 10. With cool temperatures remaining in the Northeast and Mystic’s exit from the supply stack, it appears as though the postponing the maintenance acts as an attempt to relieve the fuel and power supply strain in New England. Maintenance reducing Burrillville compressor station operational capacity to 491,000 DTH is still active and will continue to bring upside risks to natural gas prices during week ending April 6. Should Mystic remain out of the supply stack, LNG from the Everett LNG import terminal could be used to serve Boston heating demand in light of the fuel supply restrictions. The capacity reduction at Stony Point being postponed is will likely allow gas-fired generation in Connecticut to count on a more consistent flow of fuel supply. This is pivotal given Mystic’s sudden exit from the supply stack.
Day-ahead (DA) cleared generation in the NEMA indicates the return of Mystic generation in the DA supply stack. Despite exiting the supply stack for claimed maintenance. This comes immediately following the postponement of capacity reductions through the Stony Point compressor station. While market participants likely assumed Mystic’s continued absence in supply stack and colder temperatures on the horizon, gas prices rallied higher through the day. Mystic rejoining the supply stack brought some downside to power prices throughout New England, although prices received for that generation remain high due to AGT prices. The 1,426 MW of generation cleared out of NEMA indicates that LNG-fired generation was able to return to the supply stack much faster than the market anticipated and capitalize on energy high prices throughout the footprint.
Genscape will continue tracking the status of Mystic as we head into the maintenance season. Our ISO-NE Power Analysts will provide clients with timely alerts and updates as changes impact the market. Please click here to request a trial of Genscape’s PowerIQ and do not miss out on this key market insight.