Pollution Rules Could Put A Lid On Oil-Fired Electricity Production During Cold Spell

Jan 2, 2018

The recent cold spell has spurred oil-fired power plants throughout New England into action. But the operator of the regional electricity grid says pollution control regulations could throttle supplies from those sources.

Over the last decade, relatively low-polluting natural gas has been New England’s dominant fuel for electricity generation. But in winter, demand for gas can skyrocket from consumers who need it to heat their homes, and that can limit supplies for electricity generation.

Soon after the polar vortex took hold last week, wholesale natural gas prices tripled. That has driven up wholesale electricity prices to a point where relatively inefficient oil-burning generators can be competitive.

Now, from a norm of providing less than 10 percent of the region’s electricity, oil-fired plants are providing more than 30 percent.

“Those facilities are operating along with the rest of the fleet reliably and providing resilience to the system during this historic cold snap that we’re all experiencing,” says Dan Dolan, executive director of the New England Power Generators Association.

Dolan says that as the oil-fired plants enter a period of extended operation, some are nearing hard limits on emissions of greenhouse gases such as carbon dioxide, set by the various New England states. He says Massachusetts, in particular, on Jan. 1 instituted stricter new limits on pollution from fossil-fuel electricity generation.

“We expect them to start hitting some of their expected performance standards fairly quickly. And the question becomes, as demand continues, if those facilities are no longer going to be able to run at the levels that they otherwise would, it will force other facilities in other states like Maine and New Hampshire to operate more,” he says.

That could force longer service from some of the most-polluting plants, including Wyman station, located on an island in Maine’s Casco Bay.

In a statement to Maine Public Radio, grid operator ISO-New England says it’s concerned that environmental limitations could affect how much and even whether some oil-fired power plants could operate this week and for the remainder of the winter.

ISO-New England spokesman Matt Kakley says the overall system has been performing well through the extreme cold, and capacity has steadily exceeded demand.

“It’s something we’re monitoring right now. But as we watch the weather and watch these dynamics play out it’s definitely something that we’re paying attention to,” he says.

While spot-market wholesale electricity prices have risen sharply over the last two weeks, that will not have an immediate effect on prices paid by retail consumers. But it can put upward pressure on prices over time.

Natural gas businesses have argued that New England consumers should pay for new natural gas pipeline capacity to overcome constraints on the region’s wintertime supply and, ideally, bring down prices. Such efforts have been shelved, however, after facing strong opposition from environmental advocates and seeing losses in court.

Dolan says emerging evidence that pollution regulations may constrain oil-generated electricity production in times of high demand will add a new element to the debate.

“I have no doubt that this is going to turn into a bit of a Rorschach test, with every different interest out there using it to talk about why whatever it wants should be done, including additional pipelines,” he says.

Environmental groups that have argued against added pipeline capacity could not immediately be reached for comment. In an email, a spokesman for the Massachusetts Office of Energy and Environmental Affairs says the state will “assess” any need to modify environmental regulations to ensure public health and safety.

Grid operator ISO-New England, meanwhile, says for the duration of the cold spell, it is increasing the frequency of its fuel surveys and other communications with power generators.