Plans for 650 MW Killingly Power Plant in Doubt as Delays Threaten Price Guarantee

The future of a controversial natural gas power plant that was set to be built in Killingly is in doubt as the regional grid operator is looking to end a contract that was a key source of funding for the project.

ISO-New England on Thursday asked the Federal Energy Regulatory Commission to allow it to end a capacity contract with the Killingly Energy Center, a 650 megawatt natural gas plant that Florida-based NTE Energy was seeking to build in the northeastern Connecticut town of Killingly.

The project received a promise of funding from the regional grid operator ISO-New England in 2019, when it was one of the projects selected in an annual auction held to fund energy projects that will add to the region’s energy capacity three years in the future. 

The Killingly Energy Center was committed to start producing power in June 2022, but delays in permitting have meant that ground has not been broken on the project yet – with that deadline now just seven months away.

Matt Kakley, a spokesman for ISO-New England, said in an email that any project that secures funding through that auction has to meet several development milestones, including financing, permitting, major equipment orders and ultimately, being operational. 

If developers have delays in meeting those milestones, they are given two years to find other energy producers to cover their obligations to provide energy capacity to the regional grid. If they still are unable to meet those deadlines after two years, the grid operator can ask FERC to allow it to end the contract.

Tim Eves, NTE’s managing partner for development, said the company is disappointed that ISO-NE moved to end the contract, and said the grid operator’s decision is based on an “incorrect assumption” about a milestone date for financing.

“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 a much-needed bridge to the clean energy future, and we will exercise all options available to show FERC that Killingly has not only commenced its construction schedule, but also will be online in time to meet its capacity supply obligations.”

The proposed plant has become a flash point for environmental advocates in Connecticut, who saw the center as a symbol of the state’s inconsistent approach to climate change – on one 

hand setting goals for a zero-carbon electric supply, while also allowing new power plants fired by fossil fuels to be built. 

Sierra Club Connecticut  Director Sam Dynowski, whose organization was part of the opposition to the power plant, said she was hopeful FERC would approve the grid operator’s request, and that it meant the power plant would not be built. FERC has 60 days to rule on the request.

Kate Donnelly, a member of No More Dirty Power in Killingly, a group organized in opposition to the plant, said the same in a statement – calling the plant a bad idea for a town that already has one gas-fired plant and which has some of the highest rates of emergency room visits related to asthma in the state, outside of the major cities.

“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,” Donnelly said. “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.”

Gov. Ned Lamont has sided with environmentalists in voicing opposition to the power plant, but his administration, including Department of Energy and Environmental Protection Commissioner Katie Dykes, has said that the siting of natural gas power plants like Killingly is out of their control, and up to ISO-New England. 
Dykes has also been critical of the ISO, and the forward capacity auction in particular, for favoring natural gas projects – which provide energy to the entire region, but are disproportionately sited in Connecticut because it is more connected to the regions of the U.S. that produce natural gas.

Latest from Brendan Crowley