Comments in Support of Mystic Settlement Agreement

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Dated: March 29, 2023

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Constellation Mystic Power, LLC  

Docket No. ER18-1639-021



Pursuant to Rule 602(f) of the Rules of Practice and Procedure of the Federal Energy Regulatory Commission (“FERC” or “Commission”), 18 C.F.R. § 385.602(f), the New England States Committee on Electricity (“NESCOE”) submits comments in support of the Settlement Agreement by and among Constellation Mystic Power, LLC (“Mystic”), Constellation Energy Generation, LLC (“Constellation Generation”), the Attorney General of the Commonwealth of Massachusetts (“Mass AG”), the Connecticut Department of Energy and Environmental Protection (“CT DEEP”), the Connecticut Public Utilities Regulatory Authority (“CT PURA”), the Connecticut Office of Consumer Counsel (“CT OCC”), ISO New England, Inc. (“ISO-NE”) and NESCOE, filed by Mystic in this proceeding on March 15, 2023 (“Settlement Agreement”).[1]  Attached to these comments as Attachment A is the Affidavit of Jeffrey W. Bentz.


NESCOE is the Regional State Committee for New England.  It is governed by a board of managers appointed by the Governors of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont and is funded through a regional tariff that ISO New England Inc. (“ISO-NE”) administers.[2]  NESCOE’s mission is to represent the interests of the citizens of the New England region by advancing policies that will provide electricity at the lowest possible price over the long term, consistent with maintaining reliable service and environmental quality.[3]

II.            BACKGROUND

On May 16, 2018, pursuant to section 205 of the Federal Power Act (“FPA”), 16 U.S.C. §824d, Mystic filed a cost-of-service agreement among Mystic, its affiliate Exelon Generation Company, LLC (now Constellation Generation), and ISO-NE (the “Agreement”).  The Agreement provides cost-of-service compensation to Mystic for continued operation of the Mystic 8 and 9 natural gas-fired generating units (the “Mystic Units”).  On July 13, 2018, the Commission accepted the Agreement for filing, suspended it for a nominal period, to become effective June 1, 2022 as requested, subject to refund, and established hearing procedures.[4]  NESCOE actively participated in the evidentiary hearing and sponsored the testimony of four witness, including that of Mr. Bentz, now the Director of Market Affairs at NESCOE.[5]  Among other things, Mr. Bentz testified to the need for a clawback provision to protect consumers if either of the Mystic generating units or the Everett Marine Terminal (“Everett” or EMT”), an indirect wholly-owned subsidiary of Constellation Generation, remain in operation after the Agreement ends on May 31, 2024.[6]

            Following an expedited hearing, on December 20, 2018, the Commission issued an order accepting the Agreement, subject to condition, effective June 1, 2022.[7]  The December

2018 Order found, among other things, that the Agreement was unjust and unreasonable because it failed to include a clawback provision.  The Commission directed Mystic to incorporate a clawback that would refund the cost of repairs less depreciation if the Mystic Units do not retire at the end of the Agreement’s term but instead return to the market.[8]  NESCOE sought clarification and rehearing of failure of the December 2018 Order to require a clawback provision applicable to not only the Mystic Units but to Everett as well.[9]  The Commission denied NESCOE’s request, and NESCOE and others sought review of FERC’s orders on this and other issues.  In August 2022, the D.C. Circuit granted the petitions for review of NESCOE and other state petitioners.[10]  Among other things, the Court found that the Commission’s reasoning for excluding Everett’s costs from the clawback did not hold up to scrutiny and granted the state petitioners’ petition and vacated the clawback portion of FERC’s orders.[11]

            NESCOE has participated actively in the annual review process of Mystic’s costs, as set forth in the protocols, Schedule 3A of the Agreement.  On October 15, 2021, NESCOE filed formal challenges to Mystic’s 2021 Informational Filing (“2021 Formal Challenges”).[12]  As part of its 2021 Formal Challenges, NESCOE argued that Mystic had not provided adequate support for approximately forty Mystic and Everett capital expenditure projects (totaling $3 million for Mystic and nearly $5.7 million for Everett).[13]  NESCOE also explained that Mystic had not demonstrated a reliability need for certain Everett projects, for example, inclusion of a forward bollard project.  The Commission issued an order in April 2022, granting certain of NESCOE’s 2021 Formal Challenges.  The Commission found that “Mystic has not adequately supported its 2022 CapEx Projects as being necessary to meet the obligations of the Mystic Agreement or being the least-cost commercially reasonable option consistent with Good Utility Practice.”[14]  The Commission set NESCOE’s 2021 Formal Challenges and the formal challenges of other parties for hearing and established settlement procedures.  NESCOE has been actively participating in the settlement procedures.

            NESCOE likewise participated actively in the review of Mystic’s 2023 projected capital expenditures in the 2022 annual review process, which culminated in Mystic’s 2022 Informational Filing.[15]  On October 17, 2022, NESCOE filed formal challenges arguing that certain of Mystic’s 2023 capital expenditures were not adequately supported, having been deemed “emergent:”  $2.5 million of Mystic 2023 capital expenditures, and $6.35 million of EMT 2023 capital expenditures (“2022 Formal Challenges”).[16]  NESCOE also challenged the inclusion of property tax unrelated to the Mystic 8 & 9 Units in the 2022 Informational Filing, but noted it was willing to hold this challenge in abeyance until the 2023 true-up filing.  The Commission has not yet acted on NESCOE’s 2022 Formal Challenges.  On February 17, 2023, Mystic filed a motion seeking abeyance of 2022 formal challenges (which NESCOE supported, with respect to the NESCOE 2022 Formal Challenges).[17]


            The Settlement Agreement resolves NESCOE’s 2021 Formal Challenges and part of NESCOE’s 2022 Formal Challenges.  Pursuant to the Settlement Agreement, Mystic will forego full recovery of all EMT capital expenditures, not just for the 2022 rate year ($8.15 million), but for the entire term of the Agreement.  Instead, Mystic will recover these amounts as part of the EMT rate base,[18] thus recovering only the rate of return and depreciation expense on the EMT capital expenditures during the term of the Agreement.

As Mr. Bentz explains, by providing for this treatment of the EMT capital expenditures, the Settlement Agreement removes the need for a clawback for Everett.[19]  Under the clawback provision that Mr. Bentz proposed during the 2018 hearing, consumers would have received the EMT capital expenditures less depreciation plus interest at the FERC-approved rate over a four-year period if Everett did not retire at the end of the term.[20]  Having clawback protection for Everett has been a critical issue for NESCOE for over four years.  Without it, New England electricity consumers will effectively pay to upgrade Everett during the Agreement’s term, and if Everett does not retire, Constellation would retain full recovery of the EMT capital expenditures at the end of the Agreement, thus providing it with a windfall and possible unfair competitive advantage in future operations.[21]  The Settlement Agreement will resolve this issue in a manner that is favorable for New England consumers and in a way that reduces regulatory uncertainty for all parties.

As part of the Settlement Agreement, Mystic has also agreed not to seek recovery of costs related to the forward bollard project that NESCOE challenged.[22]  Additionally, under the Settlement Agreement, Mystic will treat $7 million of 2022 capital expenditures related to the Mystic Units as rate base, rather than fully expensing that amount (thus recovering only a rate of return plus depreciation expense on this amount).[23]  Consistent with the Settlement Agreement, Mystic has filed a request for waiver of certain deadlines in the protocols[24] and a motion asking the Commission for permission to implement the settlement rates—both for Mystic and Everett—on an interim basis.[25] These implementation details are important because they will enable New England consumers to reap the benefit of the reduced rates in a timely manner, rather than waiting for the outcome of a future true-up proceeding and possible litigation, which most likely would be long after load-serving entities will have likely established their competitive rates.

If the Commission approves the Settlement Agreement, NESCOE will partially withdraw its pending 2022 Formal Challenges, i.e., those challenging Mystic’s capital expenditures.[26]       


For the reasons discussed above and in Mr. Bentz’s Affidavit, NESCOE respectfully requests that the Commission approve the Settlement Agreement by the date requested, i.e., no later than September 1, 2023.


Respectfully Submitted,


/s/ Shannon Beale                  

Shannon Beale

Assistant General Counsel

New England States Committee on Electricity

P.O. Box 322

Osterville, MA 02655

Tel: (781) 400-9000



/s/ Phyllis G. Kimmel             

Phyllis G. Kimmel

Phyllis G. Kimmel Law Office PLLC

1717 K Street, NW, Suite 900

Washington, DC 20006

Tel: (202) 787-5704


Attorneys for the New England States Committee

on Electricity

Date:  March 16, 2023



In accordance with Rule 2010 of the Commission’s Rules of Practice and Procedure,
I hereby certify that I have this day served by electronic mail a copy of the foregoing document upon each person designated on the official service list compiled by the Secretary in this proceeding.

Dated at Washington, DC this 16th day of March, 2023.

/s/ Phyllis G. Kimmel             

Phyllis G. Kimmel

Phyllis G. Kimmel Law Office PLLC

1717 K Street, NW, Suite 900

Washington, DC 20006

Tel: (202) 787-5704



Document Source Citations

[1]     Constellation Mystic Power, LLC, Settlement Agreement to Resolve Formal Challenges to 2021 Informational Filing (sub-docket -015), and Request for Action by September 1, 2023, Docket No. ER18-1639-021 (filed Mar. 15, 2023).

[2]     ISO New England Inc., 121 FERC ¶ 61,105 (2007).

[3]     See Sept. 8, 2006 NESCOE Term Sheet (“Term Sheet”) that was filed for information as Exhibit A to the Memorandum of Understanding among ISO-NE, the New England Power Pool (“NEPOOL”), and NESCOE (the “NESCOE MOU”).  Informational Filing of the New England States Committee on Electricity, Docket No. ER07-1324-000 (filed Nov. 21, 2007).  Pursuant to the NESCOE MOU, the Term Sheet is the binding obligation of ISO-NE, NEPOOL, and NESCOE.

[4]     Constellation Mystic Power, LLC, 164 FERC ¶ 61,022 (2018).

[5]     Answering Testimony and Exhibits of Jeffrey W. Bentz on Behalf of New England States Committee on Electricity, Docket No. ER18-1639-000 (filed Aug. 23, 2018; revised filed Sept. 25, 2018) (“Bentz Testimony”).

[6]     Bentz Testimony at 21-27.

[7]     Constellation Mystic Power, LLC, 165 FERC ¶ 61,267, at P 1 (2018) (“December 2018 Order”).

[8]     Id. at P 208.

[9]     Request for Clarification or, in the Alternative, Rehearing of the New England States Committee on Electricity, Docket No. ER18-1639-002 (filed Jan. 22, 2019).

[10]   The state petitioners were CT DEEP, CT PURA, CT OCC, the Mass AG and NESCOE.

[11]   Constellation Mystic Power, LLC v. FERC, 45 F.4th 1028, 1056-57 (D.C. Cir. 2022).

[12]   Formal Challenge of the New England States Committee on Electricity, Docket No. ER18-1639-000 (filed Oct. 15, 2021).

[13]   Id. at 16-18.

[14]   Constellation Mystic Power, LLC, 179 FERC ¶ 61,011, P 26 (2022).

[15]   Constellation Mystic Power, LLC, 2022 Informational Filing, Docket No. ER18-1639-000 (filed Sept. 15, 2022).

[16]   Formal Challenge of the New England States Committee on Electricity, Docket No. ER18-1639-000 (filed Oct. 17, 2022).

[17]   Motion for Abeyance of Formal Challenges to Constellation Mystic Power, LLC’s September 15, 2022 Informational Filing, Docket No. ER18-1639-000 (filed. Feb. 17, 2023).

[18]   Settlement Agreement Section 2.2.

[19]   Attachment A, Bentz Affidavit at P 11.

[20]   Id.

[21]   Id. at PP 8, 10.

[22]   Settlement Agreement Section 2.5.

[23]   Id. Section 1.2.

[24]   Constellation Mystic Power, LLC, Request for Limited Waiver, Shortened Comment Period, and Expedited Consideration by March 20, 2023, Docket No. ER23-1159-000 (Filed Feb. 17, 2023).

[25]   Motion of Constellation Mystic Power, LLC for Authorization to Implement Settlement Rate on an Interim Basis and Request for Expedited Action, Docket No. ER18-1639-022 (filed Mar. 15, 2023).

[26]   The Settlement Agreement does not affect NESCOE’s 2022 Formal Challenges related to property tax, which would remain pending before the Commission.  Settlement Agreement Section 3.5.