Coal-fired power is dying, not only across the nation, but across New England as well. The region’s coal-fired power plant fleet has started to succumb to the costs of operating a coal-fired dinosaur in the age of energy efficiency, growing renewable electricity generation, and–for now–low natural gas prices.
Predominantly coal-fired Brayton Point Station in Somerset, Massachusetts, is the state’s largest single source of carbon emissions (producing over 6 million tons in 2010). Another harmful pollutant emitted by Brayton Point is particulate matter, which is measured daily by monitors that continuously check the opacity of the soot coming out of the plant’s smokestack. Brayton has been violating their limits for emitting that soot, and failing to monitor their emissions of several other harmful pollutants. Yesterday, CLF filed a notice of intent to sue Brayton’s current owners, Dominion Resources, for those violations. CLF’s upcoming lawsuit is just the latest in a growing list of bad news for Dominion and Brayton Point.
As New England’s other coal plants started to close or teeter on the edge of closure, Brayton Point Station was expected to be the last coal plant standing in the region. It is New England’s largest coal-fired power plant, and in the past decade its current owners, Dominion Resources, sank over $1 billion in pollution control upgrades into the behemoth. While Brayton Point does not have the kind of legal protection from market realities that PSNH exploits to prop up its dirty old coal generation in New Hampshire, many had assumed that Brayton Point was well-positioned to survive in the changing power generation landscape.
source: EPA and ISO-NE data
But the relentless pressure of low natural gas prices and the costs of starting up and operating an enormous coal-fired power plant have begun to affect every corner of the coal generation market in New England, and Brayton Point has not been spared. The plant’s “capacity factor,” which reflects the amount of power the plant generated compared to the amount of power it could have generated if used to its full potential, has taken a nosedive over the past three years. A plummeting capacity factor means that it is a better economic choice for a plant’s owners to keep it idle most of the time than to operate.
Dominion Resources, clearly, has seen the writing on the wall for coal in New England. After signing a binding agreement to cease coal operations at Salem Harbor Station as a result of CLF’s lawsuit against that plant, Dominion sold the Salem plant earlier this year. Following closely on the heels of the Salem sale, the company put Brayton Point on the market in September. While Dominion is marketing Brayton as a modern coal-fired power plant due to its recent billion-dollar pollution control investments, UBS recently assessed [PDF] the value of those investments (and the plant itself) at zero.
Brayton Point’s plummeting capacity factor and bleak sale prospects reflect both the current power of low natural gas prices and the weakness of these old, out-dated coal plants. That trend will continue as the New England energy market continues to move forward with better integration of efficiency, conservation and renewable generation. Dark clouds are rising over Brayton Point. In the meantime, CLF and our partners will work diligently to hold the Brayton Point power plant accountable for producing its own dark clouds of pollution in violation of the law.
Protest at Salem Harbor Power Plant. Courtesy of Robert Visser / Greenpeace.
This week the Conservation Law Foundation (CLF) and HealthLink secured an Order from the US District Court in Massachusetts requiring Salem Harbor power plant owner Dominion to shut down all four units at the 60-year-old coal-fired power plant by 2014. In bringing a clear end to the prolonged decline of Salem Harbor Station, this settlement ushers in a new era of clean air, clean water and clean energy for the community of Salem, MA, and for New England as a whole.
The court’s order is based on a settlement with Dominion to avoid CLF’s 2010 lawsuit alleging violations of the Clean Air Act from going to trial. The terms of the settlement, which can be found here, ensure that:
Units 1 and 2 at the plant must retire (indeed are retired) by December 31, 2011; Unit 3 by June 2014;
Dominion may not repower the retired coal-burning units, even if a buyer for the power was to come forward;
Neither Dominion, nor any successor, may use coal as fuel for generating electricity on that site in the future;
Dominion must fund projects of at least $275,000 to reduce air pollution in Salem and surrounding municipalities that have been impacted by the plant’s emissions.
The settlement, and the legal actions which led to it, provide a template to force plant shutdowns as changing market conditions, public health concerns and cleaner energy alternatives push the nation’s fleet of old, polluting dinosaurs to the brink. What makes this outcome unique is that, as part of its advocacy strategy, CLF filed a successful protest at the Federal Energy Regulatory Commission in Washington DC which effectively prevented Dominion from collecting above market costs for operating this aging and inefficient power plant. This first-ever ruling by FERC is in stark contrast to coal power plant retirements in other areas of the country which were brought about by agreements to pay (i.e., compensate) plant owners for shutting down their plants. In the case of Salem Harbor Station, retirement resulted from legal action to deny the plant’s owner compensation and cost-recovery by ratepayers.
A little background: Most of the nation’s coal-burning fleet, were designed, constructed and began operation in the 1950’s and 60’s. More than 60% of them have been operating for 40 years or more, meaning that they are now beyond their useful design lives. This is the case for all of New England’s remaining plants, which generally were built more than 50 years ago. In addition to the excess pollution and inordinate adverse impact these plants impose to public health and the environment, they are finding it difficult to compete with newer, cleaner and more efficient power producing technology. In the market, the day of reckoning has arrived. New England’s coal-fired power plants are losing their shirts. They are rarely asked to run by ISO-New England, the operator of our regional electricity system, because their power is more costly (i.e., out-of-market) than the region’s cleaner and more efficient power generating fleet.
So why don’t they all retire? Unfortunately, there are several factors that can, in many instances, complicate matters. For Salem Harbor Station: system reliability (i.e., keeping the lights on). Because these plants were built so long ago, and unfortunately in close proximity to population centers where demand for power is greatest, the system was designed assuming that electricity is being generated at these locations. Thus, removing electricity generation from these sites can create reliability risks at times of peak electricity consumption. This was the case for Salem Harbor. Try as we might (including NStar’s recent $400 million transmission upgrade in the North Shore), when ISO-NE modeled worst case conditions, it still found that Salem Harbor was needed for reliability and consequently required ratepayers to pay to maintain Salem Harbor, even though its power was far more expensive to produce than more modern plants. To break this logjam, CLF filed a protest at FERC claiming that ratepayers were getting bilked (in legalese: paying rates that were unjust and unreasonable) and that a small investment to develop a reliability alternative for the plant would save the ratepayers money and would safeguard public health.
FERC agreed — at least with the money part (as FERC is a financial, not environmental regulatory agency). Its December 2010 order granting CLF’s protest compelled ISO-NE and the region’s electricity market participants to expedite the process for developing reliability alternatives for Salem Harbor’s expensive power (in utility parlance, to replace its “reliability function”). Shortly thereafter, ISO-NE crafted a new plan that will keep the lights on at reasonable cost to customers, while also creating a more flexible, reliable grid.
The new plan calls for simple and relatively inexpensive electric transmission line upgrades that will meet the area’s reliability needs without Salem Harbor Station and allow for the deployment of newer and cleaner energy resources like energy efficiency, conservation and renewables such as wind and solar. As soon as the plan was approved in May of 2011, the die was cast and Salem Harbor’s retirement became imminent. To its credit, the very next day Dominion announced that the plant would be shut down. As we all know, corporation’s make decisions based primarily on economics; once FERC denied them the above-market rates they had been collecting for years to maintain the plant, Dominion was compelled to retire the plant. Couple that with the prospect of major expenditures for pollution upgrades that would result from CLF and Healthlink’s lawsuit, there was only one rational outcome. Good-bye Salem Harbor station. Next up (or should I say, down): Mt. Tom, Brayton Point, both of which are uneconomic and facing the end of the road.
As I said in a joint press statement with Healthlink (found here), “This outcome sends a signal to coal plant operators everywhere that they cannot avoid costs through noncompliance with the Clean Air Act. These obsolete plants that either have decided not to invest in technology upgrades or are retrofitting at ratepayers’ expense are doomed: they are staring down the barrel of cheaper and cleaner alternatives to their dirty power and public and regulatory pressure to safeguard human health. When these plants can no longer get away with breaking the law as a way to stave off economic collapse, I predict we will see a wave of shutdowns across the country.”
The history of Salem Harbor Station is both long and tortured (recall then-Governor Romney standing at the gates of the plant in 2003 and saying that the plant was killing people). Despite its bleak financials and unjustifiable damage to public health and the environment, Salem Harbor Station continued to operate and pollute for a decade or more beyond when it should have succumbed to age and obsolescence.
Shanna Cleveland, staff attorney at CLF said, “The Court’s Order coupled with our successful FERC protest have finally put an end to a half century of toxic and lethal air pollution from Salem Harbor Station. The very factors that have been propping the power plant up for years beyond its useful life – cheap coal, lax environmental oversight, and overdue reliability planning – have been pulled out from under it.”
