Outlook with your head in the sand? Pretty dark, even when the future around you is bright. (photo credit: flickr/tropical.pete)

In a public hearing tomorrow, a legislative committee of the New Hampshire House will take up a proposal – House Bill 1238 – to force Public Service of New Hampshire’s dirty, costly power plants to confront the realities of the electric marketplace. The bill would require PSNH to sell (“divest”) its plants by the end of next year. Tomorrow’s hearing on House Bill 1238 is scheduled for 8:30 am in Representatives Hall under the dome of the New Hampshire State House, on North Main Street in Concord.

The debate is long overdue and comes at a critical time. Over the last several years, New England’s restructured electric market has overwhelmingly turned away from uneconomic facilities like PSNH’s coal and oil-fired power plants and toward less-polluting alternatives, especially natural gas. For most New England customers, this technology transition has resulted in lower electric bills, and we have all benefited from cleaner air. In the next few years, well-managed competitive markets are positioned to help us move to a real clean energy future that increases our use of energy efficiency, renewable resources, demand response, and innovative storage technologies.

CLF has played a key role in this process by, among other things, ensuring that coal plants are held accountable for their disastrous impacts on public health and the environment. As highlighted in an excellent op-ed in the Concord Monitor this week, CLF’s work includes our federal court case against PSNH’s Merrimack Station, New Hampshire’s biggest source of toxic and greenhouse gas emissions, which has repeatedly violated the Clean Air Act by failing to get permits for major changes to the plant.

Meanwhile, like the proverbial ostrich, PSNH gets to ignore what the market is saying. PSNH’s state-protected business model is a relic that has become a major drag on the pocketbooks of New Hampshire ratepayers and New Hampshire’s economy. Current law protects PSNH from market forces because it guarantees PSNH and its Connecticut-based corporate parent Northeast Utilities a profit on investments in PSNH’s power plants, whether or not they operate and whether or not they actually make enough money to cover their operating costs – an astounding rule for the small-government Granite State, to be sure.

The costs of this guarantee fall on the backs of New Hampshire residents and small business people, who effectively have no choice but to pay for PSNH’s expensive power. For their part, larger businesses have fled PSNH in droves, for cheaper, better managed suppliers. This has shrunk the group of ratepayers who are responsible for the burden of PSNH’s high costs, translating into even higher rates for residents and small businesses.

PSNH customers face the worst of both worlds – electric rates that are among the highest in the nation and a fleet of aging, inefficient, and dirty power plants that would never survive in the competitive market.

It is by now beyond dispute that these plants are abysmal performers. Last year, CLF and Synapse Energy Economics presented an analysis to New Hampshire regulators showing that the coal-fired units at PSNH’s Schiller Station in Portsmouth will lose at least $10 million per year over the next ten years, for a total negative cash flow of $147 million. The analysis did not depend on natural gas prices remaining as low as they are now or any new environmental costs; because it is old and inefficient, Schiller will lose money even if gas prices go up and it doesn’t need any upgrades. According to information provided by PSNH to regulators last week, PSNH’s supposed workhorse Merrimack Station will not even operate for five months this year because it would be uneconomic compared to power available in the New England market. Nonetheless, PSNH ratepayers will be paying for the plant even when it does not run.

It will only get worse: PSNH’s rates could skyrocket later this year if New Hampshire regulators pass on the bill for PSNH’s $422 million investment in a scrubber for Merrimack Station to ratepayers, and other costly upgrades of PSNH’s fleet may be necessary to comply with environmental and operational requirements in the future. And the PSNH-favored Northern Pass project, if it ever gets built, would only exacerbate the situation for PSNH ratepayers by making PSNH power even less competitive and reducing the value of PSNH power plants.

PSNH is hitting back against House Bill 1238 with its typical full-court press of lobbying and PR, and we can expect a packed house of PSNH apologists at tomorrow’s hearing. PSNH has even resorted to starting a Facebook page – “Save PSNH Plants” – where you can see PSNH’s tired arguments for preserving the current system plants as a “safety net” that protects PSNH employee jobs and a hedge against unforeseen changes in the energy market. The pitch is a little like saying that we should pay Ford and its workers to make Edsels half a century later, just in case the price of Prius batteries goes through the roof. Make no mistake: PSNH is asking for the continuation of what amounts to a massive ratepayer subsidy for as far as the eye can see.

Public investments have gotten a bad name lately, but it is at least clear that sound commitments of public dollars to energy should be targeted, strategic, and forward-thinking. They should help move us, in concert with the much larger capital decisions of the private sector, toward a cleaner energy future. Instead, PSNH is fighting for New Hampshire to keep pouring its citizens’ hard-earned money, year after year, into dinosaur power plants. That’s a terrible deal for New Hampshire, and CLF welcomes the House’s effort to open a discussion on how to get us out of it.

I will write more about the event in later posts but we wanted to get out into the world the videos of two of the keynote speeches.

Our informative and inspiring lunch speaker was Rep. Ed Markey (D-Malden MA), the Ranking Democratic Member of the House Natural Resources Committee and Senior Member of the Energy and Commerce Committee. The whole video is well worth watching and features some powerful comments about climate, the state of politics and reasons for both fear and hope.

The last panel featured a video message from Bill McKibben who was unable to follow through on his plans to come and speak because of his need to be in Washington to lead efforts to “blow the whistle on Big Oil” and how dirty energy was cheating in Congress.  But give him a listen to understand where he was and the essential imperative facing our energy system, environment, nation and world.

Overwhelming thanks to the folks at Americans for A Clean Energy Grid who did the hard work of managing the event, filming it and now hosting on their website all the videos and powerpoints from the event.

This event brings together key Federal officials from the Administration and Congress, their state counterparts, clean energy industry leaders and the environmental community and energy consumers to forge clean energy solutions that benefit our economy and our environment drawing on the full range of options from renewable energy to transmission infrastructure to demand side solutions like energy efficiency.

Please join me and others for this engaging, important conversation.

New England Clean Energy Transmission Summit

January 23, 2012
9:00am – 4:30 pm

RSVP for FREE

Agenda: Click here

The Federal Reserve Bank of Boston
Connolly Center, Fourth Floor
600 Atlantic Avenue, Boston, Massachusetts

Featuring:

Congressman Ed Markey
U.S. House of Representatives

Commissioner Cheryl LaFleur
Federal Energy Regulatory Commission (FERC)

Seth Kaplan
Conservation Law Foundation

Massachusetts’s highest court upheld the November 2010 decision of the DPU, which approved a critically important contract between Cape Wind and National Grid in which the electric utility agreed to purchase half of Cape Wind’s output. Cape Wind opponents had appealed the DPU’s decision— the latest in an endless stream of ill-fated maneuvers intended to block the nation-leading clean energy project from being built.

CLF intervened in the appeal proceeding with fellow environmental groups NRDC and Clean Power Now, making the case that the DPU’s extensively-researched decision showed clearly that Cape Wind’s benefits would outweigh its costs. Among these benefits is the project’s close proximity to areas of high electricity demand, which gives it logistical advantages over obtaining power from more distant energy projects that have been proposed.

The High Court’s validation should make it easier for Cape Wind to secure a buyer for the other half of the wind farm’s output and attract project investors to help finance construction. When built, after more than a decade of exhaustive reviews, Cape Wind will be the nation’s first offshore wind project.

Encouraged by yesterday’s decision, Jim Gordon, president of Cape Wind, spelled out some of the benefits Massachusetts residents could anticipate when Cape Wind is built, including, “creating up to 1,000 jobs, providing Massachusetts with cleaner air, greater energy independence and a leadership position in offshore wind power.”

We at CLF say, “Bring it on…not a moment too soon!”

photo credit: Witthaya Phonsawat

With the Northern Pass project on the table, as well as other looming projects and initiatives to increase New England’s imports of Canadian hydroelectric power, the region’s energy future is coming to a crossroads. The choice to rely on new imports will have consequences that endure for decades, so it’s critical the region use the best possible data and analysis to weigh the public costs and benefits of going down this road. To date, there have been almost no objective, professional assessments of the ramifications.

Today, CLF is making available to the public a technical report prepared by Synapse Energy Economics addressing a crucial issue: the potential effects of new imports on the region’s own renewable power industry. 

The report, Renewable Portfolio Standards and Requirements (PDF), explains how the Renewable Portfolio Standards (RPS) of each New England state and New York address hydropower and then examines the potential effects of allowing Canadian large-scale hydropower to qualify for incentives by allowing such power to count toward states’ goals for renewable power under RPS programs.

Vermont is currently the only state that allows Canadian hydropower to qualify for its (now voluntary) RPS. If Vermont elects to use Canadian hydropower to fulfill all or most of its RPS goal (which is contemplated by pending legislation that would make Vermont’s RPS mandatory), there would be a modest but important reduction in the incentives available to new renewable projects in the region. The report concludes that there would be a much more significant impact if the RPS programs in other states were changed to allow Canadian hydropower to qualify (as was proposed in New Hampshire and Connecticut earlier this year and is being discussed right now in Massachusetts). In that scenario, imports from Northern Pass (or import projects of similar size) would swamp the market, taking up 45% of the region’s mandate for new renewable power and deeply undermining the viability of new renewable development in the Northeast.

This finding is a new illustration of why CLF opposes changing RPS laws to count large-scale hydropower toward the region’s renewable goals, a result that would both harm local renewable projects and send incentives funded by New England ratepayers out of the country to suppliers that do not need them.

For their part, Northern Pass’s developers have downplayed any risks to local renewable energy but have refused to refrain from lobbying for and securing the very changes to the RPS laws that Synapse predicts would, when paired with new imports through Northern Pass, cut the legs out from under renewable energy based in New England. It is no wonder that it’s not only CLF sounding the alarm on this issue:  electric industry veterans like Cynthia Arcate and the trade association of New England’s competitive electric generating companies have also expressed concern.

The bottom line for CLF: any plan to increase imports will need a robust and comprehensive set of enforceable commitments – which are completely absent in the current Northern Pass proposal – for the region to ensure that New England’s own renewable energy industry will prosper and grow into the future. 

For more information about Northern Pass, sign-up for our monthly newsletter Northern Pass Wire, visit CLF’s Northern Pass Information Center (http://www.clf.org/northernpass), and take a look at our prior Northern Pass posts on CLF Scoop.

An incisive and clear essay by Peter Rothstein, President of the New England Clean Energy Council (NECEC), published on the Commonwealth Magazine website makes powerful and accurate points about the benefits of clean energy to the regional economy.  His analysis and arguments are deeply consistent with the points that CLF’s Jonathan Peress made in a recent entry on this blog outlining the benefits of the investments generated by the Regional Greenhouse Gas Initiative (RGGI) documented in a study by the Analysis Group.

Unlike the attacks on the clean energy programs that he is responding to, Rothstein backs his assertions up with facts and figures. Here is a long quotation from his essay:

Clean energy investments have many positive benefits, making our energy infrastructure more efficient and sustainable and while growing the regional economy. Though you might not know it from the headlines, the clean energy sector is one of the few bright spots in the economy, growing steadily throughout the recession – 6.7 percent from July 2010 to July 2011 alone. Massachusetts is now home to more than 4,900 clean energy businesses and 64,000 clean energy workers – 1.5 percent of the Commonwealth’s workforce. This job growth is not a transfer of jobs from other industries – it’s a net increase that results from the Massachusetts innovation economy creating new value for national and international markets, not just local.

 Clean energy is starting to grow in much the same way as the IT and biotech sectors, which took decades to become powerhouses of our innovation economy. Massachusetts clean energy companies have brought significant new capital from around the world into Massachusetts, earning the largest per capita concentration of US Department of Energy innovation awards. Massachusetts companies have also brought in the second largest concentration of private venture capital in cleantech, a sector which grew 10-fold over the last decade.

 Consumers, businesses, and the Massachusetts economy all win if we stick with policies that drive clean energy investments. The combination of efficiency and renewables prescribed by the Green Communities Act is a positive force to control costs and make bills more predictable for consumers. While the prices of natural gas and oil are anything but predictable, the impact of investing in renewables is clear and positive as these technologies continue to get cheaper. Solar costs have come down nearly 60 percent since 2008 while wind turbine prices have dropped 18 percent.

It is indeed good news that new technologies not only confront the brutal logic of climate change but also boost our economy by virtue of being sound investments.  At such times as these, we should treasure every bit of good news we find.

Merrimack Station in Bow, NH

In more than 50 pages of filings last Thursday, CLF responded to a pair of motions by Public Service Company of New Hampshire (PSNH) asking for dismissal of our Clean Air Act citizen suit now pending in federal district court in New Hampshire. That same day, CLF’s lawsuit got a major boost when the U.S. Environmental Protection Agency (EPA) filed a brief of its own, as a friend of the court, to identify the legal errors in PSNH’s key argument.

One PSNH motion challenged CLF’s right to sue PSNH to protect the environmental and public health from Merrimack Station’s illegal pollution. The other motion claimed that PSNH didn’t do anything wrong when it renovated Merrimack Station because EPA regulations allow it to make changes without permits.

In our briefs, CLF vigorously objects to both motions. You can download our briefs in PDF format here and here; our full set of filings, including attachments, is here (7MB .zip file).

PSNH’s illegal projects will increase Merrimack Station’s emissions, which will harm the health and well-being of CLF members. Under federal law, this harm means that CLF has the right to sue PSNH to hold it accountable for violations of the Clean Air Act. Because PSNH failed to get permits for its projects, PSNH violated the law. Those permits would require PSNH to install more stringent and protective pollution controls that all new plants must include, reducing Merrimack Station’s emissions of a wide range of pollutants, beyond the reductions that Merrimack Station’s expensive new scrubber (which is limited to reducing sulfur dioxide and mercury emissions) can achieve.

Incredibly, PSNH’s argument that it is exempt from permitting requirements is entirely based on EPA regulations that do not apply in New Hampshire. It’s not a close call; PSNH’s brief arguing for our lawsuit to be dismissed gets the rules 100% wrong, an astonishing error for a sophisticated company like PSNH, New Hampshire’s biggest utility.

EPA’s filing puts the final nail in the coffin for PSNH’s flawed legal argument. In a 25-page brief, EPA shows how, even if the rules PSNH is citing were the right ones, PSNH got those rules wrong too. As the author of the regulations PSNH cites, EPA explains that those regulations also would require PSNH to obtain permits before undertaking projects that will increase emissions.

It could not be clearer that PSNH’s recent renovation strategy at Merrimack Station — “build first, see what happens later” — violates the Clean Air Act. CLF will continue its fight to hold PSNH accountable for its violations as this case proceeds in the months to come.

CLF's Melissa Hoffer at the No XL Rally Washington DC

And we did—at least for now.

The Keystone XL pipeline, proposed to be constructed by TransCanada, would bring 900,000 barrels per day of toxic tar sands oil 1,702 miles across six states and through the Ogallala Aquifer—which supports $20 billion in food and fiber production in the U.S. annually—from Alberta, Canada to Texas refineries.

On Thursday, the State Department announced that it would be delaying its decision on whether to grant a key permit that would allow the Keystone XL pipeline project to proceed, stating that alternative routes that would avoid the Sand Hills in Nebraska must be studied in order to move forward with a National Interest Determination for the Presidential Permit.  The State Department also announced that it will be examining “environmental concerns (including climate change), energy security, economic impacts, and foreign policy.”  Nested in that parenthetical is a big victory for all of us who have been urging the federal government to review the project’s potential to contribute substantially to global warming pollution.

President Obama issued a statement supporting the decision noting that the permit decision could affect the health and safety of the American people as well as the environment.  Today’s decision will push back completion of the additional environmental review process until at least early 2013. Following the announcement, TarSandsAction.org. spokesperson, Bill McKibben, declared, “It’s important to understand how unlikely this victory is. Six months ago, almost no one outside the pipeline route even knew about Keystone. One month ago, a secret poll of “energy insiders” by the National Journal found that “virtually all” expected easy approval of the pipeline by year’s end…A done deal has come spectacularly undone.”  Spectacularly undone, indeed.

The movement that has built up around Keystone holds lessons for climate and environmental advocates.  This is not the environmentalism of the 70s.  Last Sunday, I traveled with a group of friends to Washington DC where I joined thousands of other Americans to form a human circle around the White House and ask President Obama to deny the Keystone XL pipeline permit.  The event was organized by TarSandsAction.org, and at the pre- and post-circle rallies, we heard from Roger Toussaint, international vice president of the Transport Workers Union, who reminded us that this is not a labor versus environment issue.  Tom Poor Bear, vice president of the Oglala Sioux Tribe, asked us to take heart in the fact that all races and men and women alike were joining together to fight this battle.  Naomi Klein (see her recent article Capitalism vs. the Climate) passionately relayed how hard people are working in Canada to stop the pipeline and its destruction of indigenous lands, and promised that if we work together and stop it here, our Canadian compatriots would stop it there; her thoughts were echoed by her countrywoman, Maude Barlow.  NASA climate scientist Dr. James Hansen, who has for decades urged action to control greenhouse gas emissions, again called for action to reduce dangerously high levels of global warming pollution before it is too late.

Physicians for Social Responsibility warned that the human health impacts we already are experiencing from climate change are significant and growing—the World Health Organization estimates that there are 160,000 additional deaths annually around the world attributable to climate change.  John Bolenbaugh, a union worker who has blown the whistle on the failed Enbridge Energy oil spill “cleanup” in Michigan, cautioned that we should not believe TransCanada’s assurances of safety, pointing out the nation’s dismal record on pipeline spills.  (Enbridge, by the way, is proposing to construct the Trailbreaker pipeline that would bring tar sands oil from Alberta to Portland, Maine via Montreal.)

Farmers in the region where Keystone is proposed to be constructed called on us to help them protect their land and the Ogallala Aquifer through which the pipeline will run, placing this precious water source at great risk of irreversible contamination.  Cherri Foytlin of the Gulf Coast spoke movingly about just how wrongly things can go—she reported that dead wildlife, including fish, dolphins, and birds, continue to wash ashore there on a daily basis, coated with oil from the BP spill, and that fresh, wet oil is washed in on the waves, while people continue to get sick from exposure to the oil and chemicals used to control it.  “Our divers who dove into the spill, “she said, “are on their deathbeds.”  Representatives of the Sierra Club, National Wildlife Federation, and NRDC founder John Adams, each spoke about Keystone’s impact on the environment, and the potential for climate change to bring about the next, and sixth greatest, extinction event in the planet’s history.

The scale of the climate emergency is paralyzing for many.  Now, we can actually see what climate change looks like, in the form of record-breaking Spring floods in 2010 throughout New England, a tornado that killed four people this spring in Western Massachusetts, the devastation wrought by Hurricane Irene (especially in Connecticut, Vermont, and Western Massachusetts), and just days ago, a record breaking late October snowstorm that left millions without power (again) as heavy wet snow snapped tree trunks and limbs, many still bearing green leaves.  These weather patterns, as msnbc recently reported, are consistent with the predicted trends for our region as the climate warms, and extreme weather is already costing us billions in response costs.  Everywhere people are talking about these unprecedented weather events, yet many still do not understand or acknowledge that climate change is the cause.  For those who do, the realization is accompanied by a bewildering sense of both the urgency and enormity of the problem, for every aspect of our modern, energy-dependent lifestyles contributes to planet-warming pollution.

But like most very difficult problems, we will solve this one step at a time, and killing Keystone is a very good step, since it will make it that much harder for TransCanada to tap and sell one of the largest remaining oil reserves in the world.  Keystone XL is the poster child for what we should not be doing.  Transportation sector emissions, for example, constitute about a third of total U.S. greenhouse gas emissions (GHG), and in New England, that sector is the fastest growing source of GHG.  We need to be moving away from high carbon fuels, like tar sands, to low carbon fuels.  Because it is such a dirty fuel source, according to NRDC, replacing three million barrels per day of conventional oil with tar sands oil would be equivalent to adding more than 22 million passenger cars to our roads. The environmental impact statement for Keystone (which did not adequately account for lifecycle GHG pollution) estimated that the project would emit in the range of 12-23 million metric tons of carbon dioxide equivalents annually—on par with the emissions from two to four coal fired power plants, according to TarSandsAction.org. Quite simply, that is obscene.

The Keystone movement is a model of what we will need to do if we are to succeed in the fight to take back our environment and restore the climate.  We will need to work together, across political lines, across the borders real or imagined that often separate us, finding and holding that common thread that weaves us together:  our knowledge that we are in the fight of our lives and our commitment to win it, whatever it takes.  Climate change is not in the national interest.

photo credit: l . e . o/flickr

With each passing day, the dire reality of PSNH’s coal-fired business model is becoming clearer in New Hampshire.  The cost of operating PSNH’s obsolete power plants continues to grow, accelerating the Company’s death spiral where fewer captive ratepayers are saddled with unsustainable above-market rates as more PSNH customers choose to buy power from better managed competitive suppliers.  We are also learning that Northern Pass will make the situation worse for ratepayers, not better, and that PSNH and its Northern Pass partners are poised to pull in huge profits.  In just the last few days:

• PSNH revealed that, as it has begun bringing online its $450 million scrubber project at PSNH’s 50 year old coal-fired Merrimack Station, the bill is now coming due. If state regulators at the New Hampshire Public Utilities Commission (PUC) approve passing the cost on to ratepayers, the energy rates for PSNH customers – already the highest in New Hampshire by a wide margin – will go up by at least 1.2 cents per kilowatt hour, or almost 15%.  CLF is seeking to intervene in the PUC proceeding on the rate increase.  PSNH, unsurprisingly, wants to keep CLF out, in addition to any other party seeking to intervene on behalf of ratepayers.  There is no better illustration of the folly – for ratepayers and the environment alike – of major new investments in coal-fired power plants than PSNH’s flawed effort to extend the life of Merrimack Station.  These investments are a disaster for ratepayers, and don’t even ensure compliance with the plant’s environmental requirements – a case CLF is making right now in federal court with regard to other modifications to Merrimack Station.
• Large commercial and industrial customers with the buying power to avoid the high rates for PSNH’s fossil power continue to do so in dramatic numbers.  PSNH announced that, in September, about 82% of these customers were buying power elsewhere in the market (accounting for 93% of the power delivered to these customers) – a phemonenon known as “migration.”  Meanwhile, more than 99% of New Hampshire residents in PSNH territory were left behind to pay PSNH’s already exorbitant rates.  The scrubber rate increase is going to make this situation even worse for residents – additional businesses will find other suppliers and PSNH will need to jack up its rates even more.  More cost-effective competitive suppliers are cleaning PSNH’s clock among large customers.  Given the company’s excessive and increasing rates, residential ratepayers are starting to vote with their pocketbooks for more sustainable energy supplies.
• It is becoming increasingly clear that the current Northern Pass proposal is designed around PSNH’s bottom line, not the interests of New Hampshire ratepayers.  As we’ve mentioned before, the large customer “migration” problem and its upward pressure on homeowners’ electric bills are likely to get worse with Northern Pass, which would further depress regional wholesale electric rates and encourage more customers to leave PSNH.   Adding in the cost of the scrubber will only widen the divide between the businesses that can choose other suppliers and potentially benefit from Northern Pass, and the residential customers who are currently  stuck with PSNH. A new wrinkle emerged last week – testimony from PUC staff showing that PSNH’s consultants estimated a year ago that Northern Pass will cannibalize PSNH’s already meager revenues from Newington Station, PSNH’s little-used power plant in Newington, New Hampshire, that can operate with either oil or natural gas.  Northern Pass would mean it would almost never run and that the investments ratepayers have made over the years to keep Newington Station operating will essentially be lost.  This same dynamic will apply to the rest of PSNH’s power plants:  Northern Pass will diminish their market value further exposing New Hampshire businesses and residents to the risk of excessive costs.  Once again, a series of poor decisions and self-interested advocacy by PSNH (at the expense of ratepayers) is forcing the legislature to intervene.

The costs of PSNH’s coal-fired power plants are becoming untenable, and a radically redesigned Northern Pass proposal and other alternatives could help PSNH meet its customers’ power needs more cheaply and with less damage to public health and the environment.  Instead of planning for a cleaner energy future, PSNH is working only to preserve its regulator-approved profits.  CLF will be using every tool at our disposal to force a rethinking of PSNH’s approach.