President Obama has always talked a good game on climate. But simply stating that “for the sake of our children and our future we must do more to combat climate change” is not a substitute for action. Today, the President proposed a package to step up the actions of the federal government to confront and attack this fundamental threat to our communities, economy, families and environment.

CLF applauds the President’s actions to reduce the greenhouse gas emissions that are changing our climate – emissions that damage the public health as well as our environment; harming our kids and our climate. However, we feel obliged to point out that these are simply overdue steps in the implementation of the Clean Air Act. In the landmark case of Massachusetts v. EPA the Supreme Court clearly laid out the duty of the federal government to address the pollutants causing global warming under that law.  This is not about unilateral action by the Administration:  it is about the executive branch doing its essential job of implementing the law enacted by Congress and interpreted by the Courts.

While the emissions reductions efforts the President is proposing are modest, they are very much a step in the right direction — as long as they aren’t undermined by any approval to move dirty and dangerous tar sands oil through our country.

Addressing, Not Just Feeling, the Impacts of Climate Change

The President’s plans for taking on the practical business of adapting to and managing life in a changing climate is another common sense step in the right direction. Given the real and devastating impacts of blistering summer heat, rising seas, extreme rain and snow storms on our communities and economy, this work is essential.  The focus of the Administration on climate adaptation efforts by U.S. Department of Agriculture is heartening.  It is hard to think of something more fundamental to our families and communities than food; drought and other climate change impacts are wreaking havoc on our food system, and so far, this issue has not received sufficient attention.

Building on a Record of State Leadership

By moving forward with emissions reduction measures, the federal government sets off (at last!) on a path blazed by the states that have been leaders in the effort to reduce dangerous emissions from the burning of coal, oil and gasoline.

New England, along with a few other states and regions, has been a beacon for the nation on climate and energy policy. Over the last decade New England, according to data compiled by the U.S. Department of Energy, has reduced its emissions of carbon dioxide from the burning of fossil fuels, the chief cause of global warming, by over 10%: reducing regional emissions by over 20 million tons a year.  Our emissions reductions have been accompanied by a rise in new economic investment in clean energy and technology. In Massachusetts alone, an economic survey showed the Clean Energy economy growing by 11.2% between July 2011 and July 2012 with a business census revealing 71,523 people employed at 4,995 clean energy businesses across the state.

CLF and its allies in the region are continuing to set a high bar for both the states and the feds, pushing for a Coal Free New England where our electricity comes from increasingly clean sources and is used more and more efficiently, as well as reducing emissions from our transportation system by shifting to cleaner cars, increasing transit use and building smarter and healthier communities. We must continue to pursue emissions reductions that meet the mandates of science and science-calibrated laws like the Massachusetts and Connecticut Global Warming Solutions Acts.

CLF is all about environmental solutions – and therefore we cheer the decision to further expand the aggressive development of renewable energy on federal land and federally owned, managed and financed facilities.  From intelligently and carefully sited wind farms to solar panels on housing projects to delivering on the promise of offshore wind, the time has come to go fossil free.

The Moral Duty to Act – Retreat or Surrender Are Not Options

There is no going back – the plans for emissions regulation, adaptation planning and renewable energy development unveiled today are  long-overdue steps that require aggressive action to bring to fruition. The duty to act might be invested by law in the Administration but the moral duty to protect future generations rests with all of us and we must hear the call and push our elected representatives, from the President on down, to take action.

Hardly a day goes by at CLF that we don’t think about how to describe the work we do more simply and clearly. The issues we work on are complicated; the solutions often complex and nuanced. But the need to help people understand our role and theirs in protecting New England’s environment is critical to our shared success.

This week, we launched something completely different to help educate New Hampshire residents about how their choice of electricity supplier can save them money and help the environment. The multimedia campaign, called EmpowerNH, is the creation of a newly formed coalition of retail electricity suppliers, trade and consumer groups and CLF. The coalition grew out of a common interest among this diverse set of stakeholders in promoting a competitive electricity supply market in New Hampshire. As CLF Scoop has been reporting, PSNH’s state-sanctioned practice of charging sky high rates to keep its old, dirty coal plants in business has prompted tens of thousands of residential customers to switch to competitive suppliers, who are are currently offering better rates for cleaner power. The EmpowerNH campaign aims to inform consumers about their power to choose an alternative to PSNH, and make it easy to access information and compare offers from competitive suppliers.

The centerpiece of the campaign is a short video that uses whimsical drawings and stop motion animation to tell the story of electric supply competition in New Hampshire. Take a look, and let us know what you think. And if you like it, please share it with your friends!

While harm from climate change becomes more apparent every day, EPA is dragging its feet in setting much-needed limitations on greenhouse gas emissions from new power plants. This failure is a plain violation of the Clean Air Act. So CLF recently took the first step to spur EPA into action. Working with attorneys at Clean Air Task Force, we let EPA know that if it does not act, we will sue.

Kite on Marconi Beach, courtesy of EandJsFilmCrew @ Flickr. Recent extreme weather caused significant damage at Cape Cod’s Marconi Beach.

The Clean Air Act requires EPA to issue regulations limiting emissions of air pollutants that may “endanger public health or welfare.” We know well that greenhouse gases drive climate change and therefore endanger public health and welfare in many ways: droughts pose risks to our food supply; sea level rise increases flooding of vulnerable communities; and extreme weather events threaten to wash coastal infrastructure out to sea. Nevertheless, during the early and mid-2000s, EPA all but ignored greenhouse gases. Many states and environmental groups (including CLF) sued to make EPA do something.

First, we argued, greenhouse gases are air pollutants subject to EPA regulation. Second, we said, EPA had to decide one way or the other whether greenhouse gases were dangerous; if so, the Clean Air Act imposes an absolute duty on EPA to regulate them. In a fine opinion by now-retired Justice Stevens, the Supreme Court agreed with us: greenhouse gases are pollutants subject to EPA regulation, and EPA had to decide whether they are dangerous. Two years later, EPA decided that greenhouse gases do, in fact, pose a danger to public health. This means EPA is required by law to regulate them.

After all that, EPA did begin to regulate greenhouse gases. However, it did not limit emissions from the single largest category of greenhouse gas polluters – power plants – which account for nearly 40% of the nation’s carbon dioxide emissions. If any polluters need robust regulation, power plants do. Finally, after more pushing from CLF and other environmental organizations, EPA published proposed standards for greenhouse gas emissions by power plants.

Under the Clean Air Act, these proposed standards started a clock – EPA had one year to issue final rules. Instead, EPA announced on Day 364 that the final rules would be delayed indefinitely. This delay is both illegal and wrong. EPA now has sixty days to fix its error and issue final rules that seriously address the most pressing problem of our time.

If it does not, CLF and Clean Air Task Force will turn to federal court to compel EPA to act.

Come join Conservation Law Foundation and our allies THIS SATURDAY in Burlington, Vermont for a discussion on Vermont’s Energy Choices.

Vermont’s Energy Choices: Old Dirty Problems and Clean Energy Solutions
Saturday, April 27th, 1:30 PM at the Billings Auditorium at UVM in Burlington

The time is NOW to move away from dirty sources of energy such as tar sands, nuclear, oil and coal. Solutions are available now to move us away from expensive, dangerous and polluting energy.

Come hear national and international experts on the problems of dirty energy – from fracking to tar sands – and  the real-world successes of renewable power – including community based renewable power in Europe.

Throwing up our hands is not an option. Come find out how to make a clean energy future our reality.

You can sign up and more information here:  See you Saturday!

Mount Tom power plant in Holyoke, MA.

A familiar story appears to be unfolding at the Mt. Tom coal plant in Holyoke, Massachusetts. According to recently released documents, the owner submitted what is known as a Dynamic Delist Bid with ISO New England (ISO-NE), the operator of the New England electricity system and markets, and ISO-NE accepted the bid.

This means that during the 2016-2017 capacity commitment period the plant will not be obligated to run and will not receive any capacity payments. The plant could still run and be paid for the electricity it makes, but the act of de-listing means that Mt. Tom’s owner thinks there is a significant chance it will not be economic for the plant to run during that year.

This is not surprising given the sharp decline in how often the plant has been running over the past few years:

This news is particularly significant for two reasons:

• First, submitting a de-list bid to leave the market for one year has been the first step on the path to retirement for two other coal-fired plants in Massachusetts, Somerset Station and Salem Harbor Station;
• and Second, the fact that ISO-NE accepted the de-list bid means that it determined that Mt. Tom can exit the capacity market for that timeframe without any impact on reliability. That’s a good indication that Mt. Tom could permanently retire without impacting the system, although some additional analysis would need to be done.

Although this is welcome news, because it means the end of a long legacy of pollution, it is not surprising. Even Brayton Point, New England’s largest power plant is facing desperate financial circumstances. Coal-fired power plants have been faltering across the country over the last two years, and CLF, Coal Free Massachusetts and local allies have been warning that Mt. Tom is not only a polluting, outdated relic but that it is also an unprofitable, unstable source of revenue for the City of Holyoke and that now is the time to plan for a cleaner, brighter future.

A task force created to examine the issue of retiring, demolishing, and eventually redeveloping the sites of aging coal-fired power plants in the Commonwealth will be visiting Holyoke on March 6 for a meeting with ISO-NE and a tour of the Mt. Tom plant.  CLF and its local allies are urging the task force to open this meeting to the public and to solicit more public input on the process.  Thus far, although meetings have been open to the public, there has been little effort to engage local community members.  Engaging the public is critical to an open, fair, transparent process that will create results that the entire community can get behind.

Just how much financial trouble is Dominion facing at its 50-year old coal and oil-fired power plant? The prospects are bleak and looking worse. For years, people have assumed that the largest coal-fired power plant in New England could weather any storm, but the numbers show that Brayton Point is facing dark days, and the clouds are not likely to lift.

Brayton Point Capacity Factors from 2007-2012

Today, Conservation Law Foundation released an independent analysis of the financial performance of Dominion Resources’ Brayton Point power plant in Somerset, Massachusetts. The report, authored by the Institute for Energy Economics and Financial Analysis, projects a bleak future for the 50-year-old coal-fired facility. Entitled Dark Days Ahead: Financial Factors Cloud Future Profitability at Dominion’s Brayton Point, the report found that the once profitable power plant’s earnings before interest, taxes, depreciation and amortization (EBITDA) are plummeting due to a perfect storm of market conditions that are projected to continue at least through the end of the decade.

The report shows that those conditions make it unlikely that Brayton Point will ever recoup its recent $1 billion investment in upgrades to the facility, or return to profitability.

“Brayton Point is looking at losing money for the foreseeable future,” said David Schlissel, who co-authored the report with financial expert Tom Sanzillo. “The market conditions have changed and are continuing to change for old coal plants. There is nothing on the horizon that shows that this power plant will be able to return to financial health; in fact, even the most optimistic scenario shows that Brayton Point cannot produce earnings that would cover its costs and produce a return for equity investors at any time through 2020.”

Sanzillo added, “The forecast for Brayton Point is indicative of what’s happening all over the country. We are seeing the owners of these 50-year-old coal-burning facilities facing do or die decisions about their futures, with hundreds having already announced their plans to retire in the next few years and more going that route every month. Brayton Point’s current experience – bleeding money and owner Dominion Resources having already written off $700 million of its $1 billion investment in upgrading the plant – and its bleak outlook clearly show that continuing to operate this plant doesn’t make economic sense.”

A Perfect Storm of Changing Conditions Sends Earnings Plummeting

The report points to a set of changed conditions that together are putting severe downward pressure on Brayton Point’s earnings, which dropped from $345 million in 2009 to an anemic $24 million in 2012, a decrease of some 93 percent:

• Natural gas prices have declined significantly since 2008 and are expected to remain low for at least the remainder of this decade.
• Wholesale energy market prices have decreased In response to the declining natural gas prices, , meaning reduced revenue for coal plant owners and reduced generation at coal plants like Brayton Point.
• Meanwhile, prices for capacity have been also been declining with a 35% decrease in the price obtained in the Forward Capacity Auction in 2012 as compared to the price for 2010.
• Additionally, energy usage in ISO-NE decreased by 2-3 percent between 2008 and 2012 as a result of the economic downturn and increasing energy efficiency efforts.

Future Profitability is Unlikely

The report provides two extremely conservative scenarios of future performance: an “optimistic scenario,” in which generation from Brayton Point coal Units 1-3 is projected to rise to a 60% capacity factor through the years 2013-2020, and a “less optimistic” scenario, which assumes that the units’ generation will not exceed 40% for any year in the period. In 2012, Brayton Points Units 1-3 operated at an average 16% capacity factor. Thus, the report says, earnings from those units could be much lower than projected in the two scenarios modeled. “In no way have we looked at a ‘worst case’ scenario,” noted Mr. Sanzillo.

In both scenarios, based on forward-looking conditions, the report shows that it is unlikely that future energy market prices, ISO-NE capacity market prices, plant generation and coal prices will lead to earnings high enough to provide its owner with adequate recovery of capital or return on investment. The report’s conclusions are based on projections that show that it is reasonable to expect that for the remainder of this decade, at least:

• Energy market prices in New England will remain low, reflecting continuing low natural gas prices.
• Energy consumption in New England will remain flat while consumption in Massachusetts may decline.
• Bituminous coal prices will increase over time.
• As a result, the generation at Brayton Point Units 1-3 is not likely to reach the high levels of performance achieved by the units through 2009.
• Future New England capacity prices are not likely to increase significantly.

On the longer horizon, from 2020 on, the report points to increasing pressure to place a significant price on carbon emissions from fossil fuel-fired power plants, and the plant’s age, as additional factors that will likely weigh on the plant’s earnings.

N. Jonathan Peress, VP and director of Conservation Law Foundation’s Clean Energy and Climate Change program, commented, “Brayton Point, like many other old coal plants in New England and around the country, is at a tipping point. Dominion has already made a losing investment in trying to make this plant viable beyond its useful life. Now, Dominion and its shareholders need to decide whether to keep pumping money into Brayton Point with little chance of a return, as this analysis clearly shows, or to let it go. This report provides compelling evidence for the Town of Somerset, which has been seeing its tax revenue from the plant decline in recent years, to begin planning for Brayton Point’s retirement, and a healthier future for that community in all respects.”

New England, I'm pleased to say, was well represented at the climate rally in DC this weekend.

“People get ready, there’s a train a-comin’.”  Curtis Mayfield.

Before 50,000 committed supporters, from many states and nations and braving frigid wind-chill temps, Bill McKibben announced on Sunday that all of the work he has done for the last 25 years has been in hopeful anticipation of that moment. The moment when the Climate Movement actually took off.

It certainly felt like a fully loaded train with a big head of steam, on a long journey. It was full of people who have gotten more than ready for the trip, and it was a wide-open, broad and inclusive group. Emcee’d by the Rev. Lennox Yearwood, President of the Hip Hop Caucus, speakers ranged from Van Jones (author, former Obama aide and Pres. of Rebuild the Dream) to Chief Jacqueline Thomas (a First Nation Chief in British Columbia) to Maria Cardona (Founder, Latinovations) to Michael Brune (Sierra Club Exec. Director) and U.S. Senator Sheldon Whitehouse (D-RI). The crowd was the same – young and old, people of all colors, people of faith and non-believers, northerners, southerners, mid-westerners and westerners, people walking and in chairs.

New England, I’m very pleased to say, was well represented, including large delegations from VT, NH and MA (and I’m sure from RI, ME and CT, but I didn’t find them in the large crowd), and topped off by a rousing address from Senator Whitehouse.

Senator Sheldon Whitehouse (D-RI) delivering a rousing address to the crowd.

As Rev. Yearwood put it, “we’re fighting for existence.”

That is not an understatement. Climate models (increasingly showing their accuracy over time, if not underestimation of warming effects) show that unchecked, increasing warming will render large parts of the planet uninhabitable by mammalian life within the next few centuries. If the greater good of humanity (and other species) is not our polar star now, we are failing in our jobs as human beings: to paraphrase Curtis Mayfield again, there is no room among us “for those who would hurt all mankind, just to save [their] own.”

To address a problem that large, it takes a movement. Kudos to Bill McKibben and 350.org, Michael Brune and the Sierra Club, and all of the other groups that have organized, coalesced and launched this train. History will remember them well.

This movement needs to support savvy, well-planned and strategic actions. Sunday’s rally was wisely focused on the Keystone XL pipeline, over which President Obama has unique discretion, under applicable law. While the facts are clear on this one (James Hansen: “game over” for climate if KXL gets built), it is a hugely political game. Circling the White House, calling the President out on his recent commitments to act on climate, playing the political game as it is played, is needed for this vital decision.

But not all vital actions on climate change are like that. We certainly need people in the streets, in villages and barrios, on college campuses and in cornfields and in automobile assembly plants. This is the lifeblood of the movement. But we also need lobbyists and lawyers, economists and highly focused activists, scientists and doctors and investment analysts and progressive regulators – all working the system that shapes our economy.

Shutting down New England’s coal plants, for example, will not happen by marching alone. There is nobody who can do that with the stroke of a pen, as the President can on KXL. Rather, there are many skirmishes and battles to be fought, against extremely entrenched interests who will only succumb when faced with final, non-appealable orders, or when it’s clear they’ll lose more money than their shareholders will accept. The same is true for many fights in the climate campaign: ensuring that any transmission for clean energy is built on the right terms, guarding against overbuilding natural gas infrastructure, fully and properly regulating any fracking activity that is deemed acceptable, adjusting energy markets so that clean energy is favored and dirty energy is disfavored, rebuilding our communities so people don’t need cars as much and can live healthier lives, and many, many more.

“Forward on Climate” is the charge. All the rest is commentary, so to speak. But the commentary – as the Talmudic story goes – is where the work is. We actually move forward by studying and sweating the details, and it takes a long, sustained effort. We’ve been here before. Equal Protection of the laws – what does it really mean? For almost 150 years we’ve been working that out, and paying for it with blood and hopes, dreams and treasure. And lifetimes of effort. Restoring our planet’s climate to some sort of balance – equitable, healthy and just – is another, long-term struggle.

Please join us for this historic journey. Join Conservation Law Foundation. Join other organizations committed to this pivotal fight. We all need your help. And we’ll need it for generations to come. And for their benefit and very survival. “There’s no hiding place” against what we have wrought.

How are PSNH’s coal plants like Mark Sanchez? (photo credit: flickr/TexKap)

Earlier this week, the Concord Monitor published a must-read editorial addressing PSNH’s future. Much like an earlier widely-printed op-ed on the subject, the editorial correctly describes the PSNH death spiral of escalating costs, fleeing customers, and dirty inefficient power plants kept alive by massive ratepayer subsidies.

The editorial also points out one key reason why PSNH’s argument that its plants are an insurance policy against high natural gas prices is increasingly off the mark: it ignores the damage that those plants do to the climate and to the environment. In 2012, despite not operating for much of the year, PSNH’s plants were nonetheless collectively the single largest source of greenhouse gas emissions in New Hampshire.

As time goes on, PSNH’s “insurance policy” argument only gets more specious. Relying on inflexible power plants that take many hours to start up and shut down is diametrically at odds with the dynamic and advanced electric grid that will help New England move toward a clean energy future and address concerns around the region’s increasing use of natural gas. We know what we need to do: the region needs to reduce energy demand through cost-effective energy efficiency investments, to deploy clean renewable technologies like wind that displace fossil fuel use, and to optimize the rules of the wholesale electric market to ensure smooth operation of the grid. Indeed, regional grid operator ISO New England’s recent market design efforts will almost certainly make poor-performing, inflexible power plants like PSNH’s less competitive, not more.

Propping up outdated physical assets – with high fixed maintenance costs – in the hopes that they will someday become competitive again is not “insurance.” It’s the kind of backward thinking that no competent manager or economist would endorse.

As a matter of policy, PSNH’s strategy enacts the classic economic mistake of “throwing good money after bad” by placing too much emphasis on “sunk costs,” an unfortunately common problem that James Surowiecki recently discussed in The New Yorker in describing the irrationality of sports teams’ commitments to ineffective players, like the Jets’ Mark Sanchez, after years of poor performance and bloated salaries.

At least sports teams suffer the consequences of their choices – they lose. With guaranteed profit and regulator-approved rates to recover its costs, PSNH and its parent Northeast Utilities have continued to win, even after a decade or more of terrible investment decisions. Unless of course PSNH can be made to pay for the mess it has created.

The key paragraph of the Concord Monitor’s editorial argues precisely this same point:

[L]awmakers must ensure that the lion’s share of the loss is incurred by investors in PSNH’s parent company, Northeast Utilities, not by New Hampshire ratepayers. That includes the huge cost of the mercury scrubber. It was investors, after all, who gambled that it made sense to spend hundreds of millions of dollars to keep an old coal plant running. They could have said no. So it’s investors who should lose if that gamble doesn’t pay off.

As PSNH looks for opportunities to spread its costs to the New Hampshire businesses and households that have escaped PSNH’s high rates, this is timely advice for New Hampshire policymakers. They should heed it.

photo credit: TimothyJ/flickr

Today, the New Hampshire Public Utilities Commission takes up PSNH’s request to charge its customers 9.54 cents per kilowatt hour for electric energy service in 2013. In a op-ed published this week, long-time CLF friends Ken Colburn and Rick Russman explain why New Hampshire’s crisis of escalating PSNH rates – and how New Hampshire policymakers resolve it – may be the defining economic issue for New Hampshire’s new class of leaders next year.

With PSNH’s rates to be by far the highest in the state and almost three cents higher than those of its sister utility NSTAR in Massachusetts, New Hampshire is dealing with an untenable situation: small businesses and residents are subsidizing PSNH’s above-market costs to operate and maintain dirty, inefficient, and uneconomic coal plants, to the tune of $128 million.* The average residential customer will pay $212 extra in 2013 for the dirtiest energy in the region.

To put $128 million in perspective, in 2011 New Hampshire invested less than a seventh of that amount, a mere $17.6 million, in electric energy efficiency programs – an energy solution that is lowering rates, reducing pollution, avoiding expensive new transmission projects, and creating jobs.

New Hampshire energy users are in effect giving this money away to keep alive New Hampshire’s biggest sources of toxic and greenhouse gas pollution (even though PSNH projects they will only operate at around 25% of their capacity in 2013) and to pay dividends to PSNH’s owner, New England mega-utility Northeast Utilities. And the situation will only get worse with time as PSNH customers join the thousands who have already picked an alternative energy supplier, leaving a shrinking base of customers to bear the heavy costs of PSNH’s coal fleet. (If you’re still a PSNH customer, you should definitely make the switch before the new year begins and PSNH’s new rates kick in.)

The blame for this economic and environmental travesty lies squarely with PSNH’s self-serving failure to plan for the future.

Yet PSNH is already trying to make the case that it needs a “fix” from the New Hampshire legislature to protect its coal plants, its 10% profit margin guarantee, and its protection from cleaner, cheaper competition. What’s even more bizarre – and indicative of its refusal to approach these issues honestly – is that PSNH is pinning its skyrocketing rates on the very factors that have reduced electric rates for everyone else in New England – namely, investments in energy efficiency and environmental protection and the increasing use of natural gas and competitive renewable energy sources. PSNH’s foolhardy but lucrative investments in its outdated power plants – for which it fought tooth and nail over the last decade – are the culprit, not environmental requirements that apply to all power plants in New Hampshire and across the region.

Please take a moment to read the op-ed and share widely with friends, neighbors, and especially your new representatives in Concord. For the good of the state’s economic and environmental health, they need to hear from you!

*  The math: PSNH customers will pay a 2.85 cent “premium” for every kilowatt hour over and above PSNH affiliate NSTAR’s market-based rates, and PSNH is projecting that it will sell more than 4 billion kilowatt hours of power to its remaining customers in 2013. The average household in New Hampshire uses 7,428 kilowatt hours per year.

PSNH's Merrimack Station