photo courtesy of Department of Energy @ flickr.com

In the past 25 years, our lives have become increasingly “plugged in.” We have an ever-increasing number of devices in our lives, our homes, and our offices that use electricity. What is amazing is that with our foresight and work during this same time period, our region now uses energy efficiently more than ever – reducing pollution, saving money, growing jobs, and cutting through partisan politics to succeed.

That’s a regional legacy to be proud of and one highlighted in the recent op-ed co-authored by former CLF President Douglas Foy. 

With the publication of “Power to Spare”  in 1987, CLF and others set forth the effective “out of the box” thinking that allows for reduced energy consumption while increasing economic growth. As the op-ed recounts:

“Our proposition was unique: To shift incentives that encouraged utilities to sell more power, to a new model that would reward them for promoting conservation. By putting efficiency on a level playing field with coal, gas, oil and nuclear, we would be able to lower demand, cut consumption, decrease total use and reduce pollution. We promised to boost the local economy at the same time through the job intensive investments in efficiency and by reaping the economic benefits of lower energy costs.”

And it’s been a success that continues.

Massachusetts passed the “Green Communities Act” and has grown energy efficiency jobs and lowered electric costs, with average rates for residential consumers dropping from the 4^th highest to 11^th highest place.

Rhode Island recently approved an aggressive efficiency budget and is expected to meet more than 100% of its anticipated load growth with energy efficiency, not through additional polluting electricity generation.

In New Hampshire, CLF Ventures recently managed a statewide project helping communities throughout the state identify ways to reduce energy consumption and costs through greater efficiency.

Vermont has its own efficiency utility that works statewide providing one-stop-shopping for businesses and residents to reduce costs and energy use with a budget designed to achieve over 2% annual savings.

Maine now has an independent energy efficiency authority which, in 2011, obtained state-wide energy savings equivalent to the output of a 110MW power plant by obtaining $3 of savings for every $1 invested by the program.

The transformation begun 25 years ago – that we are all a part of – continues. It provides a model for the country, and a model for further action to tackle climate change.

Today marks the launch of the Coal Free Massachusetts Coalition Campaign to Phase Out Coal, Protect Public Health, and Transition to 21st Century Clean Energy. Across the state, in communities where the remaining coal plants operate, local residents and supporters have joined to call for the end of coal. The campaign issued the following statement:

It’s time to end reliance on coal-fired power plants in Massachusetts according to a new state-wide coalition of environmental, public health, faith and community groups, and elected officials. Citizens gathered in coordinated events across the state in Somerset, Holyoke, and Salem to announce a new Massachusetts campaign to protect public health and communities, renew efforts to make the transition to energy efficiency and clean renewable energy sources, and revitalize local economies to create more jobs.

Coal Free Massachusetts announced the following platform:

• Phase out all of Massachusetts’ coal-fired power plants by 2020;
• Advance energy efficiency and clean renewable energy like responsibly sited wind and solar to
  support the transition from coal electricity generation in Massachusetts
• Partner with and empower community leadership and vision for clean energy and clean-tech
  development for our host communities, including:
• Robust transition plans focused on the long-term health of the community
• Innovative opportunities for growing the green economy
• Support for workers and municipal revenues

Coal burning is highly polluting and devastating from a public health perspective. The coal burning plants in Massachusetts – Salem Harbor Station, Mount Tom (Holyoke), and Brayton Point Station (Somerset) – are the largest air polluters in the Commonwealth. In 2011, coal only provided 8% of the total energy in New England but still emitted more than 8 million tons of CO2 in Massachusetts alone. One in 10 New Englanders suffer from asthma and MA ranks 20th in mortality linked to coal plants. A 2010 Clean Air Task Force report showed that pollution from coal-fired power plants causes 251 deaths, 211 hospital admissions, and 471 heart attacks in Massachusetts every year. Nationwide more than 112 coal plants have announced retirement under pressure from local communities and efforts to protect public health. MA spends hundreds of millions of dollars annually – $252 million in 2008 alone – importing coal from other states and countries, including some places that are hostile to the US.

CLF has long worked to clean up dirty, polluting power plants, and is proud to be part of this continued effort to move Massachusetts away from reliance on coal and towards clean energy resources such as efficiency, conservation and renewable generation.  Click on the links to find out more about what CLF and the Coal Free Massachusetts coalition are doing and how you can join!

As the nation continues to move beyond coal as a fuel for electricity generation, PSNH continues to cling to its obsolete, uneconomic coal plants that need massive subsidies from ratepayers to operate. Conservation Law Foundation recently filed a brief with the New Hampshire Public Utilities Commission that blows the whistle on PSNH’s failure to meet its obligations under New Hampshire law to engage in responsible – or in some cases any — planning regarding the future operation of these plants.

New Hampshire requires that every electric utility file a biannual “least cost integrated resource plan,” which demonstrates that the utility has assessed its supply options and analyzed both the long and short term environmental, economic, and energy impacts it will have on the State. Instead, PSNH has filed a deficient plan that, by its own admission, has “very limited value” for decision-making purposes (Pg 115-116). CLF’s full brief in PDF format can be downloaded here. An excerpt:

PSNH’s business model is broken. PSNH’s energy supply cost structure is rapidly exceeding the ability and means of its ratepayers to pay, in what is now an intractable death spiral as customers migrate to competitive suppliers. The company over-relies on and has over invested in aging and uneconomic generating facilities at the expense of ratepayers and the environment. PSNH energy service customers are paying 40% or more above prevailing retail rates of other New Hampshire utility providers and the discrepancy is growing. The consequence is that hundreds of millions of dollars in above market payments are being extracted from New Hampshire ratepayers, while PSNH and its shareholders continue to benefit as if they are a low cost supplier, which the company clearly is not. The question before the Commission is whether the excessive costs being imposed by PSNH on its ratepayers and New Hampshire reflect, in some measure, the quality of PSNH’s 2010 least cost integrated resource plan (the “Plan”) and thus inform the adequacy of such planning as required by [New Hampshire law]. The Commission must decide whether lapses in PSNH’s planning materially contributed to adverse and avoidable ratepayer outcomes and the unsustainable rate spiral which will apparently require legislatively mandated cost shifting and/or lead to PSNH’s bankruptcy.

The evidence in this proceeding unequivocally demonstrates that PSNH’s planning failed to consider a multitude of material planning elements that are crucial to least cost planning. Without limitation, these include: 1) the Plan’s failure to include or consider forward price curves for natural gas which would dictate projected economic dispatch and margins; 2) the Plan’s failure to forecast customer migration which substantially informs the need for and cost-effectiveness of PSNH’s owned generation and entitlements; 3) the Plan’s failure to address or consider future environmental costs for PSNH’s generation fleet; and 4) the Plan’s failure to project forward energy service rates during the five year planning period. At the core of these planning lapses lies the question of whether and the extent to which it is in the ratepayers’ interests for PSNH to continue to own or operate its aging fossil fuel generation fleet, including the 1950’s vintage, small uneconomic coal units at Schiller Station. PSNH’s planning completely ignored the market trends which, beginning in 2008, reduced the capacity factors of Merrimack and Schiller Station to the point of being coal-fired peakers, notwithstanding the Plan’s assertion that they will remain baseload generators.

PSNH is continuing to ignore market realities, which is reflected by their failure to adequately plan for the future costs of continuing to operate its fleet of antiquated power plants. As we noted earlier this month, PSNH ratepayers are stuck subsidizing these uneconomic and dirty power plants through above-market energy costs.

Schiller Station, in Portsmouth, NH (photo credit: flickr/Jim Richmond)

If you’re looking for the most egregious example of PSNH’s poor planning, look no further than the continued operation of the two coal units at Schiller Station in Portsmouth. These two 1950’s era units operated at a loss of over $40 million between 2009 and 2010. An analysis conducted by the consulting firm Synapse Energy Economics predicted that this grim trend will only continue, and likely worsen, in the foreseeable future. These units are operating less each year, yet the cost to PSNH customers for the limited power they do produce is increasing. The report concluded that the continued operation of these units will result in future net losses and PSNH ratepayers should not be forced to pay for these shortfalls. PSNH needs to engage in a rigorous review of continuing to operate the coal-fired units at Schiller Station, as “given their age, operating costs, low reliability, and high heat rates, there is not likely to be any economic future for these units” (Pg 14).  Similarly, Connecticut’s integrated resource plan has predicted that the Schiller coal units should retire by 2015 for economic reasons (Pg B-21). Furthermore ISO-NE, the regional energy overseer, is also planning for the retirement of antiquated coal power plants, noting that these resources are facing economic challenges (Pg 9-10).

The operation of uneconomic units, coupled with PSNH’s ongoing attempt to recoup the cost of installing a $422 million scrubber at its half-century-old coal-fired Merrimack Station, boils down to increasing the energy rates for PSNH customers – already the highest in New Hampshire. This cost recovery charge, along with charges for above-market supply contracts, has led PSNH to propose a rate structure that will exceed 10 cents per kWh! As other companies enter New Hampshire to provide lower cost alternatives, the migration away from PSNH’s above-market rates has continued, worsening PSNH’s economic “death spiral.”

Why is PSNH acting this way? It’s pretty clear – like other dinosaur fossil fuel companies that have failed to anticipate the contours of a clean energy future, PSNH wants to preserve its subsidies to boost near-term corporate profits, virtually all of which are the above-market costs of PSNH power plants (including the 10% rate of return that New Hampshire guarantees). The New Hampshire Public Utilities Commission is taking note.  On June 27 it ordered PSNH “to undertake a systematic review of operation, materials and capital costs, including personnel costs, associated with the operations of its fossil fuel plants given the low capacity factors of these units.”

CLF is calling for PSNH to conduct a rigorous planning analysis to investigate whether continued operation of its antiquated coal units is in the best interests of New Hampshire. All the evidence suggests that, if credible, any such analysis would show, unequivocally, that it is (long past) time for PSNH to stop asking ratepayers to subsidize uneconomic and dirty coal power.

Conservation Law Foundation filed an Amicus (Friend of the Court) brief on behalf of Conservation Law Foundation, New England Coalition, Vermont Natural Resources Council and Vermont Public Interest Research Group in support of the State’s appeal to overturn the decision of Judge Murtha that Vermont has no say regarding Vermont Yankee.

Not so fast. As the Brief notes, the Vermont Legislature has clear authority to determine whether to allow the continued operation of Vermont Yankee. Vermont’s laws do not conflict with federal law and they are part of a decade of energy legislation focused on moving Vermont’s power supply away from older and more polluting power sources, like Vermont Yankee. 

There is a much longer history here. Vermont Yankee is a tired old nuclear plant and its owners are untrustworthy. Our brief shows that Vermont’s actions are authorized and reasonable.

“The Legislature’s track record shows that the Vermont Legislature has been passing energy legislation for years in response to constituents’ strong support for transitioning to renewable energy. Vermont engaged in the legitimate exercise of its traditional authority over power planning, including the future use of nuclear power plants. Vermont’s purposes, including planning, economics and reliability, are not only plausible, but show how the General Assembly has been preparing for the eventual closure of Vermont Yankee, whether in 2012 or thereafter, by enacting legislation, including Act 74 and Act 160, to assure that Vermont will be able to timely transition to an economical and environmentally sustainable energy supply” (pg 19)

Vermont Yankee’s troubled history also shows the validity of the Legislature’s actions. “Since Entergy Nuclear Vermont Yankee (Entergy) purchased the Vermont Yankee facility in 2002, a steady stream of mishaps, misrepresentations and disappointments shattered Vermont’s faith and trust in Vermont Yankee and its owners. From the failure to make any contributions to the decommissioning fund, followed by the collapse of the cooling towers in 2007, the proposed “spin off” of the plant to a highly leveraged subsidiary, the false statements to regulators and the broken promises of a power contract that never materialized, Entergy’s actions have had what an Entergy executive described as a “corrosive effect” on the relationships needed to maintain a major electric generating facility within the State.” (Pg 5). 

“These events evidence the untrustworthiness and lack of credibility in Entergy management that precluded the Vermont Legislature from affirming a continued business relationship with Entergy.” (Pg 23).

The Brief was a joint effort of our organizations. As organizations that have been involved in matters concerning energy legislation and Vermont Yankee for decades, our brief provides the Court with the perspective of how Vermont’s laws are part of Vermont’s broader efforts to responsibly manage energy supply. 

See Brief Here and Brattleboro Reformer story here.

We are in the midst of a massive, historic retreat in the nation’s use of coal to produce electricity, which began in 2008. This ongoing shift away from our dirtiest fuel has made news around the country. The primary reason: coal-fired power plants – expensive new facilities and decades-old dinosaurs alike – can’t compete in today’s marketplace. Investors and customers are moving toward cleaner, cheaper alternatives, principally natural gas but also renewables (especially wind) and high-tech ways of reducing energy use.

The national trend is occurring here in New Hampshire and throughout New England. This week, New Hampshire learned that PSNH is not operating its flagship coal plant, Merrimack Station in Bow, and that its economic prospects are not good. In fact, the plant will sit completely idle for six months of 2012, prompting the Manchester Union Leader to run the headline, “PSNH’s Bow power plant shuts down.” (The word “temporarily” was later added to the online story.) The two coal boilers at PSNH’s Schiller Station in Portsmouth will operate even less. (The Nashua Telegraph also took note.) This is welcome and long overdue relief for New Hampshire from New England’s top toxic polluter, and it would not have happened without legal pressure from CLF and others. More on our work in a moment.

Across the region, coal use has been collapsing for some time — and this was not unpredicted, as PSNH is claiming. PSNH’s claims to the contrary convey its willfully myopic planning perspective – a direct result of its expectation that ratepayers will cover its costs with a handsome profit irrespective of how utterly unsuccessful its investment decisions have been.

Coal-fired power plants’ “capacity factors” – their actual power output as a percentage of their theoretical maximum output at full power, running 24/7 – are intended to be very high; these plants were designed to run at close to full power day and night as “baseload” power for the electric grid. Not anymore:

In 2012, the trend is accelerating. Nationally, the U.S. Energy Information Administration reports that, in the first quarter, coal power accounted for only 36% of total generation – the smallest role for coal in a generation and down almost 9% from the first quarter of 2011. Regionally, a new milestone came in April, when the regional electric grid announced that, during the previous month, it didn’t dispatch any power from New England coal plants to meet the region’s electric demand.

For public health, air quality, the environment, the climate, and the communities where these plants are located, these trend lines are all in the right direction. For years, CLF’s Coal-Free New England 2020 campaign has fought to speed this progress and to make it permanent, by holding plant operators accountable for violating environmental laws (including at Merrimack Station), securing final and binding agreements to guarantee closure, and working in coalition with local residents to plan for responsible redevelopment and reuse of the plants’ sites.

In New Hampshire, with the complicity of state regulators, PSNH made big bets that the market for its coal-fired power will exist for years to come. One such spectacularly bad gamble was PSNH’s investment – over vigorous opposition from CLF, ratepayer advocates, and others – in a life extension project for Merrimack Station, including air pollution controls that address only some of the plant’s toxic and harmful emissions, to the tune of $422 million, plus a 10% guaranteed profit, money it now wants back from New Hampshire residents and small businesses through the regulator-approved rates it charges. Given coal’s collapse, which CLF and ratepayer advocates predicted at the time, this investment looks absurd and unwise, except of course to PSNH and its parent company Northeast Utilities, which has repeatedly reassured shareholders it is entitled to get back the full value of the upgrade, even if the plant barely runs.

Why has PSNH been so richly rewarded for such terrible economic decisions? Put simply, New Hampshire’s backward relic of a regulatory system is still protecting PSNH and its coal plants from the market. Remarkably, ratepayers continue to pay for upkeep and staffing at PSNH’s power plants, even when they sit idle, and also pay that same 10% profit on the value of all PSNH assets, including its quiet coal piles – and that’s whatever book value PSNH assigns, not market value.

PSNH has fought tooth and nail to protect its special treatment. Earlier this year, PSNH pulled out all the stops to kill a bill that would have directed state regulators to investigate whether PSNH’s ownership of power plants, including Merrimack and Schiller Stations, is in the best interest of ratepayers. After PSNH’s full-court press of lobbying, editorial board visits, and pressure from PSNH employees as well as PSNH-allied unions, politicians, and chambers of commerce, the House tabled the bill.

In the meantime, PSNH remains in an economic “death spiral” with very few large business customers to cover its costs. As a result, its remaining customers – homeowners and small businesses – are now paying as much as 50% more for power (8.75 cents per kilowatt-hour) than are customers of other utilities – which do not own power plants and get all their power from the competitive market (around 6 cents per kilowatt-hour). And the Legislature continues to seek the rollback of New Hampshire clean energy laws under the guise of easing ratepayer burdens, mistaking small trees for the forest of PSNH’s above-market rates, which include the costs of both PSNH’s idle fleet and buying power from more efficient plants.

What is CLF doing about it? Against the odds, we’re succeeding at forcing New Hampshire regulators to scrutinize PSNH’s costs, and the fact that PSNH’s coal plants are now sitting idle and the corresponding benefits to public health and the climate are a product of that scrutiny and a testament to CLF’s advocacy. And we’re pushing for regulators to do much more to hold PSNH accountable for its abysmal planning and force PSNH’s shareholder Northeast Utilities – and not suffering PSNH ratepayers, who are paying among the nation’s highest electric rates – to bear the downside of PSNH’s bad bets on coal. The last thing we should be doing with our energy dollars is subsidizing dirty power that can’t compete.

The market is providing an unprecedented opportunity to make that Union Leader headline from this week – and headlines like it for every other coal plant in the region – an enduring reality as New England transitions to a clean energy future. New Hampshire and the rest of New England should seize it.

A dispatch from the future? Manchester Union Leader headline, May 8, 2012

photo credit: Ivy Dawned, Flickr

The end of any legislative session is tumultuous. Vermont’s citizen legislature, that meets part-time only a few months each year, is no different. In this year’s end-of-session tumult, progress on clean energy was left on the cutting room floor. This is a big disappointment. The same legislature that made skiing and snowboarding Vermont’s official winter sports failed to pass legislation that would keep those sports off the endangered list.

The Vermont Legislature stripped the Renewable Energy Standard from the energy bill it approved. Renewable standards require utilities to help address climate change by providing their customers with a certain percentage of power from clean, renewable sources. The more power we get from clean sources, the less power we get from older and dirtier fossil fuel plants. Twenty-nine states, including every other New England state, already have renewable standards, but Vermont is left behind in the dark ages of dirty power.

Throughout the session, CLF worked closely with other environmental organizations, business leaders and renewable developers to put in place a meaningful renewable standard so Vermont’s electric power users can do more to reduce carbon. The urgency of the climate crisis demands strong action.

There will be opportunities to move further ahead on renewable electricity next year, along with some legislation to help heating efficiency and electric vehicles, but each year we delay means more carbon reduction is needed. It is disappointing that in a year in which Vermont saw, in the form of flooding from Hurricane Irene, the kind of damage that climate change can do, and then saw one of the warmest winters on record (which wreaked havoc on ski areas and maple syrup production), we are not doing more to tackle climate change.

photo credit: riekhavoc, flickr

Another false claim by Entergy – the owner of the Vermont Yankee nuclear facility in Vermont – is laid to rest. On Monday, the ISO-New England came out with an important determination that Vermont Yankee is not needed for reliability of the electrical grid.

This has been brewing for awhile and is quite significant since Entergy keeps claiming its tired old and polluting plant on the banks of the Connecticut River is needed for reliability. That claim is simply false.

In a filing made with the Federal Energy Regulatory Commission, the ISO New England stated:

“[T]he ISO determined that Vermont Yankee is not needed for reliability for the 2015-2016 Capacity Commitment Period. This determination is based on the expectation that certain transmission upgrades will be in place prior to the 2015-2016 Capacity Commitment Period as well as new resources which have been procured through the Forward Capacity Market.”  [see page 8-9 of this filing]

This is a very important determination and is good news for New England’s clean energy future. It shows the transformation of our power grid to cleaner sources and away from older and polluting coal and nuclear plants.

By way of explanation, the ISO New England operates the region’s electricity grid to ensure the lights stay on. It holds auctions to determine which resources will supply capacity to meet power needs in future years. This is the forward capacity auction referred to above.

What this means is that Entergy will not collect capacity payments for Vermont Yankee during 2015 to 2016.  That means that ratepayers will not be forced to prop up this tired, old, expensive and polluting nuclear plant, or its untrustworthy owners. Ratepayers will not be paying for Vermont Yankee to be available to operate.

This determination recognizes that grid improvements and new resources will keep the lights on without Vermont Yankee. Another false claim by Entergy is laid to rest. Our region moves one step closer to a cleaner energy future.

A few weeks ago I attended a conference in Washington, DC that brought together environmental groups from all over the country. In speaking with my colleagues, I was reminded of how this country is a patchwork quilt: each of us brought a unique set of challenges, a strong independent sense of identity, and solutions to regional challenges – solutions that are sometimes adopted at the national level. This certainly is true of New England.

Over the last year, two events have emphasized the importance of interregional coordination. In the process, they have reminded me of New England’s long history of regional cooperation to advance nation leading clean energy projects, and of the way in which those have been adopted on the national stage.

The first of these issues is FERC Order 1,000 – a significant reform to the Federal Energy Regulatory Commission’s position on “electric transmission planning and cost allocation requirements for public utility transmission providers” issued in June of 2010. That Order, and material explaining it, can be found on the FERC website. The new rules announced in that Order mandate that utilities operating wholesale electricity systems across the country engage in a process of regional planning. Here in New England, we have been doing that for as long, if not longer, than anywhere else in the country, so that part of the order will prompt new regional innovations largely elsewhere in the country. Another part of the order instructs regional operators of the electric grid to consider the public policy mandates of the states in their region in the planning they do for their part of the grid. The New England states have a variety of innovative policies intended to bring about a clean energy future. How our regional grid operator accounts for those in its planning is very likely to break ground for the rest of the country.

Similarly, the recent breakthrough settlement agreement by the Patrick Administration in the proposed merger between NStar and Northeast Utilities also reminded me of the need for regional coordination. Consider the scale of the proposed utility: As The Boston Globe reported, “the proposed $17.5 billion merger… would create the largest utility in the region, [and serve] nearly 3.5 million electric and gas customers from Westport, Conn., to Pittsburg, N.H., near the Canadian border.”

With a reach extending from southern Connecticut to Northern New Hampshire by way of Boston, the resulting utility has obligations under a variety of critical state policies intended to protect the environment and build a resilient clean energy economy. The right to operate as a state-sanctioned monopoly is conditioned on the utility meeting those obligations. The initial terms of the proposed merger did not meet those requirements; the merger as revised by the settlement, as my colleague Sue Reid said, “ensures that this powerful new utility will be in lockstep with Massachusetts’ nation-leading clean energy policies and propel the state forward instead of backwards in implementing them.”

This cases highlight the need for advocacy groups to be able to field their teams  on a scale and in a manner that that rises to the challenge of the moment. The NU/NStar merger required us to play on a regional scale; FERC Order 1,000 provides a chance to use the federally regulated planning process to advance critical state policies that are designed to build a cleaner and thriving New England. The challenges we face, and the institutions we engage (like utilities), are large and extend across our region and beyond, not respecting traditional boundaries. CLF must meet this challenge with size, scale, intentions, goals, and strategies that are appropriately sized to meet those challenges.

Given New England’s strong tradition of leadership on energy and environmental issues, I have confidence we have the tools required. However, as my conversations in DC emphasized, what is appropriate here in New England is not appropriate for every region.

Given the differences between the various regions of the country, and various areas within those regions, I wonder: To what extent can we successfully plot a common future? These questions are as relevant within New England as between regions.

Driving south from Acadia National Park in Maine or Hanover, New Hampshire, or east from Springfield, MA and Hartford, CT the scenery changes, the weather warms and the population becomes more dense. Though each place is in New England, each feels very different – and, if you ask someone on the street, chances are they’ll tell you just how unique and independent their town or city is. The same is true as you travel north from Atlanta or NYC to Boston, or east from Chicago or San Francisco. Within New England, as within our country, our differences can be easier to see than our shared future, but it is the latter that requires our attention.

More and more, we have the tools. That puts us in a good position to work together, town by town, region by region, for a thriving New England, and a thriving country.

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.”

For more, including quotations from said Jane Bright of HealthLink and Massachusetts State Representative Lori A. Ehrlich, as well as more background on CLF’s Salem Harbor Station Advocacy, read the press release here.