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.

Next week I’ll be participating in a clean energy summit in Boston that will feature Congressman Ed Markey and FERC Commissioner Cheryl LaFleur. Attendance at this event is free. Please RSVP today.

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

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.

Photo courtesy of kriswho @ flickr. Creative Commons.

If you listen to the word on street, or read the headlines, you’ll have heard that our times are hard times. Joblessness remains stubbornly high, markets remain volatile and credit is tight. Most people agree that what we need is a program to creates jobs, generates money, and reinvests each of those in our communities to make them stable, healthier and happier.

According to a study by The Analysis Group, it turns out that’s exactly what the Regional Greenhouse Gas Initiative (RGGI) – the country’s first market-based program to reduce power plant carbon emissions – has done. In its first three years, it has reduced greenhouse gas emissions, created jobs and fostered increased economic activity proving that addressing climate change is boosting the region’s economy. Simply put, efforts that increase efficiency and reduce fuel use benefit consumers, manufacturers and employers.

As the first regional program in the country, how well it is functioning is being observed by many: how much money will be generated, if any? Who does that money benefit? And, are customers bearing the brunt of this program in already hard times? The Analysis group answers these questions in full. In case you want them in short: $1.6 billion, customers and definitely not.

Outpacing now stalled negotiations on a national greenhouse gas trading program, ten Northeastern and Mid-Atlantic states formed RGGI in 1999, setting a national precedent. The importance of the program is a combined function of its timing and its location: in addition to gaining first mover position, RGGI states are both populous and productive as they account for one-sixth of the population in the US and one-fifth of the nation’s gross domestic product.

These consumers, and this regional economy, now reflects a price on CO2 emissions. And after three years, the results are in. There are a few points to highlight.

First, the program is economically and environmentally effective. As power plant owners have spent roughly $912 million to buy CO2 allowances, emissions have gone down, as a consequence of both RGGI and larger economic trends. At the highest level, then, RGGI has proven to be economically productive while meeting its emission objectives.

Given the way RGGI dollars interact with local economies – through energy efficiency measures, assistance to low income customers to help pay their electricity bills, education and job training programs, and more – the dollars have multiplier effects. Once amplified by these local and regional programs, RGGI’s $912 million in allowance expenditures “produced to $1.6 billion in net present value (NPV) economic value added to the ten-state region.”

This money has created jobs and, in turn, kept money local. By generating a market, and a need for labor, RGGI created approximately 16,000 new job-years, or about 20% of the 73,000 civilian jobs lost from September 2010 to September 2011. Moreover, due to reduced demand and investment in energy efficiency, RGGI reduced the 10 states’ payments to out-of-region providers of fossil fuels “by just over $765 million.” New England in particular benefited greatly from this program.7,200 new job-years were created in New England alone, while the region reduced its payments to out-of-region fossil fuel providers by $210 million.

So too are the benefits to energy consumers. As a consequence of energy efficiency programs implemented by RGGI funds and focused on reducing consumption of oil and natural gas heat in homes, energy consumers across the region have saved nearly $174 million through RGGI programs. Furthermore, energy consumers came out ahead of power generators. “Of the three regions, only in New England do the savings to electricity consumers outweigh the reduction in revenues by power generators,” says the Analysis Group.

This benefit is most notably due to New England’s much-higher “level of investment in energy efficiency with RGGI allowance proceeds than the other regions.”At a time when jobs are scarce and the cost of heating a home is an ever rising burden, this is undoubtedly a good thing for New England.

As our country, and New England, faces tough times our politicians and people are calling for programs that create jobs, save money, and protect our environment. RGGI does all three.

Maine has a new motto: We can get there from here.

As Washington has failed to advance clean energy legislation, and Governor LePage has expressed open hostility to the state’s renewable portfolio standards (RPS), I am reminded of that famous quip from Bert and I: “You can’t get they-ah from he-ah.” For Mainers concerned about Maine’s dependence on expensive, dirty fuels, and sincere in their interest in building a sustainable economy for the years to come, this quip has become a frustrating reality – a reality we can change, with your help.

CLF is a part of a coalition of groups from the private and nonprofit sectors, the Maine Citizens For Clean Energy, www.cleaneenergymaine.org,  that is working to enact a law by public referendum that would increase the amount of renewable energy generated in the state and increase our ability to implement energy efficiency measures that would reduce our reliance on oil and other fossil fuels, saving us money and helping our environment at the same time.

To do this, we need to get the referendum  on the ballot for state-wide vote in November 2012 by gathering more than 70,000 signatures from Maine voters by January 2012. The signs are strong: we have met with considerable early success, are ahead of our goals, and see evidence of strong support from Maine residents.

This year, on November 8^th, 28,000 Maine voters registered their interest in putting a citizen’s initiative on next year’s ballot to expand clean energy in Maine. The coalition, as Environment Maine said in their press release, had set a goal of 20,000 only two weeks before. In our current effort to collect 70,000 signatures, we are well ahead of our goals.

This should not be surprising, as polls of Maine residents have consistently shown strong support for energy efficiency. One poll, conducted by NRDC, showed “Nearly 80% of voters back the use and expansion of energy efficiency technologies.” Another, conducted by Portland-based Critical Insights and discussed by NRCM, “shows that Maine voters overwhelming oppose specific environmental rollback proposals now before the Maine Legislature.”

Groups in Maine have heard and are working to promote the interest of Maine voters. Already, CLF is working with a coalition of Maine businesses, workers, health professionals, citizens and public interest groups. We are joined by – Reed & Reed, general contractor, NRCM, and the Maine Renewable Energy Association, among others.

The message Maine voters have delivered so far is clear: We can get there from here.  We need your help.  Please sign a petition supporting the referendum or better yet, volunteer to gather signatures in your community.

This ballot initiative comes at a crucial time and allows for a broad discussion by the people of Maine as to the value of renewable and energy efficiency. If successful, the ballot measure would require that the current RPS be increased by 20 percent by 2020 and would ensure adequate funding from utilities for all cost-effective efficiency measures.

If you’d like to help ensure the passage of this ballot initiative, you can do two things.

First, help us gather signatures. If you haven’t signed the petition, please do so now.

And, secondly, if you’re willing to volunteer – more than willing to provide you with all you’ll need. Simply get in touch with us here at our Portland, Maine, office.

Help us, and our broad coalition, to deliver to Maine what voters want: expanded energy efficiency and, with it, a clean, clear path forward.

                Wouldn’t it be great if Maine law required that our power companies must save their customers money by investing in the cheapest form of energy, known as energy efficiency, while simultaneously ensuring that the sources of power sold in Maine increasingly come from clean, renewable energy sources?  If you agree, you are not alone. A coalition of Maine businesses, workers, health professionals, citizens and public interest groups, including CLF, feels the same way and we have initiated a referendum for next year’s election that will make it happen—with your help.

                To do so, our coalition will have to gather more than 70,000 signatures from Mainers seeking to place this issue on a ballot for state-wide vote in November 2012. This Election Day (tomorrow- November 8—VOTE!) keep an eye out at your polling place for folks collecting signatures on our petition and join our cause.

                What exactly are we proposing? To make changes to existing law that would require that a portion of our electricity bills fund cost-effective energy efficiency efforts throughout the state. Cost-effective energy efficiency means reducing the amount of electricity that we use, by investing in improvements to our industries, businesses and homes in a manner that saves more money than was spent on the improvements. On average, these kinds of investments save three times as much as they cost. If left untouched, Maine’s currently planned investment in energy efficiency will capture only 25% or so of the potential available savings. These are savings that will reduce everyone’s electricity bill, avoid the need for new expensive electricity lines and limit the amount of electricity that needs to be generated—let’s not squander them.

                We are also proposing that a requirement in Maine law, providing that at least 10% of electricity sold in the state must come from new renewable energy sources, should be increased so that 20% of our electricity comes from clean renewables. The effect of this requirement would be to increase the development of home-grown renewable energy projects that generate jobs in Maine while reducing our energy-related pollution. In combination, energy efficiency and increased renewables will mean Mainers pay less to the power company while doing more to preserve their quality of air and place.

                Why are we undertaking this? Governor LePage and the current leadership in the Legislature have made clear that, not only do they not support money-saving energy efficiency and the development of renewable energy, but they are attempting to scale back both from their current levels. We don’t think that approach is good for Maine and we believe a majority of Maine people agree with us. This ballot initiative allows the people to decide this issue of critical importance for our economy and our environment.   

                If you are interested in helping us in this campaign, please contact the CLF Maine office.

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.

The Land Use Regulatory Commission has begun deliberations on the Bowers Mountain Wind project, which CLF supported as an intervener.  Sean Mahoney presented a closing statement in support of the project  (Sean Mahoney Closing Statement 10-5-11) which built upon the testimony of Abigail Krich (Abigail Krich Direct Testimony 6-10-11 and Dr. Cameron Wake (Dr. Cameron Wake Direct Testimony 6-10-11).  As with many wind power projects in Maine today, the biggest issue for LURC to resolve is the project’s impact on scenic resources in the area.  The testimony of Roger Milliken (Roger Milliken Direct Testimony 6-10-11) spoke to the push and pull of that issue eloquently.  A decision from LURC on the project is expected sometime in early November.