Earlier this week, I brought a message from New Hampshire to a gathering of major players in the Northeast’s energy industry in lower Manhattan, the Platt’s Northeast Energy Markets Conference.

(photo credit: flickr/Mathew Knott)

Remember Northern Pass, that novel Northeast Utilities transmission project that would import 1,200 megawatts of large-scale hydropower from Hydro-Québec?

The project, as it was conceived and pitched to the region and the industry, Northern Pass version 1.0 if you will, is dead.

I ran through the key financial elements of the original proposal, what I called the Northern Pass gambit:

• $1.1 billion to build a new transmission line, funded wholly by Hydro-Québec.
• A generous “return on equity,” or guaranteed profit on project costs, of 12.56% for project developer Northeast Utilities, paid by Hydro-Québec.
• Easy and inexpensive siting approvals for the line, which would be located solely in New Hampshire, mostly in corridors controlled by Northeast Utilities subsidiary Public Service of New Hampshire, the state’s largest and most powerful electric utility.
• Ample profits that would cover all Northern Pass costs and much more for Hydro-Québec, which would sell its hydropower in New England’s lucrative wholesale electric market, where energy prices were, in 2008 and 2009 when Northern Pass was conceived, orders of magnitude higher than Hydro-Quebec’s costs of generating power.
• Unlike New England-based renewable projects, no public or ratepayer subsidies.

These elements looked good to investors on paper. But they have, one by one, fallen apart, and they no longer add up. I took the audience through the Northern Pass reality:

• Years of a stalled siting process, as Northeast Utilities tries to purchase a new route for the northernmost 40 miles of the project, where PSNH has no transmission corridor, with repeated missed deadlines for announcing the new route and restarting the federal permitting process.
• Increasing costs – an estimated additional $100 million in project costs already, even without accounting for any new route, mitigation commitments, or any underground component.
• Growing doubt (even more pronounced than a year ago) that Hydro-Québec can recover Northern Pass development costs and its hydropower costs (which will only increase as costly new dam projects continue in northern Québec) through energy exports, given that wholesale energy prices in New England are now much lower.
• Opposition by the vast majority of communities affected by the project, 33 at last count, local chambers of commerce, political leaders, and a diverse, well-organized grassroots movement of residents.
• No support from any New England environmental group.
• Mounting risk to NU’s lucrative return on equity, with the underlying deal expiring in 2014, and any renewal subject to federal regulators’ recently more skeptical view of such incentives.

And finally, I gave the eulogy for the key financial element of Northern Pass 1.0 – the one that attracted so much interest in regional energy circles, was the project’s key distinguishing feature from New England renewable energy projects, and continues to reside within the project’s discredited and misleading media campaign: the promise that the project would not require any subsidies.

In the last several months, as CLF predicted, Northeast Utilities, Hydro-Québec, and their allies have launched a major initiative to secure out-of-market subsidies of one form or the other for Canadian hydropower.  These efforts are now raging in the legislatures of Connecticut and Rhode Island and are simmering in other New England states. CLF is deeply engaged in protecting our state Renewable Portfolio Standard laws from this incursion and in turning back any long-term deals that will supply Canadian hydropower to these states at above-market prices or in a way that threatens renewable deployment in New England.

To us and to others, the false urgency associated with these proposals seems transparently calculated to advance a “Northern Pass 2.0,” just as Northern Pass 1.0 falls apart.

What would Northern Pass 2.0 look like? On the ground, whatever the “new route” New Hampshire continues to wait for, it will almost certainly look the same as Northern Pass 1.0, suffering from many of the same failings. But there will be some key differences, as the project’s underpinnings shift to accommodate a new economic reality. It will rely on public and/or ratepayer subsidies that will mean that New England will pay an above-market premium for the power or will provide an out-of-market gift of long-term energy price certainty to Hydro-Québec, in part to finance the associated transmission. In addition, many in New Hampshire’s North Country believe that the project will need to be sited on public land that is legally off-limits to circumvent the strong, ongoing efforts of the Society for the Protection of New Hampshire Forests to secure blocking conservation easements – in effect, another public subsidy for the project that will face overwhelming pushback in New Hampshire. (Clearly, Northern Pass’s dogged legislative fight to secure an ability to use eminent domain for the project, which it lost in resounding fashion in 2012, was only a preview of coming tactics.)  

As CLF has consistently said, there may be appropriate alternatives to Northern Pass that strengthen New England’s access to Canadian hydropower resources, but only if those alternatives are pursued through well-informed, fair, and transparent public processes, provide meaningful community and ratepayer benefits, displace our dirtiest energy resources, and verifiably result in carbon and other emissions reductions. It does not appear that the emerging Northern Pass 2.0 – buoyed by a set of special deals and no discernible improvements – would do anything to advance these basic common sense principles, which should guide the region’s transition to a resource mix that will power New England’s clean energy future.

With few signs that Northern Pass’s sponsors have learned lessons from their missteps so far, Northern Pass 2.0 looks to have an even tougher path in New Hampshire than the dead end road that Northern Pass 1.0 has traveled. This was a message from the Granite State that the world of energy industry insiders and analysts needed to hear.

As New England’s leading environmental organization, CLF has more than 60 staff people who work every day for healthy communities, clean water, and to reduce carbon emissions that cause climate change.

Sometimes we win big victories that make headlines, like when my colleague, Shanna Cleveland, won a major victory in federal court that required the permanent shuttering of the Salem Harbor coal-fired power plant. You can see more about Shanna’s victory here; and you can learn more about CLF’s coal-free New England program, here.

Other times, CLF’s work is much quieter, and behind the scenes, in obscure forums that no one has ever heard of. And CLF sometimes accomplishes good things very quietly.

I recently participated in one of these quiet victories. CLF is an active, voting participant in the New England Independent System Operator (ISO-NE), the operator of the regional electricity system. You can read more about CLF’s work with ISO-NE here. Very few environmental organizations participate in this important forum and, of the few that do, CLF is by far the most active.

One of the things that the ISO is most concerned about is the “system reliability” of New England’s electricity grid. System reliability basically means that when you or I turn a light switch, the lights actually go on. No one wants to see power outages or blackouts, and the ISO’s concern with system reliability is sensible.

One of the things the ISO has been doing of late to improve New England’s “system reliability” is to encourage the owners of gas-powered electricity-generating plants to install dual-fuel capability that would allow those plants to burn oil during periods of natural gas shortage – that is, allow those plants to be more reliable. Part of the ISO’s plan was to make sure that, when such a gas shortage arose, these power-plant owners could and would get compensated properly for burning oil, which costs much more than natural gas.

Of course, burning oil to make electricity is also much, much more polluting than burning natural gas. And the way the ISO was going to structure this new system would have provided no reason for generators to burn gas when gas was actually available – because those generators would be fully compensated regardless of which fuel they burned.

CLF reluctantly accepts that some of these generators will burn oil on those very, very rare occasions (at most a few times a year) when cleaner fuels truly are not available. (Of course, an even better idea is to reduce demand by efforts like turning down electricity use in places like factories and large stores; and CLF has long worked to promote programs that pay for and encourage such “demand response” efforts.) And such burning of oil is always limited by the air-pollution permits (under the Clean Air Act) of the generators. At the same time, CLF wanted to make sure that ISO rules would never allow compensation to an electricity generator for burning a dirtier fuel when a much cleaner fuel actually is available (which is nearly always).

None of the ISO experts realized the potential danger of the ISO’s proposed rule change at the time it was being discussed. None of the electricity generators pushed to prevent the originally proposed rule change from going through. Why would they? They were going to get fully compensated for burning a dirty fuel even when a cleaner fuel was available!

But CLF noticed the problem, and was willing to push for a change. As of this writing, I am cautiously optimistic that our proposed change will be approved by the ISO (and later by the Federal Energy Regulatory Commission, or FERC, that oversees and must approve ISO rule changes). The change that CLF pushed for would allow electricity generators to get compensated for burning a higher-priced, dirtier fuel only on those very rare occasions when cleaner, cheaper fuel is truly not available.

Ratepayers benefit because we are assuring the use of the lower-cost fuel whenever possible. And the environment benefits because we are assuring the use of the cleaner fuel whenever possible.

As I say: this was certainly a small victory. But if we are going to be able to address the threat of climate change successfully, it will take hundreds of victories in a variety of forums. Some of those will be big wins, like Shanna’s federal court victory in the Salem Harbor case. And others will be small, incremental steps in obscure forums like the ISO.

This week, the developer of the Northern Pass transmission project, Northeast Utilities (NU), sunk to a new low. In a presentation at a utility industry conference, NU CEO Tom May stated that:

• “[T]his project has the support of every environmental group in New England basically.”

This is unequivocally untrue. In fact, CLF is not aware of a single New England environmental group that supports the Northern Pass project as proposed. You don’t have to take our word for it: literally dozens of New England’s environmental organizations – regional, state, and local – have registered significant concerns with, or outright opposition to, the proposed project in public comments to the U.S. Department of Energy. May’s statement is all the more puzzling given the energy that NU has devoted to attacking the efforts of groups like CLF (e.g., here and here), the Appalachian Mountain Club (e.g., here), and the Society for the Protection of New Hampshire Forests (e.g., here).

• The regional electric grid operator, ISO-NE, has been a “big proponent of this project.”

This is also inaccurate. Northern Pass is an “elective” transmission project that is not intended to address any electric grid needs identified by ISO-NE. As a result, ISO-NE is obligated to consider the project objectively alongside competing elective projects (of which there are several), and Northern Pass is not specifically endorsed in any of ISO-NE’s planning documents, such as ISO-NE’s recently released 10-year Regional System Plan for the New England electric grid. Because it is an elective project that ISO-NE didn’t ask for and doesn’t plan to rely on, ISO-NE’s primary role in reviewing Northern Pass will be to assure that it won’t have an adverse impact on the reliability of the grid, not to advocate for the project.

• New Hampshire’s new governor-elect, Maggie Hassan, is “supportive of the project.”

Governor-elect Hassan’s website contains this statement to the contrary:

Maggie opposes the first Northern Pass proposal.  As a state senator, Maggie worked to pass a constitutional amendment to prohibit the use of eminent domain for private gain, and she opposes the use of eminent domain for this project.

Maggie believes that we must protect the scenic views of the North Country, which are vital to our tourism industry.  As Governor, she will ensure that, in accordance with the law, New Hampshire undertakes a rigorous review process of any proposal and provide significant opportunities for public voices to be heard.

Maggie hopes that the next proposal will address the concerns of the communities involved.  She believes that burying the lines would be a more appropriate approach, and also supports looking into home-grown energy sources, such as the new biomass plant under construction in Berlin.

Governor-elect Hassan has also expressed her support for Governor Lynch’s approach to the project: namely, that the directly affected communities must support the project before it moves forward. With almost all the communities on the record opposing the project (and no willingness on the part of Northern Pass’s developer to consider burial as an alternative to overhead lines), it’s impossible to characterize Governor-elect Hassan’s position as support for the project.

(May’s remarks on Northern Pass are at 21:00 – 25:30 in the webcast linked here.)

Since the Northern Pass project was announced more than two years ago, CLF has identified significant problems with the proposal, including the developer’s egregiously misleading marketing of the project’s environmental attributes and other supposed benefits. CLF has repeatedly emphasized, in the words of our President John Kassel, that “long-term supplies of hydro, wind and other sources of power – that respect and significantly benefit the landscape through which they are transmitted, support rather than undermine the development of New England’s own renewable energy resources, replace coal and other dirty fuels, keep the lights on at reasonable cost, and accurately account for their impacts – are what New England needs.” Thus far, the Northern Pass project, as proposed, meets none of these criteria, and therefore is not a project CLF can support.

Beyond our specific concerns, we’ve been fighting for some basic principles that should not be controversial, such as transparency, fairness, and especially honesty. Again and again, NU has unfortunately refused to abide by these principles, repeating discredited claims about the project’s emissions reductions and outdated accounts of other benefits, marginalizing the many stakeholders raising legitimate questions about the project, and employing bullying tactics against project opponents (for the most recent example, see here).

As we explained more than two months ago, Northern Pass still has no clear path forward. In concocting a story of broad-based political and stakeholder support, NU is – deliberately or recklessly – misleading its investors with plainly false information: an unacceptable breach of NU’s legal obligations as a public company and of investors’ trust. It is incumbent upon NU to correct the record immediately and to jettison its aggressively deceptive approach to securing approval of the Northern Pass project. The public deserves far, far better.

Back in the 1970′s the satirical and surreal Firesign Theater proclaimed that “Everything You Know is Wrong.” At the intersection of energy and economics, that absurdist assertion is a increasingly obvious reality that advocates, policy makers and industry must embrace.

Throughout history, there are moments when prior assumptions and core beliefs have simply stopped being accurate. Great examples include people discovering that the Earth is round, microscopic organisms cause disease, and that various substances (tobacco, asbestos, particles produced by diesel engines) are harmful. To paraphrase what John Maynard Keynes may or may not have said, when confronted with changed facts the intelligent person changes their perspective, assumptions and opinions accordingly.

In the wonky, but critically important, world of energy systems no assumption has been more ingrained than this: “over the long term, energy demand grows over time — and that the only time it stays steady or declines is when the economy is in crisis and not growing.” But this “truth” that “everyone knows” is increasingly obviously wrong: we can grow while using less. Indeed, sometimes we can do better and grow because we’re using less energy.

The good folks at the Andersen window factory in Minnesota agree with this realization that the old conventional wisdom is wrong: a recent newspaper column documenting the experience of Andersen Windows described how even though “Andersen is making and selling more of its products . . . it’s using less energy. They’ve done it by changing light bulbs, upgrading equipment, and educating employees about energy conservation.”

Here in New England we have a strong record of planning and implementing energy efficiency and it is paying off in the same way. That is the clear assessment of the sharp-penciled engineers at ISO New England (the folks who operate and plan our regional electricity system), as presented in the graph below from the final report of a working group that CLF participated in. It may seem like heiroglyphs, but let me explain.

In the graph below, ISO-NE (as it is know) presents three energy futures: the blue line is the traditional forecast of expected growth in energy demand tracking expected economic expansion, the “load growth” that traditional models expect when the economic grows. This is then adjusted in the red line to reflect energy efficiency and other demand resources that have been recognized (and purchased) in the regional  electricity markets, reflecting the past wise decision to allow such resources to participate in those markets. Finally, the forecast is then further adjusted in the black line to reflect the plans and programs for efficiency and alternative energy being undertaken by the New England states.

Credit: ISO-NE

What you see in the flat, black line is economic growth without growing energy demand. You see the kind of growth being undertaken at Andersen scaled to an entire region.

In a quiet way this is a revolution — a clear recognition that new wind turbines, solar panels, or gas fired power plants will replace existing old and dirty oil and coal fired power plants as they retire, not to meet rising demand.  This is a stunning reality and success: the increasingly successful efforts to foster efficiency have ended the upward march of energy demand, allowing our economy to grow without increasing electricity demand.

Let us now hope that, as the facts change, people and organizations change their beliefs, perspectives and plans accordingly.  Building and buying energy infrastructure must continue – but it can no longer assume rising demand. Our investments must be smart, targeted and build towards a cleaner, and thriving, future where we have squarely and honestly addressed our climate crisis and the challenges of economic growth. Getting this right is one of the most positive aspects of what Bill McKibben has described as the “terrifying new math” that global warming mandates – this is a real life example of where we are headed in the right direction, cutting the link between increased prosperity and increased energy use and emissions.

My wife and I just moved into a new (to us) apartment in Cambridge and, as is often the case, were faced with a hodge-podge of leftover light bulbs in the fixtures – some too dim, some too bright and glaring, some dead. All were incandescents. New bulbs went on my shopping list.

Much to my surprise, the nearby specialty food store (a high-priced place, frankly) was selling an entire pallet of compact fluorescents (CFLs), for $.99 each! All brightness levels, floods and regular, soft light and cool tones, etc. No rebates, no special incentives, no mail-in coupons, nothing. Just a rock-bottom price. How could this be?

I bought a few and found they work just fine. However, they are the kind that have to “warm up” for 10-15 seconds before reaching full brightness. Remember those?  Almost a thing of the past. Hence the low price.

This is a significant moment. We’ve been doing electric efficiency in a serious way in New England for 25 years – since CLF and others published “Power to Spare” in 1987, which predicted that we could cancel out all increases in electric demand from then until 2005 if we made basic investments in electric efficiency. Like better light bulbs. We are now many generations of light bulbs down the road (with LEDs making their presence, not to mention all sorts of CFLs). And ISO-NE is actually predicting flat growth in demand until 2021, due in part to our collective investments in electric efficiency.

But when it comes to using natural gas more efficiently, we’re still in the dark ages, and we’re faced with potentially huge growth in the use of natural gas and the pipeline infrastructure to transport it around. It’s time to apply the lessons we’ve learned in electricity to the natural gas side of the energy equation. This will save us all money and keep the environmental impacts of expanding natural gas use to the minimum reasonably necessary.

The money-saving is obvious. Just as electricity-sipping appliances may cost more in the short run but you save money in the long run, investing in more efficient gas hot water heaters and ranges, HVAC systems, and even swimming pool heating systems will save several times the money invested, over time, by using less gas.

And using less gas is obviously better than using more – reducing fracking/extraction impacts, lowering impacts from new pipeline capacity, and of course reducing GHG emissions.  A recent CLF analysis, relying on a 2009 report on the potential for natural gas efficiency commissioned by the Massachusetts state government, determined that an aggressive but reasonable level investment in cost-effective residential natural gas efficiency measures could reduce residential gas use by 30%, thereby freeing up pipeline capacity.  This also helps ensure gas will be available to heat homes in New England’s (still) cold winter, especially low-income homes, and avert the prospect of conflict between the use of gas to make electricity and using gas to keep our homes and families warm.

So, more gas? Only if all cost-effective efficiencies are achieved. And we have a long way to go get there.

And then is it OK to use more gas? Only if we use natural gas as a means to make a true transition to an electric system based much more heavily on renewables. Starting now. Natural gas should not be viewed as a “bridge fuel,” it’s a “niche fuel.” In 20 or 30 years, its niche has to be to backstop and firm up renewables, which will then be the base and majority of our electricity supply. Its niche now, to be sure, is much larger than that, as it supplies the bulk of New England’s electricity generation.

It’s cleaner than coal and oil, but it is a fossil fuel. Burning it emits carbon and that cooks the planet (and extracting it has other serious impacts). We cannot build our long-term future on a plan to extract and burn more natural gas. And if we fail to achieve efficiencies now, and build big pipeline capacity instead, we’ll be locking ourselves into that sort of future, or at least making it very, very likely.

That would be wrong-headed, and a waste. We need to get into the efficiency habit with gas as deeply as we have with electricity – so that we’ll use less of it going forward, for generations to come.

CLF is pushing the ISO-NE to fully and properly account for all of the valuable energy-efficiency programs that the six New England states are already operating.

Energy efficiency is the cleanest and cheapest way for New England to meet its energy needs. We can save money and create jobs while reducing the greenhouse gas emissions that cause climate change. To learn more about what CLF is doing to promote energy efficiency, click here.

“ISO-NE” stands for Independent System Operator-New England; this is the organization of engineers and technical experts that runs New England’s electricity grid. To learn more about CLF’s work with ISO-NE, click here.

Together, the six New England states are spending hundreds of millions of dollars on energy efficiency programs. In 2011, the ISO created an “Energy Efficiency Forecast Working Group” to forecast how much energy efficiency was actually going to get bought for all that money. CLF has been participating in this ISO-NE Working Group since its inception.

The first report of this Working Group, published in April 2012, was very exciting, because it predicted that more than 100% of projected electricity load increases for New England over the next three years could and would be achieved  through energy efficiency, not from new generating plants. This is good news for the environment because it means lower levels of greenhouse gas emissions. At the same time, CLF thought that there were some mistakes in the forecast, mainly from under-counting the energy efficiency expenditures of those states (Massachusetts and Rhode Island) that had made the most enthusiastic commitments to energy efficiency.

On July 11, 2012, CLF sent a letter to the ISO-NE’s Energy Efficiency Forecast Working Group, urging it not to repeat those same under-counting mistakes in its work on the 2013 energy efficiency forecast. You can see the full text of CLF’s letter, here.

Ultimately, energy efficiency is paid for by electricity customers. In order for ratepayers to get all they efficiency they are paying for, the ISO-NE needs to count all the money that is being spent.

If CLF’s recommendations are adopted by the Working Group, it will benefit ratepayers by reducing electricity bills; and it will benefit the environment by reducing greenhouse gas emissions. It’s a classic win-win!

This summer, New Hampshire is bracing for news of the Northern Pass project’s future and its “new route.”

It’s now been nearly a year since the federal permitting process for the Northern Pass project was put on indefinite hold. North of Groveton, New Hampshire, the developer – Northern Pass Transmission LLC (NPT) – is still working behind tightly closed doors to string together a new section of the project route, where there are no existing transmission corridors, by paying landowners substantial sums for property – in many cases, well above market value.

Earlier this month, the chief operating officer of NPT’s parent company, Northeast Utilities, told investors:

Where we are right now is in procuring the last 40 miles of the right-of-way, and I can tell you we are making very, very strong progress in lining up the right of way. I think we’re on track for the middle of the year, approximately August timeframe to have the right-of-way secured and then to be prepared to file with the [U.S. Department of Energy] the route….

NPT’s apparent plan (assuming it really can overcome the considerable obstacles to a new route):

• Declare that it “heard the objections” to the original route (a posture it previewed last April when it agreed to look for new routes)
• Announce a new NPT-controlled route having the “support of property owners” (as it no longer has resort to eminent domain)
• Marginalize those with legitimate objections as “special interests” and
• Seek a speedy, narrow review of the proposal from federal and state regulators (after itself having put the permit process on hold for a year).

Not so fast. Before the news arrives (if it does), it’s worth remembering that whatever new lines the developer manages to draw on the map do nothing to change the project’s DNA or to demonstrate that the project will benefit New Hampshire. A brief review is in order:

Where are the benefits for New Hampshire?

Through  costly marketing efforts, NPT has been trying to sell New Hampshire on the tremendous economic and environmental benefits of Northern Pass. But the supposed benefits just don’t hold up to scrutiny:

• Reduced emissions from “clean power”?

In terms of greenhouse gas emissions, CLF’s report on the most recent science demonstrated that new hydropower projects to supply power for Northern Pass are much worse for the climate than NPT’s false advertising claims have led the region to believe and are not meaningfully better than natural gas power plants (the power NPT predicts that Northern Pass would replace) in the early years after reservoirs are developed. As a result, contrary to mistaken but widely disseminated assumptions, importing hydropower from Canada is not a short-term solution that will reduce New England’s or New Hampshire’s carbon emissions. Indeed, the current proposal would have the perverse effect of protecting – rather than hastening the transition away from – PSNH’s low-performing, high-emitting power plants, which are New Hampshire’s largest source of greenhouse gas emissions. (Despite marketing the project based on its “clean” source of the power, NPT also refuses to acknowledge the relevance or importance of the troubling damage to ecosystems and communities that large-scale hydropower causes in Canada.)

• Lower electric rates?

Those who would live with the new transmission lines, customers of NPT affiliate PSNH, are the least likely to benefit. Despite nearly two years of promises that PSNH would announce a plan to purchase Hydro-Québec hydropower for New Hampshire residents, there is still no agreement to do so. Any modest effects on the region’s wholesale electricity rates (which NPT’s consultant predicted based on outdated economic assumptions about energy costs) don’t translate into lower rates for PSNH customers (who instead are stuck paying the bill for PSNH’s inefficient and dirty power plants). In fact, if Northern Pass succeeds in lowering wholesale rates, it will likely worsen PSNH’s death spiral of increasing rates and fewer customers, leaving those residents and small businesses still getting power from PSNH with higher bills.

• Growing New Hampshire’s clean energy economy and jobs?

There is a substantial risk that Northern Pass would swamp the market for renewable energy projects in New England, especially if state laws are amended to qualify Hydro-Québec power as “renewable.” Furthermore, the project’s high voltage direct current technology means that its massive investment in transmission capacity will wholly bypass the potentially fertile ground for renewable energy development in northern New England. Whatever the short-term construction jobs required (and NPT’s estimates are disputed), the current Northern Pass proposal may diminish the prospects for New Hampshire’s clean energy economy, including needed permanent jobs in the renewable and energy efficiency sectors.

No regional plan addressing new imports

Québec continues to implement its ambitious plan to develop more wild Boreal rivers into a new generation of massive hydropower projects, which will increase its export capabilities. This January, Hydro-Québec commissioned the final turbine at its latest hydropower facility (Eastmain 1-A) and will commission other turbines (at Sarcelle) as part of the same overall project later this year. Construction at the $8 billion Romaine River hydropower project (the subject of the film Seeking the Current) has begun and is ongoing, with the first unit expected to come online in 2014. Northeast Utilities has affirmed that Northern Pass will tap the power from these new projects. Meanwhile, Northern Pass competitors are moving forward with new transmission projects in eastern New England and in New York, among others:

Northern Pass and competitor transmission projects (source: ISO-NE)

More than a year ago, CLF and others urged the Department of Energy to weigh the region’s energy needs and develop a strategic regional plan that would determine a well-informed role for new Canadian hydropower imports in the northeastern United States’ energy future – before moving forward with the permitting process for Northern Pass. NPT’s only response was that responsible planning – encompassing the other pending transmission projects and a full consideration of the reasonable alternatives – would unacceptably delay its project – a truly ironic claim given NPT’s own, unforced, ongoing delay. More incredibly, the Department of Energy has so far sided with NPT, without explaining why.

So as Québec builds more dams and NPT buys up land, our region has no plan of its own. With no framework to understand the nature and extent of the appropriate role for Canadian hydropower, it is difficult if not impossible to make a sound, well-informed decision on whether Northern Pass – or projects like it – should proceed.

Community and grassroots reaction throughout New Hampshire

Since Northern Pass was announced in 2010, the project has inspired a broad-based and spirited movement of people throughout New Hampshire to oppose the current proposal. Last spring, there were massive turnouts at the Department of Energy’s public hearings on the project, with literally thousands attending and providing written and verbal comments both questioning the merits of the current proposal and urging a thorough environmental review. And earlier this year, a coalition of citizens and organizations of many political stripes succeeded in persuading New Hampshire’s legislature to enact a bill preventing projects like Northern Pass from using eminent domain. In another effort, more than 1,500 donors contributed total of $850,000 to enable the Society for the Protection of New Hampshire Forests to preserve the treasured New Hampshire landscape surrounding the historic Balsams resort, including a parcel that NPT had sought to purchase as part of Northern Pass’s transmission corridor. To date, town meeting voters in 32 local communities have passed resolutions and ordinances against the current proposal. Critically, most of these communities are located along the NPT’s “preferred route” that follows PSNH ‘s existing transmission corridor, south of any “new route” that NPT may announce.

NPT’s refusal to consider routing and technological alternatives

At every turn, NPT has rejected calls for in-depth consideration of potential alternatives to its current proposal, including use of an existing high-voltage transmission corridor that extends from Canada, through Vermont and western New Hampshire, to Massachusetts; burying transmission lines in transportation corridors, as is proposed in the New York and eastern New England projects mentioned above; or adding capacity to that same New York project, consistent with that project’s original proposal (it has since been scaled back). Indeed, Northern Pass’s response to the public’s opposition to the project was to “withdraw support” for alternative routes and double down on its “preferred route.” While this stance may be in the economic interest of NPT and PSNH, it’s grossly at odds with a fair, well-informed permitting process that would vindicate the public’s interest in a solution with minimal environmental and community impacts.

If and when NPT comes back from its year of buying up North Country land and relaunches its effort to secure approval of the Northern Pass project, with the only change to the proposal consisting of a new line on the map north of Groveton, there should be no mistake: the fundamental flaws in the current proposal remain. Likewise, whatever NPT’s “preferred route,” CLF remains as committed as ever to securing a comprehensive and rigorous permitting process that identifies superior alternatives and a final outcome that moves us toward – and not away from – a clean energy future for New Hampshire and the region.

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/northern-pass), and take a look at our prior Northern Pass posts on CLF Scoop.

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.

Photo credit: Marilyn Humphries

It may come as no surprise that Dominion Energy ‘s spokespeople don’t want to admit that Dominion’s  recent moves to “delist” Salem Harbor Station are signs that Dominion plans to shut the plant down (read recent statements here and here).  Dominion has been spinning stories about the plant to local audiences for years.  But apparently, Dominion CFO Mark McGettrick has no such trouble. At a financial conference at the Edison Electric Institute on November 2, McGettrick confirmed that the plant will shut down within five years. “We have announced that two of our coal plants will shut down in the future when the environmental rules are clear. The first is Salem Harbor in the Northeast. We’ve already tried to delist a few of those units, but the ISO has required the two biggest ones for reliability. But in the near future, certainly within this five year horizon, we would expect Salem Harbor plant to shut down. We will not be investing any capital for environmental improvements at Salem Harbor.”* No mincing words for McGettrick.

So there you have it. Salem Harbor is going to shut down within five years.  Dominion says it will not invest any more money in environmental improvements at the plant. So, if ISO-NE continues to find the plant is needed for reliability, who will pay the price for those improvements? Ratepayers. Specifically, the ratepayers who live in the shadow of this plant in northeastern Massachusetts. That’s why ISO-NE must act now to find an alternative to Salem Harbor Station.  CLF has stepped in to ask the Federal Energy Regulatory Commission to order ISO-NE to meet its responsibility, so that ratepayers can avoid these costs.  CLF will continue working to accelerate shutdown to prevent further damage to public health and the environment and to stop Dominion and ISO-NE from forcing ratepayers to prop up this polluting dinosaur of a plant that should have been closed years ago.

*Listen to the announcement via Google Finance
Clip can be found at 22:30