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

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

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

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

Propping up outdated physical assets – with high fixed maintenance costs – in the hopes that they will someday become competitive again is not “insurance.”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

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

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

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

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

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

The massive drag on New Hampshire’s economy caused by PSNH’s continued operation of the uneconomic and obsolete Merrimack Station and Schiller Station coal-fired units—extracting hundreds of millions per year in above market costs for its shareholders—is spiraling out of control, and several recent developments at the NH Public Utilities Commission raise troubling questions about what the agency empowered to protect ratepayers is doing about PSNH’s problems.

While competition among energy suppliers in New England is fostering efficiency, benefitting the environment and saving ratepayers money, PSNH’s energy service business, for which it collects its cost of service and a handsome profit, is increasingly looking like a dinosaur ready for extinction. Thousands of NH ratepayers are taking advantage of lower cost, more efficient electricity suppliers, but those remaining with PSNH are being dragged down into its death spiral.

One recent indicator is PSNH’s skyrocketing energy service rate. In early December, PSNH requested a 34% energy service rate increase (to 9.54 cents/kwh, equating to hundreds of dollars extra per household per year) beginning in 2013. At the end of December, the PUC approved the rate increase. CLF is challenging that increase at the PUC on the grounds that, even aside from the fact that it entirely consists of above market costs, NH law prevents the PUC from approving a utility’s requested rate increases when the utility has not submitted required planning documents demonstrating that it has a sound plan for serving its customers at the lowest cost. PSNH failed to submit long term least cost planning documents due last September; until they do so, the PUC is not authorized to approve their rate increases.

Fundamentally, the job of a utility commission dealing with a regulated utility like PSNH is to ensure that prices mimic the results of market competition while ensuring the best service for ratepayers. Thus far, the PUC has shielded PSNH from the consequences of its poor decisions, lack of meaningful planning, and insistence on retaining antiquated power plants that sit idly due to their high costs. It also is once again delaying the release of economic and environmental information that PSNH used when deciding to build the $422 million scrubber project at Merrimack Station. And days ago the PUC approved PSNH’s 2010 plan for its energy supply resources – a plan that utterly ignored lower natural gas market forecasts and impending environmental regulations when planning its future operations.  CLF is acting to protect ratepayers from PSNH’s dying business model; the extent to which the PUC is doing so is less than clear.

The PUC is engaged in dockets investigating both the costs of the scrubber project and PSNH’s increasing energy service costs. It remains to be seen whether these investigations will have any impact on the expensive mess PSNH has yoked to NH ratepayers, and whether PSNH will continue even farther down the path of  eroding New Hampshire’s advantage as a low cost state to grow a business and a family.

The data don’t lie. In line with the trends we’ve been warning about for years, PSNH’s coal-fired business model is in free fall:

Residential and small business customers continue to flee PSNH’s dirty, increasingly expensive energy service.

Source: NHPUC data

• Over the past year the number of residential energy customers in New Hampshire who purchased energy service from a supplier that is not PSNH jumped to around 30,000 households in December of 2012 (compared to around 2,000 households in December of 2011).
• That figure doesn’t include the veritable flood of customers who abandoned PSNH’s energy service at the end of 2012 when word got out about PSNH’s 34% rate increase (ENH reported signing up 1,700 customers on December 31 alone for service starting January 1). The stampede of residential and small business customers away from PSNH’s energy service shows no signs of slowing down.

PSNH’s coal plants are becoming even less competitive and will operate even less in 2013 than in 2012.

Source: ISO-NE, EPA, and PSNH data

• We noted before that PSNH’s coal unit capacity factors have taken a nosedive over the past five years, and they are projected to keep falling on an annual basis in 2013 (see chart below).
• A power plant’s capacity factor reflects the amount of power the plant generated compared to the amount of power it could have generated if used to its full potential; when that number is low, it means it was a better economic choice for the plant’s owner to keep the plant idle most of the time. While other coal plants throughout New England are also running at low capacity, PSNH is the only utility in the region that can force ratepayers to bear its fixed costs plus a hefty guaranteed profit, even when its plants don’t generate power.

The Bottom Line:

Even as many customers are taking advantage of cleaner, cheaper alternatives, PSNH’s dirty and costly power plants are a heavy – and growing – burden for the majority of New Hampshire ratepayers and for New Hampshire’s economy. In a future post, I’ll discuss how the state agency tasked with protecting ratepayers from unreasonable rates is handling PSNH’s implosion (spoiler: not well) and what CLF is doing about it (another spoiler: fighting to protect New Hampshire ratepayers and the environment).

photo credit: TimothyJ/flickr

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

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

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

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

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

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

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

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

PSNH's Merrimack Station

For the past 25 years, Toxics Action Center has been “awarding” New England’s worst polluters with the dubious Dirty Dozen award. This year’s winners were no surprise: PSNH, New Hampshire’s largest electric utility, was on the list once again.

In this year’s annual spotlight on twelve of New England’s worst polluters, PSNH’s largely coal-firing Merrimack Station and Schiller Station power plants earned the award for the millions of pounds of toxic air pollution and greenhouse gases released by the plants. The Dirty Dozen awards are getting lots of press coverage around New Hampshire, and highlight the massive problems PSNH’s coal plants cause New Hampshire residents.

There is good news. Three of New England’s eight coal plants have closed in the past three years, and the rest (including Merrimack and Schiller) should be well on their way thanks to the massive economic inefficiencies of burning coal in the age of cheap natural gas. While these giant, ancient plants were built to run all day, all year round, the reduced demand for coal energy means that plants like Merrimack and Schiller are being used at historically low rates.

While the current cost of energy production at coal plants is staggering, nothing represents the exorbitant costs of coal better than Merrimack Station’s $422 million scrubber project. PSNH is already recovering the cost of that “investment” from its customers with a temporary rate increase, and has requested an even higher permanent rate increase to recover scrubber costs. Installing massively expensive pollution controls on an obsolete coal-fired power plant was recently shown to be a valueless endeavor when the investment firm UBS valued Dominion Energy’s Brayton Point coal plant (currently for sale) as a worthless asset, due to its poor prospects in the New England wholesale electricity market. Dominion has essentially written off its almost $1 billion pollution control investment at Brayton Point, which has little utility to a plant that does not operate due to its high cost to produce electricity in comparison to cleaner sources.  Merrimack Station’s scrubber investment is faring even worse in the market, because the plant is older and less efficient than Brayton Point.  In this regard, Dominion’s write down at Brayton Point foreshadows the future for Merrimack’s “investment.”

As we documented earlier this month, PSNH’s residential and small business energy service customers are abandoning the utility in favor of its competitors at a breakneck pace, following the lead of its medium and large commercial customers and creating an economic “death spiral” as costs climb and customers disappear. And since PSNH is guaranteed a profit by NH law for maintaining and operating its coal plants, the repercussions of the “death spiral” are felt by residential customers, rather than the company’s shareholders.

The residential customers who have not switched to a different energy service provider are projected to subsidize PSNH’s dirty power plants by an estimated $70 million above market rates in 2013. The above-market residential rate payments are then turned into dividends for the shareholders of Northeast Utilities, PSNH’s Connecticut-based parent company.

Northeast Utilities’ dividends are increasing steadily on the backs of New Hampshire ratepayers, and Merrimack and Schiller continue to produce pollution more efficiently than they generate electricity. How long will PSNH be allowed to fleece New Hampshire’s citizens?

Co-written with N. Jonathan Peress

It’s not news that New Hampshire’s ratepayers are paying too much money to support PSNH’s ancient, massively inefficient, and heavily polluting coal-fired power plants. CLF has repeatedly called out PSNH’s calamitous insistence on continuing to operate coal-fired units at Merrimack Station in Bow and Schiller Station in Portsmouth and the resulting exorbitant electric rates that PSNH customers pay.

It’s still possible to be shocked, however, by the magnitude of PSNH’s growing problems and the environmental and economic harm that PSNH’s collapse is causing in New Hampshire. And the situation is worsening: new data are confirming the futility and waste of operating coal plants, and New Hampshire ratepayers are, in what is now a full-scale stampede, abandoning PSNH to meet their electric needs with cleaner, cheaper energy from competitors.

Here is an update on PSNH’s so-called “death spiral”:

Unprecedented Idling of Power Plants

A power plant’s “capacity factor” is a ratio between the amount of electricity the plant actually produced over a given period and the amount that it would have produced had it been running at full capacity during that time. Because coal plants – like nuclear plants – take some time to ramp up and take offline, they are built to operate with a very high capacity factor, on a 24-7 basis. In 2007, PSNH operated Merrimack Station’s coal boilers at 91% capacity and Schiller Station’s coal boilers at 84%.

The new reality for PSNH: these numbers have fallen precipitously since then; over the first nine months of 2012, Merrimack’s coal units had a capacity factor of 31%, and Schiller’s coal units 9.7%.

* 2012 data through September (source: EPA and ISO-NE data)

With dirty coal being trounced in the marketplace by cheaper power sources, especially natural gas, it is a disproportionately expensive undertaking to operate a coal unit – and a veritable folly at these levels of output.

Energy Service Rate Hike in 2013

The problem for PSNH’s customers is that even though the writing is on the wall for coal power plants around the country and here in New England, PSNH is still guaranteed a ratepayer-funded profit for owning Merrimack and Schiller, which is handed over to PSNH whether or not the plants produce power. Add it all together – PSNH’s operating costs for Merrimack, Schiller, and its other power plants, PSNH’s guaranteed profit, and the cost of the “replacement” power PSNH buys from the regional market to provide electricity to its customers while its plants sit idle – and PSNH customers are paying a huge and increasing premium over rates in the competitive market.

While there are many separate charges on an electricity bill, the “energy service” rate reflects the costs of generating the electricity. At the end of September, PSNH filed a projection (PDF) with the New Hampshire Public Utilities Commission warning of a residential energy service rate increase to take effect on January 1, 2013. The utility requested a 26% increase in the amount customers pay for electricity supplied by PSNH, bringing the overall default energy service rate to 8.97 cents per kilowatt hour. PSNH has also separately requested a permanent rate increase to recover the costs of the $422 million mercury scrubber that, if passed, would bring the default energy service rate to 9.27 cents per kilowatt hour.

By contrast, just over the border in Massachusetts, PSNH affiliate NStar’s residential customers will be paying a mere 6.69 cents per kilowatt hour for power that NStar almost wholly buys from the regional market. NStar’s rates are, like virtually all New England utilities other than PSNH, reflective of the historically low electricity prices available in that market, which have steadily fallen since 2008.

What this means is that, come January, the average PSNH-served New Hampshire home will be subsidizing PSNH and its power plants to the tune of $169 per year, or more than $190 per year with the addition of the extra charge for the scrubber.

Residential and Small Business Customers Increasingly Abandoning PSNH

As CLF documented recently, PSNH’s increasing rates represent an enormous market opportunity for competitive energy suppliers in New Hampshire.

They are seizing it. September 2012 data show 17,507 residential PSNH customers (about 5%) purchasing power from non-PSNH suppliers, an increase of more than 6,000 customers over the month before and a whopping 16,000 more than September of 2011. The number of small businesses fleeing PSNH’s electricity supply has grown at a steady rate: 14,617 purchased power from non-PSNH suppliers in September 2012, compared to 9,351 in September 2011.

(source: PSNH filings with N.H. Public Utilities Commmission)

Meanwhile, the most recent data show that there are now virtually no large or medium-sized businesses that buy power from PSNH.

While retail choice in suppliers for New Hampshire’s residential and small business customers was slow in coming, the available options have expanded considerably in the past year. Resident Power, Electricity NH, and Glacial Energy all quote lower rates than PSNH, and they are increasingly offering additional choices of electricity supply from coal-free, renewable, and sustainable sources at fixed rates lower than PSNH. We can expect an even faster exodus to these suppliers and new ones like them after PSNH’s rate increase in January.

Despite the rapidly increasing number of customers choosing alternative electricity suppliers, the vast majority of New Hampshire’s residential customers still purchase their electricity from PSNH. Many customers are unable or too busy to research comparative rates and make the change. And energy supply choice alone will neither affect the astounding subsidies that PSNH is getting to prop up its failing business nor force PSNH to make the economically rational decision to retire its dirty, outdated coal plants.

We need to correct this massive public policy failure and bring to an end the severe economic, environmental, and public health damage that PSNH’s ancient coal plants are causing in the Granite State. There is now reason to believe that we are turning a corner. Maggie Hassan, New Hampshire’s new governor-elect, has been outspoken about the importance of reducing pollution from electricity generation, especially from PSNH’s coal fleet. CLF is ready to work with the new administration and Legislature to develop a comprehensive climate and energy plan that transitions the state out of the grip of PSNH’s coal-fired business model and moves New Hampshire toward a cleaner and affordable energy future.

Fellowship Attorney Caitlin Peale co-authored this post.

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.

This Sunday, an Op-ed of mine appeared in The Portsmouth Herald. Below find a copy of the original text. You can find a copy of the original story here.

The nation and New Hampshire are relying less and less on coal — our dirtiest, least efficient fuel — to meet our electric power needs. PSNH recently announced it is not operating its flagship coal plant, Merrimack Station in Bow; the plant will sit completely idle for six months of 2012. The two coal boilers at PSNH’s Schiller Station in Portsmouth will operate even less. Yet, PSNH customers continue to pay a premium to keep PSNH’s coal plants on life support, thanks to a regulatory system that protects PSNH’s interests over those of ratepayers.

Coal-fired power plants — expensive new facilities and decades-old dinosaurs like PSNH’s plants 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. Northeast Utilities — PSNH’s parent company — admits that this reality is not going away anytime soon.

Indeed, the trend is accelerating. In the first quarter of 2012, coal power accounted for only 36 percent of the nation’s total electric output — the smallest role for coal in a generation and down almost 9 percent from the first quarter of 2011. Regionally, a new milestone came in April, when the New England regional electric grid operator announced that, during the previous month, the entire New England coal fleet was uneconomic — meaning there was not a single hour when a coal plant was able to compete with other energy sources. Despite coal’s downward trajectory, PSNH made big bets that the market for coal-fired power will exist for years to come. Exhibit A: PSNH’s investment — over vigorous opposition from the Conservation Law Foundation, ratepayer advocates and others — in a $422 million life extension project for Merrimack Station. If PSNH gets its way, ratepayers will foot the whole bill, plus a 10 percent guaranteed profit for PSNH’s sole shareholder, Northeast Utilities.

Why has PSNH been so richly rewarded for bad economic decisions? Put simply, New Hampshire’s relic of a regulatory system still protects PSNH and its coal plants from the market. Remarkably, ratepayers continue to pay for upkeep and staffing at PSNH power plants, even when they sit idle, and also pay that same 10 percent profit on the book value of all PSNH assets. No other power plant owner in New England gets such special treatment. Yet PSNH continues to sidestep scrutiny.

Earlier this year, following a massive lobbying effort orchestrated by PSNH, the New Hampshire House voted to table a bill that would have forced a hard look at PSNH’s continued ownership of these obsolete power plants.

In the meantime, PSNH remains in an economic “death spiral” with few large business customers to cover its costs and its remaining customers — homeowners and small businesses — now paying as much as 50 percent more for power than customers of other utilities, which get their power from the competitive market. Under the status quo, PSNH will siphon more than a $100 million in above-market costs out of the New Hampshire economy this year.

For the environment, the climate, and the long-term public and fiscal health of the communities surrounding these plants, coal’s demise is encouraging news. The market is providing an unprecedented opportunity to relegate coal power to the history books for good. New Hampshire should seize it.