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.

Northern Pass’s developer has a long track record of public statements attributing the deep New Hampshire opposition to the current proposal to the go-to developer bogeyman – “not in my backyard” obstructionism. Accusing critics of short-sighted “NIMBYism” is even part of Northern Pass’s expensive marketing campaign (which suffers from other deliberately false and misleading claims). Continuing this tradition, the CEO of the developer’s parent company recently derided opponents as “special interests.”

This is loaded, derogatory rhetoric, and exactly the wrong frame for having any constructive dialogue with the New Hampshire communities that face living with the project’s major new infrastructure, as I argued on NHPR last year. And on a personal level, after nearly a year and a half of advocacy on the Northern Pass project, I can say with certainty that the New Hampshire opponents of the current proposal don’t fit the caricature. Those with backyards that would be affected are indeed concerned about their homes, but also about the broader issues of whether the project will benefit their communities, New Hampshire, and the region. Like CLF, they aren’t seeing meaningful public benefits that would make the burdens of the project worth bearing.

Our colleagues at the Society for the Protection of New Hampshire Forests recently produced a pair of videos that help bring to life some of New Hampshire’s very real concerns about the project, many of which are key parts of CLF’s Northern Pass advocacy.

In this video, Appalachian Mountain Club’s Susan Arnold explains our history of protecting the White Mountain National Forest and the problems with Northern Pass’s proposal to build new towers through this nationally treasured landscape:

(If impacts in the White Mountain National Forest are of interest to you, I’d also recommend a recently launched resource with lots of information on the details of Northern Pass’s current proposal and the unique permitting process that applies: ProtectWMNF.org.)

In this video, you’ll meet a Deerfield, NH family that would be directly affected by the project:

(In line with prior non-responses to criticism and strong-arm tactics, Northern Pass’s developer posted an odd rebuttal to this video on its website, attacking as “inaccurate” certain general statements and images showing towers close to the family’s house. Leaving aside that accuracy in communications hasn’t been its own priority, the developer has released no detailed mile-by-mile design of the project to back up its post, nor does it deny that its representatives told the family that towers could be built very close to their home. And if you watch the video, it’s clear that the “rebuttal” is more about trying to discredit the Forest Society than providing a meaningful response to the video’s substance.)

From the families who live along the proposed route, to the small businesspeople in the state’s tourist economy who are concerned about the effect of the project on their livelihoods and communities, to the New Hampshire residents and groups questioning the wisdom of erecting massive new towers through treasured landscapes like the White Mountain National Forest, New Hampshire’s many critical voices are focused on real, legitimate concerns about the impacts of Northern Pass on our state and beyond. We will not be marginalized, bullied, or deterred as we raise these issues in public forums and in the federal and state permitting processes to come.

CLF was not involved in the production or content of the videos above. They are posted here with the permission of the Society for the Protection of New Hampshire Forests.

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.

photo credit: flickr/brianjmatis

This week, the New England Power Generators Association (the trade group for most of the region’s power plant companies, also known as NEPGA) released a new study analyzing the potential effect of the Northern Pass project on New England’s energy market – the first independent study addressing this issue. More than two years after the deeply flawed energy study that Northern Pass’s developer commissioned and has cited unrelentingly since, NEPGA’s study is an important, credible contribution to the public discussion surrounding the Northern Pass project.

The new study’s conclusion: the supposed energy benefits of the project – that it will lower the region’s energy costs and diversify the region’s power supply – won’t materialize. The study also shows that the economic merits of the current proposal are much weaker today than they were when the proposal was formulated two years ago, due to reductions in the cost of natural gas.

You can read NEPGA’s press release about the study (PDF) here and the full study (PDF) here. You’ll find press coverage of the study in the Union Leader here, in the Concord Monitor here, on WMUR-TV here, and on New Hampshire Public Radio here.

A few key takeaways:

• The study’s finding that natural gas prices have declined is not news to Hydro-Québec or to Northern Pass’s developer, which is trumpeting new domestic natural gas supplies as a “game-changer.” What this means, in practical terms, is that the project will not put much downward pressure on the already-low regional market price of power. That’s a problem for Northern Pass: reducing regional energy costs is at the heart of the Northern Pass sales pitch. (As we’ve pointed out before, this “benefit” in fact perversely would put upward pressure on – rather than lower – the rates that most New Hampshire consumers pay.)
• With the economics of the project so tenuous, there is a clear risk that the proponents will seek to qualify Northern Pass power for the benefits afforded to new renewable energy sources under state clean energy laws, a legal change that would unfairly undermine the market for renewable energy development in New England. (The risk that hydropower imports will need subsidies to cover new transmission costs has also recently been cited by critics of the Champlain Hudson Power Express project in New York.) If it’s true, as proponents insist, that Northern Pass doesn’t need subsidies, New England should accept nothing less than a binding legal commitment from Hydro-Québec and Northern Pass’s developer not to seek or accept them.
• NEPGA’s study suggests that Northern Pass would shift Québec hydropower exports from New York and Ontario to New England. This effect may completely offset the supposed carbon emissions reductions from Northern Pass (which are inherently dubious for other reasons) because it is extremely likely that New York or Ontario would ramp up natural gas power plants to make up any deficit. In this regard, the study shows yet again that a rigorous big-picture regional analysis – of the kind that could be provided in the comprehensive regional assessment of our energy needs and the role, if any, for more Canadian imports that CLF and others have sought and Northern Pass’s developer has opposed – is essential to making a well-informed decision on a proposal like Northern Pass.
• The developer’s hair-trigger response – to question the credibility of the sponsors of the study and not the study’s actual findings, a classic Bulverism – speaks volumes. At every turn, the developer has refused to acknowledge or address the problems with its current proposal, even in the face of unequivocal facts that debunk the supposed benefits. Sadly, we can expect the potential rollout of the “new route” for a piece of the project later this summer to follow a similar script.

Above all, NEPGA’s new study underscores that that no one should rely on the stale, incomplete, and misleading information that Northern Pass’s developer is using to sell the project to the public and to government agencies. We need a much deeper, clear-eyed understanding of what Northern Pass would mean for the region’s energy consumers, New Hampshire communities, and the environment on both sides of the border.

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.

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.

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

A keystone to CLF’s work to secure a clean energy future for the region is completing the transition to a coal-free New England. It is a time of historic progress: cleaner, cheaper alternatives are driving coal out of the market, and old coal plants are closing their doors. But New Hampshire remains a critical battleground for CLF’s work, with two costly old coal-fired power plants being kept alive by failed state policies and ratepayer subsidies.

That’s why we’re delighted to be partnering with the Sustainability Film Series at Phillips Exeter Academy to present a free screening of the critically acclaimed documentary The Last Mountain in Exeter, New Hampshire, on Friday May 4. With stunning footage of the practice of mountaintop removal mining, the film bears dramatic witness to the social, public health, and environmental damage wrought by coal and power companies, and chronicles the grassroots fight against coal in Appalachia and around the country. The New York Times called The Last Mountain a “persuasive indictment” of coal; I think you’ll agree.

The Last Mountain producer Eric Grunebaum and I will be on hand for a panel discussion to discuss the film and the future of coal-fired power in New Hampshire and New England.

Please join us:

When: Friday, May 4, 2012. 7 pm.

Where: Phillips Exeter Academy, Phelps Academy Center in The Forum (3rd Floor), Tan Lane, Exeter, NH (map). 

Bring your friends and family, and email me at ccourchesne@clf.org with any questions. We hope to see you there!

Here is the trailer:

The American developers of the Northern Pass project are misleading the public about the project’s most touted environmental benefit (without which they “wouldn’t be doing this”): reducing New England’s greenhouse gas emissions. Presented with clear, unambiguous evidence that the current proposal would not meaningfully reduce emissions and that their public relations campaign is trading in falsehoods, the developers have done nothing to correct the record or provided any substantive response to the evidence.

In mid-February, CLF released a report on the science regarding large-scale hydropower’s emissions of greenhouse gases, the pollutants that are driving climate change. The conclusion: large-scale hydropower projects, especially new facilities, have substantial greenhouse gas emissions that, in their first years of operation, are equivalent to emissions from modern natural gas power plants.

This conclusion means that the proposed Northern Pass project, which would import up to 1,200 megawatts of new Canadian hydropower into New England and displace power from domestic natural gas plants, would not meaningfully reduce greenhouse gas emissions, as the developers are claiming.  CLF’s report also demonstrated that the assumption at the heart of the developers’ claim that the Northern Pass project would reduce emissions by 5 million tons per year – that Canadian hydropower has no greenhouse gas emissions – is unequivocally false.

CLF sent a copy of the hydropower emissions report to Northern Pass Transmission LLC (NPT). In our transmittal letter, we made clear that the science summarized in the report (some of which was included in NPT’s own regulatory filings) clearly contradicted NPT’s marketing claims and urged NPT to:

• correct the regulatory and public record by retracting and withdrawing all NPT prior statements that hydropower results in no emissions of greenhouse gases and that the Project will reduce carbon dioxide emissions by any specific amount, and
• refrain from making any claims regarding carbon dioxide emissions reductions associated with the Project unless and until those reductions are substantiated in a new technical analysis subject to public and permitting agency review.

To date, NPT has taken neither step. The false “no emissions” canard and the unsupported claim of 5 million tons of annual emissions reductions from the project are still prominent fixtures at NPT’s MyNewHampshire.com:

"No greenhouse gases" (source: http://www.northernpass.us/pdf/ads/Jack.pdf)

NPT spokesman Martin Murray did post a non-responsive comment on CLF’s website, to which I responded in detail here. On its own website, NPT then heralded a Hydro-Québec press release responding to the report, and I explained here why the press release neither reflected a close reading of the report nor challenged the report’s fundamental conclusions but, instead, underscored Hydro-Québec’s position that the major promise of new hydropower imports was as a long-term replacement for dirty, costly coal power plants like New Hampshire’s own Merrimack and Schiller Stations – not natural gas.

Where do NPT’s non-responses leave us? Unfortunately, NPT seems poised to continue on with its false and misleading public relations campaign and has shown no interest in an open, honest debate. CLF will continue to use all the tools at our disposal to ensure that the public and decision-makers are fully aware of all the issues associated with the Northern Pass proposal. 

You can support our work by becoming a CLF member and also by telling the permitting agency now reviewing the Northern Pass proposal to consider hydropower’s greenhouse gas emissions – and all the other impacts of Northern Pass power in Canada – as part of the agency’s environmental review – click here to take action.

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.