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

Articles in this morning’s Boston Globe and Salem News describe an important shift in the status of Salem Harbor Station and highlight the need for ISO New England (ISO-NE) to go beyond the analyses it has done in the past so that it can finally identify an alternative that will actually solve the reliability issue that has dogged efforts to retire the plant since 2003.  That is the subject of the recent protest filed by CLF asking the Federal Energy Regulatory Commission to require ISO-NE to perform an expedited analysis of the alternatives and establish a timeline for implementation.

ISO-NE’s failure to identify solutions that will relieve the need for Salem Harbor Station has resulted in decisions that will cost ratepayers up to $18.5 million in above market payments in 2012-2013 and up to $16.9 million in 2013-2014. ISO-NE could avoid imposing these costs on ratepayers by implementing an alternative that would allow the plant to retire by 2012.

However, if ISO-NE rejects Dominion’s recent “permanent delist bid” – its latest and most telling signal that it wants to retire the plant – on the basis of reliability, ratepayers face the risk of even higher costs. The reality is that ratepayers pay more per kilowatt for electricity from Salem Harbor Station than they pay for other sources of electricity in the capacity market ranging from natural gas to nuclear and renewable.  This dispels the perception that coal is a cheap source of electricity.   Importantly, these additional costs aren’t spread among ratepayers throughout New England; instead, they are passed on solely to the ratepayers in northeastern Massachusetts, the same people who already bear the costs of additional medical expenses from the heart and lung diseases and other illnesses caused by pollution from the plant.  A study released by Clean Air Task Force concluded that pollution from the Salem Harbor Station causes 20 deaths, 36 heart attacks and 316 asthma attacks every year.

These costs diminish any economic benefits that the City of Salem receives from tax payments and jobs at the plant, and the likelihood that Dominion will retire in 2014 if its de-list bid is accepted makes it more important than ever that an alternative use for the site be developed to replace the facility.

Dominion’s claims that it is not planning to retire the plant contradict its own filings before the Federal Energy Regulatory Commission.  Continuing a tradition of telling the story that best suits its interests depending on the audience, Dominion told the Commission in a 2009 filing that it estimated only three more years of economic viability for the plant.  Dominion spokesman Dan Genest told the Salem News, “We know what it costs us to produce a megawatt of electricity at Salem Harbor Station, and the lower price at auction is not enough to cover our costs to generate electricity.” Despite its claims that it can continue to make profits in other markets, Dominion has said in its own filings that it was likely to lose money in those markets.

The bottom line is that ISO-NE has a responsibility to find an alternative to replace Salem Harbor Station that will cost less.  Now that the threat of even higher costs looms, protecting ratepayers demands a solution by no later than 2014, and the public health and environmental harms caused by the operation of this 60 year old coal and oil-fired relic weighs heavily in favor of shutting down the plant as soon as possible.

Local Activists from Salem Alliance for the Environment (SAFE) and HealthLink are hosting a Forum this Sunday that will expose the true costs of burning coal at plants like Salem Harbor Station.  The heat is on Dominion Energy to shut down Salem Harbor Station to allow the City of Salem and Massachusetts to usher in a clean energy economy that will provide sustainable and equitable jobs without jeopardizing public health or the environment.  Anyone who is interested in moving us towards a Coal Free Massachusetts should attend this event to find out more about the toll coal fired power plants take on communities from mining through burning and finally the disposal of ash.

For more information on how you can get involved check out the SAFE and HealthLink websites  CLF’s take action webpage.

(Photo credit: David Moisan)

There has been a significant development in the long running saga of the Salem Harbor power plant, one of the major targets of CLF’s Coal Free New England campaign. On October 5, Dominion Energy, the plant’s owner, quietly filed what is known as a Permanent Delist Bid with ISO New England (ISO-NE), the operator of the New England electricity system and markets. The filing commits Dominion to permanently withdraw Salem Harbor Station from the forward capacity market, the key market where power plants, and other resources like energy efficiency, are paid to be present, available and ready to meet the electricity needs of the region.

What does this mean?

By filing to permanently withdraw Salem Harbor Station from the forward capacity market, Dominion is signaling that it does not believe the market will be able to provide sufficient revenue to run the plant profitably and that it cannot maintain the plant going forward.

According to Paul Peterson, senior associate at Synapse Energy Economics, Inc., “The delist process was created specifically to allow power plants to withdraw from the forward capacity market, either temporarily or permanently, depending on their economics. A power plant that enters a permanent delist bid – an irrevocable decision that it will no longer try to earn revenue from that key market – is laying the groundwork to shut down.”

Although there are alternative scenarios that could allow Dominion to re-enter the market at a future date, the barriers to re-entry are extremely high and the process for doing so is complex.

Excessive ratepayer burden

Dominion’s move puts additional pressure on ISO-NE to implement a plan by June 2014 that does not rely on Salem Harbor Station to keep the lights on – ever. On October 14, CLF filed a protest with the Federal Energy Regulatory Commission citing ISO-NE’s failure to develop such a plan following the 2009 and 2010 auctions, keeping Salem Harbor Station available for “contingency” needs at enormous cost to area ratepayers. In our protest, CLF pointed to insufficient planning and loopholes in the ISO-NE process that have allowed Dominion to receive more than $30 million dollars in above market payments just to continue to exist, even while Dominion’s own filings indicated its intentions to leave the market. The company filed “static delist bids” for the past two years, a temporary exit measure that allows a company to receive above market payments if it is deemed necessary for reliability. Dominion’s ability to repeatedly game the system has forced ratepayers to bear the cost of maintaining an obsolete and polluting coal plant well beyond its useful life.

Buckling under pressure?

Salem Harbor Station is under increasing economic and environmental pressure. In June 2010, CLF filed a federal lawsuit against Dominion for repeatedly exceeding smokestack emissions limits at Salem Harbor in violation of the federal Clean Air Act. The suit would hold Dominion responsible for paying millions of dollars in penalties retroactively. Meanwhile, new EPA regulations on the near horizon will mean tougher pollution controls and multi-million dollar investments needed to comply with them. The permanent delist bid is a clear indication that Dominion doesn’t believe it can continue to wring dollars out of ratepayers for its obsolete plant for much longer, and we are making sure they won’t. Stay tuned.

Big announcement yesterday:

In an ongoing effort to protect the environment and the public from the hazards of dirty coal-fired power plants, Conservation Law Foundation (CLF) today filed a federal suit against Dominion Energy of New England for repeatedly exceeding smokestack emissions limits at its Salem Harbor Station facility in Salem, Massachusetts.  The suit holds Dominion Energy accountable for willful and ongoing violations of the federal Clean Air Act’s “opacity” requirements. The Clean Air Act sets limits on opacity – a measure of the density of smokestack emissions – to minimize the amount of soot that is released into the air.  Soot, which contains harmful chemicals, metals and ash, has been linked to severe health and environmental problems.

The suit would hold Dominion responsible for paying millions of dollars in penalties retroactively for violations of the smokestack emissions limits. The violations – 317 in a five year period – are documented in Dominion’s own quarterly reports of mandatory monitoring at the Salem Harbor Station power plant.

“Abiding by the Clean Air Act is not optional,” said Shanna Cleveland, CLF staff attorney. “According to its own reports, Salem Harbor Station is in continual violation of what the law has deemed necessary to safeguard public health. This casual disregard for the law and the people impacted by Dominion’s negligence must not go on unchecked.”

Recent studies have shown that even short-term exposure to soot has been linked to higher rates of hospitalization for heart and respiratory problems. Children and the elderly are the most vulnerable, experiencing health problems ranging from decreased lung function to premature death.

Martha Dansdill, executive director of the public health advocacy group HealthLink and a co-plaintiff in the suit, said, “Salem Harbor Station must not be allowed to continue to pollute with impunity. It is clear that Dominion is not operating in the best interest of the people who live nearby and must breathe in air dirtied by this particulate-laden, toxic plume. Dominion cannot continue its lax management at Salem Harbor Station which risks our health.”

For two decades, CLF, along with residents of Salem and neighboring communities, has fought to force Dominion, and before them the prior owners of the plant, to clean up or shut down Salem Harbor Station. The plant has a long history of violations related to its coal-burning operations, repeatedly exceeding legal limits on the discharge of known pollutants including, over time, mercury, coal ash and now, soot.

The Conservation Law Foundation (www.clf.org) works to solve the most significant environmental challenges facing New England.  CLF’s advocates use law, economics and science to create innovative strategies to conserve natural resources, protect public health and promote vital communities in our region.  Founded, in 1966, CLF is a nonprofit, member-supported organization with offices in Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

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NOTE: Photos of Salem Harbor Station’s plume are available at: http://www.flickr.com/photos/conservationlawfoundation/sets/72157623295027376/

The press is picking up the story – including the Boston Globe, the Boston Business Journal and the Salem News.