Outlook with your head in the sand? Pretty dark, even when the future around you is bright. (photo credit: flickr/tropical.pete)

In a public hearing tomorrow, a legislative committee of the New Hampshire House will take up a proposal – House Bill 1238 – to force Public Service of New Hampshire’s dirty, costly power plants to confront the realities of the electric marketplace. The bill would require PSNH to sell (“divest”) its plants by the end of next year. Tomorrow’s hearing on House Bill 1238 is scheduled for 8:30 am in Representatives Hall under the dome of the New Hampshire State House, on North Main Street in Concord.

The debate is long overdue and comes at a critical time. Over the last several years, New England’s restructured electric market has overwhelmingly turned away from uneconomic facilities like PSNH’s coal and oil-fired power plants and toward less-polluting alternatives, especially natural gas. For most New England customers, this technology transition has resulted in lower electric bills, and we have all benefited from cleaner air. In the next few years, well-managed competitive markets are positioned to help us move to a real clean energy future that increases our use of energy efficiency, renewable resources, demand response, and innovative storage technologies.

CLF has played a key role in this process by, among other things, ensuring that coal plants are held accountable for their disastrous impacts on public health and the environment. As highlighted in an excellent op-ed in the Concord Monitor this week, CLF’s work includes our federal court case against PSNH’s Merrimack Station, New Hampshire’s biggest source of toxic and greenhouse gas emissions, which has repeatedly violated the Clean Air Act by failing to get permits for major changes to the plant.

Meanwhile, like the proverbial ostrich, PSNH gets to ignore what the market is saying. PSNH’s state-protected business model is a relic that has become a major drag on the pocketbooks of New Hampshire ratepayers and New Hampshire’s economy. Current law protects PSNH from market forces because it guarantees PSNH and its Connecticut-based corporate parent Northeast Utilities a profit on investments in PSNH’s power plants, whether or not they operate and whether or not they actually make enough money to cover their operating costs – an astounding rule for the small-government Granite State, to be sure.

The costs of this guarantee fall on the backs of New Hampshire residents and small business people, who effectively have no choice but to pay for PSNH’s expensive power. For their part, larger businesses have fled PSNH in droves, for cheaper, better managed suppliers. This has shrunk the group of ratepayers who are responsible for the burden of PSNH’s high costs, translating into even higher rates for residents and small businesses.

PSNH customers face the worst of both worlds – electric rates that are among the highest in the nation and a fleet of aging, inefficient, and dirty power plants that would never survive in the competitive market.

It is by now beyond dispute that these plants are abysmal performers. Last year, CLF and Synapse Energy Economics presented an analysis to New Hampshire regulators showing that the coal-fired units at PSNH’s Schiller Station in Portsmouth will lose at least $10 million per year over the next ten years, for a total negative cash flow of $147 million. The analysis did not depend on natural gas prices remaining as low as they are now or any new environmental costs; because it is old and inefficient, Schiller will lose money even if gas prices go up and it doesn’t need any upgrades. According to information provided by PSNH to regulators last week, PSNH’s supposed workhorse Merrimack Station will not even operate for five months this year because it would be uneconomic compared to power available in the New England market. Nonetheless, PSNH ratepayers will be paying for the plant even when it does not run.

It will only get worse: PSNH’s rates could skyrocket later this year if New Hampshire regulators pass on the bill for PSNH’s $422 million investment in a scrubber for Merrimack Station to ratepayers, and other costly upgrades of PSNH’s fleet may be necessary to comply with environmental and operational requirements in the future. And the PSNH-favored Northern Pass project, if it ever gets built, would only exacerbate the situation for PSNH ratepayers by making PSNH power even less competitive and reducing the value of PSNH power plants.

PSNH is hitting back against House Bill 1238 with its typical full-court press of lobbying and PR, and we can expect a packed house of PSNH apologists at tomorrow’s hearing. PSNH has even resorted to starting a Facebook page – “Save PSNH Plants” – where you can see PSNH’s tired arguments for preserving the current system plants as a “safety net” that protects PSNH employee jobs and a hedge against unforeseen changes in the energy market. The pitch is a little like saying that we should pay Ford and its workers to make Edsels half a century later, just in case the price of Prius batteries goes through the roof. Make no mistake: PSNH is asking for the continuation of what amounts to a massive ratepayer subsidy for as far as the eye can see.

Public investments have gotten a bad name lately, but it is at least clear that sound commitments of public dollars to energy should be targeted, strategic, and forward-thinking. They should help move us, in concert with the much larger capital decisions of the private sector, toward a cleaner energy future. Instead, PSNH is fighting for New Hampshire to keep pouring its citizens’ hard-earned money, year after year, into dinosaur power plants. That’s a terrible deal for New Hampshire, and CLF welcomes the House’s effort to open a discussion on how to get us out of it.

Working with Americans for a Clean Energy Grid and the New England Clean Energy Council we here at the Conservation Law Foundation had the privilege to co-sponsor the New England Clean Energy Transmission Summit.  We were overwhelmed by the massive turnout and tremendous interest from the general press as well as trade press (subscription required).

I will write more about the event in later posts but we wanted to get out into the world the videos of two of the keynote speeches.

Our informative and inspiring lunch speaker was Rep. Ed Markey (D-Malden MA), the Ranking Democratic Member of the House Natural Resources Committee and Senior Member of the Energy and Commerce Committee. The whole video is well worth watching and features some powerful comments about climate, the state of politics and reasons for both fear and hope.

The last panel featured a video message from Bill McKibben who was unable to follow through on his plans to come and speak because of his need to be in Washington to lead efforts to “blow the whistle on Big Oil” and how dirty energy was cheating in Congress.  But give him a listen to understand where he was and the essential imperative facing our energy system, environment, nation and world.

Overwhelming thanks to the folks at Americans for A Clean Energy Grid who did the hard work of managing the event, filming it and now hosting on their website all the videos and powerpoints from the event.

photo credit: Witthaya Phonsawat

With the Northern Pass project on the table, as well as other looming projects and initiatives to increase New England’s imports of Canadian hydroelectric power, the region’s energy future is coming to a crossroads. The choice to rely on new imports will have consequences that endure for decades, so it’s critical the region use the best possible data and analysis to weigh the public costs and benefits of going down this road. To date, there have been almost no objective, professional assessments of the ramifications.

Today, CLF is making available to the public a technical report prepared by Synapse Energy Economics addressing a crucial issue: the potential effects of new imports on the region’s own renewable power industry. 

The report, Renewable Portfolio Standards and Requirements (PDF), explains how the Renewable Portfolio Standards (RPS) of each New England state and New York address hydropower and then examines the potential effects of allowing Canadian large-scale hydropower to qualify for incentives by allowing such power to count toward states’ goals for renewable power under RPS programs.

Vermont is currently the only state that allows Canadian hydropower to qualify for its (now voluntary) RPS. If Vermont elects to use Canadian hydropower to fulfill all or most of its RPS goal (which is contemplated by pending legislation that would make Vermont’s RPS mandatory), there would be a modest but important reduction in the incentives available to new renewable projects in the region. The report concludes that there would be a much more significant impact if the RPS programs in other states were changed to allow Canadian hydropower to qualify (as was proposed in New Hampshire and Connecticut earlier this year and is being discussed right now in Massachusetts). In that scenario, imports from Northern Pass (or import projects of similar size) would swamp the market, taking up 45% of the region’s mandate for new renewable power and deeply undermining the viability of new renewable development in the Northeast.

This finding is a new illustration of why CLF opposes changing RPS laws to count large-scale hydropower toward the region’s renewable goals, a result that would both harm local renewable projects and send incentives funded by New England ratepayers out of the country to suppliers that do not need them.

For their part, Northern Pass’s developers have downplayed any risks to local renewable energy but have refused to refrain from lobbying for and securing the very changes to the RPS laws that Synapse predicts would, when paired with new imports through Northern Pass, cut the legs out from under renewable energy based in New England. It is no wonder that it’s not only CLF sounding the alarm on this issue:  electric industry veterans like Cynthia Arcate and the trade association of New England’s competitive electric generating companies have also expressed concern.

The bottom line for CLF: any plan to increase imports will need a robust and comprehensive set of enforceable commitments – which are completely absent in the current Northern Pass proposal – for the region to ensure that New England’s own renewable energy industry will prosper and grow into the future. 

For more information about Northern Pass, sign-up for our monthly newsletter Northern Pass Wire, visit CLF’s Northern Pass Information Center (http://www.clf.org/northernpass), and take a look at our prior Northern Pass posts on CLF Scoop.

Protesters against Keystone XL - November 6, 2011 (photo credit: flickr/tarsandsaction)

Last week, a major disaster for our climate and our nation’s clean energy future was averted – at least for now – when the Obama administration announced that it won’t consider approving the Keystone XL pipeline’s border crossing permit before it reconsiders the Keystone XL pipeline’s environmental impacts and the potential alternatives to the proposal on the table.  For all the reasons that my colleague Melissa Hoffer articulated in her post last week, the Keystone XL victory was a resounding, if limited, triumph with important lessons for environmental and climate advocates across the country as we confront, one battle at a time, the seemingly overwhelming challenge of solving the climate crisis.

The Keystone XL decision also hits home in another way. It sends an unmistakable signal that the federal government’s review process for New England’s own international energy proposal – the Northern Pass transmission project – needs the same type of new direction.

The parallels between the State Department’s Keystone XL environmental review and the mishandled first year of the U.S. Department of Energy’s review of Northern Pass are striking. In both cases, we saw:

• Troubling, improperly close relationships between the developer and the supposedly independent contractors conducting the environmental review, with unfair and inappropriate developer influence on the review’s trajectory, undermining the public legitimacy of the review process;
• An extraordinary grassroots uprising against the proposal from diverse groups of residents, landowners, communities, businesses, and conservation and environmental groups;
• Massively expensive lobbying and public relations campaigns by proponents designed to confuse and mislead lawmakers and the public
• Repeated failures by permitting agencies to ensure fair, open, and truly comprehensive review of the full range of impacts, including climate impacts, and the reasonable alternatives for meeting our energy needs in other, less environmentally damaging ways.

With all the legal, procedural, and substantive deficiencies our national advocate colleagues have been pointing out for years, the Keystone XL review (before last week) is a dramatic example of what we can’t allow to happen with Northern Pass. Right now, things don’t look good – it appears that the Department of Energy is engaging in an “applicant-driven,” narrow review of a few potential project routes, not the broad, searching analysis CLF and many others have demanded again and again (and again).  Last week’s decision to conduct a wide-ranging new review of Keystone XL shows that there is still the opportunity (and now a clear precedent) for the Department of Energy to bring the same spirit of renewed scrutiny and public responsiveness to its review of Northern Pass.

New Hampshire and New England deserve an impartial, comprehensive, and rigorous review of the Northern Pass project – and all reasonable alternatives – by the permitting agencies entrusted with protecting the public interest. Indeed, what we need now is a serious regional plan that addresses whether and how best to import more Canadian hydropower into New England and the northeastern U.S. With huge projects like Keystone XL and Northern Pass on the table, our nation’s energy future is at stake, and it has never been more important – for our communities, economy, natural environment, and climate – to get it right.

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.

Are you concerned about the Northern Pass transmission project? Do you want to learn more about what it could mean for New Hampshire and New England’s energy future, for our climate, for energy rates, and for the communities and natural environment of New England and Québec? Do you want to keep up with the latest developments as the project progresses through the permitting process?

If you answered yes to any of these questions, you’ll want to sign up for CLF’s new email newsletter – Northern Pass Wire.  In a concise format, Northern Pass Wire will provide the latest news and analysis regarding the Northern Pass project direct from CLF advocates, with links to additional resources from CLF’s Northern Pass Information Center, our latest Northern Pass posts here on CLF Scoop, and CLF’s recent legal filings. Northern Pass Wire will also keep you informed about ways you can get involved and make your voice heard as the permitting process for the Northern Pass project continues. We expect to publish Northern Pass Wire about once a month, and perhaps more frequently when events warrant. The first edition can be previewed here, and you can sign up to get Northern Pass Wire here.

Please sign up and encourage your family, friends, and colleagues to do the same!

Click on the image to preview the first edition of CLF's Northern Pass Wire

photo credit: Hope Abrams/flickr

Here in New Hampshire, the leaves have turned.  What hasn’t changed is that the environmental review of the Northern Pass proposal remains stalled while the project developers – Northeast Utilities (and its subsidiary Public Service Company of New Hampshire) and NSTAR – seek a new route for the northernmost 40 miles of the project.  It’s a disgrace that the U.S. Department of Energy (DOE) has so far refused to use the developers’ significant delay to assess the nature and extent of New England’s need for Canadian hydropower and to develop an appropriate plan to bring that power into the region, as CLF and others have been requesting since April.

While DOE is in a holding pattern, CLF is continuing to fight for a fair and comprehensive environmental review of the Northern Pass project.  Earlier this month, CLF filed new comments with DOE, supplementing the detailed comments we filed in April.  Our new comments address:

• Why CLF has renewed concerns about DOE’s control over its new environmental review contractors.  Based on our review of the Memorandum of Understanding between Northern Pass, DOE, and its new contractors, posted here (PDF), we explain that Northern Pass could still have an unfair and inappropriate influence on the content of the environmental impact statement and the schedule for completing it.
• What the Northeast Energy Link proposal means for the Northern Pass environmental review.  The recently announced Northeast Energy Link proposal, along with the Champlain Hudson Power Express project, makes it clearer than ever that we need a regional assessment of our energy needs.  These other two transmission projects also show that burying transmission lines in transportation rights-of-way is an abundantly reasonable alternative to overhead lines.
• How Northern Pass hasn’t clearly disclosed the source of power for the project.  We bring to DOE’s attention important information, obtained by CLF through its cross-examination of an executive of Northeast Utilities before Massachusetts regulators, that the source of Northern Pass’s power is likely to be new hydroelectric projects that Hydro-Québec is now in the process of designing and building.  CLF is especially troubled by the new information because the impacts of the project are much more significant if it causes the construction of new dams and the associated negative environmental impacts, including well-documented spikes in early greenhouse gas emissions from flooded land.  Northern Pass and its parent companies have consistently failed to acknowledge that these emissions undermine their claims about the reductions in emissions the project will supposedly provide.

A copy of our new comments is available here.  We also filed a Freedom of Information Act request with DOE, seeking to obtain a copy of the “Consulting Services Agreement” between Northern Pass and the environmental review contractor team.  The Memorandum of Understanding suggests that this separate contract includes important information on the budget and schedule for the environmental review, and the public deserves to know these details.

With the permitting process due to continue when Northern Pass announces a new northernmost route, CLF will be launching new ways to keep you informed about the latest Northern Pass news and the best ways for you to get involved and make your voice heard. Please stay tuned!

For more information about Northern Pass, 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.

photo credit: l . e . o/flickr

With each passing day, the dire reality of PSNH’s coal-fired business model is becoming clearer in New Hampshire.  The cost of operating PSNH’s obsolete power plants continues to grow, accelerating the Company’s death spiral where fewer captive ratepayers are saddled with unsustainable above-market rates as more PSNH customers choose to buy power from better managed competitive suppliers.  We are also learning that Northern Pass will make the situation worse for ratepayers, not better, and that PSNH and its Northern Pass partners are poised to pull in huge profits.  In just the last few days:

• PSNH revealed that, as it has begun bringing online its $450 million scrubber project at PSNH’s 50 year old coal-fired Merrimack Station, the bill is now coming due. If state regulators at the New Hampshire Public Utilities Commission (PUC) approve passing the cost on to ratepayers, the energy rates for PSNH customers – already the highest in New Hampshire by a wide margin – will go up by at least 1.2 cents per kilowatt hour, or almost 15%.  CLF is seeking to intervene in the PUC proceeding on the rate increase.  PSNH, unsurprisingly, wants to keep CLF out, in addition to any other party seeking to intervene on behalf of ratepayers.  There is no better illustration of the folly – for ratepayers and the environment alike – of major new investments in coal-fired power plants than PSNH’s flawed effort to extend the life of Merrimack Station.  These investments are a disaster for ratepayers, and don’t even ensure compliance with the plant’s environmental requirements – a case CLF is making right now in federal court with regard to other modifications to Merrimack Station.
• Large commercial and industrial customers with the buying power to avoid the high rates for PSNH’s fossil power continue to do so in dramatic numbers.  PSNH announced that, in September, about 82% of these customers were buying power elsewhere in the market (accounting for 93% of the power delivered to these customers) – a phemonenon known as “migration.”  Meanwhile, more than 99% of New Hampshire residents in PSNH territory were left behind to pay PSNH’s already exorbitant rates.  The scrubber rate increase is going to make this situation even worse for residents – additional businesses will find other suppliers and PSNH will need to jack up its rates even more.  More cost-effective competitive suppliers are cleaning PSNH’s clock among large customers.  Given the company’s excessive and increasing rates, residential ratepayers are starting to vote with their pocketbooks for more sustainable energy supplies.
• It is becoming increasingly clear that the current Northern Pass proposal is designed around PSNH’s bottom line, not the interests of New Hampshire ratepayers.  As we’ve mentioned before, the large customer “migration” problem and its upward pressure on homeowners’ electric bills are likely to get worse with Northern Pass, which would further depress regional wholesale electric rates and encourage more customers to leave PSNH.   Adding in the cost of the scrubber will only widen the divide between the businesses that can choose other suppliers and potentially benefit from Northern Pass, and the residential customers who are currently  stuck with PSNH. A new wrinkle emerged last week – testimony from PUC staff showing that PSNH’s consultants estimated a year ago that Northern Pass will cannibalize PSNH’s already meager revenues from Newington Station, PSNH’s little-used power plant in Newington, New Hampshire, that can operate with either oil or natural gas.  Northern Pass would mean it would almost never run and that the investments ratepayers have made over the years to keep Newington Station operating will essentially be lost.  This same dynamic will apply to the rest of PSNH’s power plants:  Northern Pass will diminish their market value further exposing New Hampshire businesses and residents to the risk of excessive costs.  Once again, a series of poor decisions and self-interested advocacy by PSNH (at the expense of ratepayers) is forcing the legislature to intervene.

The costs of PSNH’s coal-fired power plants are becoming untenable, and a radically redesigned Northern Pass proposal and other alternatives could help PSNH meet its customers’ power needs more cheaply and with less damage to public health and the environment.  Instead of planning for a cleaner energy future, PSNH is working only to preserve its regulator-approved profits.  CLF will be using every tool at our disposal to force a rethinking of PSNH’s approach.

The Vermont Public Service Board recently approved a contract for Vermont utilities to buy power from Hydro-Québec for 20 years.  The new contract will supply about 20% of Vermont’s power needs, bringing 225 MW of power into Vermont to replace an expiring contract for 310 MW.  The starting price for the power is about $58.07 per MWh and will be adjusted annually based on regional electricity prices.  Vermont regulators found the agreement provides Vermont financial benefits by locking in a stable price that is lower than many other sources of electricity.  Contracts such as this represent only the tip of the iceberg for power imports from Québec, as Hydro-Québec partners to build transmission lines through New York and New Hampshire.

Hydro-Québec is a government-owned utility with some nuclear and fossil fuel plants, 60 hydroelectric generating stations, including seven new dams built since 2000, and significant new expansions on the horizon, including 3,000 MW of new hydropower projects in Québec’s far north as part of the province’s $80 billion “Plan Nord.”  Because Hydro-Québec supplies more than enough power for its own region, the expansion represents Hydro-Québec’s commitment to selling more power to other areas, including New England.

Regulators quickly approved the contract, citing its purported value as a relatively low-carbon and low-cost power source.   However, importing vast amounts of power from Québec is no “green” silver bullet.  Last October, CLF highlighted troubling aspects of the power deal between Hydro-Québec and Vermont utilities. CLF showed that the power deal falls short by failing to honestly represent its environmental impacts.  A few of the problems with the deal:

• Without adequate verification, the environmental claims aren’t necessarily accurate.  A portion of the claimed “clean power” could really be coming from coal or other fossil fuels.  Under the contract, the energy sold must be 90% hydropower, but without any independent verification, it is impossible to ensure that Vermont gets what it bargained for.
• The contract fails to address impacts of new dams that would flood vast areas of northern Québec. Nothing in the contract limits Hydro-Québec’s ability to build new dams as demand for energy grows; this means the contract with Vermont tacitly supports new dams and the resulting damage.
• The contract allows Vermont utilities to sell the renewable claims elsewhere when Vermont itself has no firm obligation to keep its energy supply low-carbon.  Unlike other New England states, Vermont has no requirement now to purchase renewable power. This means that Vermont utilities benefit financially from a system it is not truly a part of, and would allow other states to continue to rely on dirty power sources such as coal.

As a region, we must ensure any new commitments to import power from Canada clearly advance our clean power goals.  Any new imports of hydropower should replace the power we are currently getting from coal and other dirty, inefficient power plants.  Only then can we actually lower our carbon emissions from electricity.   The challenge for New England is to make sure any level of imports meets our needs, reduces greenhouse gas emissions, and avoids exporting environmental problems to the north.  Indeed, that challenge is why CLF is calling for a comprehensive, regional analysis of imports from Canada within the Northern Pass permitting process.  CLF continues to push for greater reliance on cleaner energy resources and to demand honest evaluations and representations of environmental benefits and impacts.

PSNH: In a death spiral? (photo credit: CC/Nick Seibert)

In every possible way – on television, in mailings, and on the web – New Hampshire has heard again and again that the proposed Northern Pass transmission project will reduce electric rates for New Hampshire customers. The claim is at the core of PSNH’s case that the project is a good deal for New Hampshire. If only it were true…

As I mentioned in a post last month, the very design of the project as it stands is for reduced electric rates to benefit only those ratepayers that get their power from the regional electric markets. In New Hampshire, homes and small businesses in PSNH territory would see very little benefit because their energy rates are overwhelmingly tied to propping up PSNH’s old, inefficient fleet of coal-fired and oil-fired power plants.  These plants would not be able to compete with other cleaner power sources if forced to compete in the marketplace, something New Hampshire law does not currently allow and PSNH has fought to avoid. (Supposedly, an agreement between PSNH and Hydro-Québec for some power for PSNH customers is in the works, but, if it ever materializes, Northern Pass has said it would only be for a small amount of power, which would not do much to change PSNH’s overall portfolio. Northeast Utilities admitted as much in testimony before the Massachusetts DPU this week and also noted that there is “really little activity” around securing any such agreement.)

As explained in a piece on NHPR featuring our own Jonathan Peress, the above-market costs of PSNH’s aging fleet are causing large customers to buy power from (or “migrate” to) cheaper suppliers. Regulators this week turned back PSNH’s attempt to saddle those customers with its fleet’s escalating costs. But this situation is creating a so-called “death spiral,” because PSNH is forced to raise its rates again and again on a shrinking group of customers – homeowners and small businesses who do not have the purchasing power to contract with another supplier.

What does this all have to do with Northern Pass? The truth is that Northern Pass will – indeed, is intended to – make the “death spiral” worse.  If Northern Pass lowers the regional price of power as all those ads proclaim, it will make PSNH power even less competitive, causing even more customers with choices to leave PSNH behind.  PSNH spokesman Martin Murray so much as promises that result when he says in the NHPR piece that Northern Pass power will not displace PSNH generation. As Jonathan explained on NHPR, that means that the same homeowners and small businesses that will have to deal with 180 miles of new transmission lines will have higher, not lower, electric rates. This is not the Northern Pass story PSNH has been telling.

None of this makes sense. PSNH’s coal- and oil-fired power plants are bad for ratepayers and disasters for public health and the environment. As our lawsuit filed last week makes clear, PSNH’s efforts to prop up its largest plant failed to comply with even basic emissions permitting requirements and have increased that plant’s emissions. Any plan to import Canadian power with PSNH’s name on it should provide real benefits to its own customers and focus on responsibly freeing New Hampshire (and the lungs of millions of New Englanders) from PSNH’s dirty, uncompetitive dinosaurs.

ADDED: I should also point out, in the same Massachusetts DPU proceeding mentioned above, that counsel for NSTAR (the junior partner in Northern Pass) asserted that “[i]t’s entirely speculative as to what the impact of Northern Pass will be on rates in New Hampshire, and then [migration].”  Quite a statement given Northern Pass’s public relations campaign asserting that rates will go down. And we disagree with NSTAR’s counsel wholeheartedly. It is reasonable – not speculative – to expect the current proposal will lead to higher rates for PSNH ratepayers.