Merrimack and Schiller Station

Merrimack Station is New Hampshire’s largest coal-fired power plant, located in Bow, New Hampshire on the banks of the Merrimack River. Built in the 1960s, the plant is perennially among New Hampshire’s and New England’s top sources of toxic and carbon pollution. Merrimack is owned and operated by Public Service Company of New Hampshire (PSNH), a subsidiary of Northeast Utilities, New England’s largest utility company. PSNH also owns and operates Schiller Station in Portsmouth, a power plant with two coal-fired boilers built in the 1950s. Schiller also has a wood-fired boiler.

In 2011, CLF sued PSNH for violations of the Clean Air Act at Merrimack Station. CLF’s complaint explains that PSNH failed to obtain air permits for major projects that will increase Merrimack Station’s air emissions, which will harm the health and well-being of CLF members. Those permits would require PSNH to install more stringent and protective pollution controls that all new plants must include, reducing Merrimack Station’s emissions of a wide range of pollutants, beyond the reductions that Merrimack Station’s expensive new scrubber (which is limited to reducing sulfur dioxide and mercury emissions) can achieve. CLF’s case is pending before the federal district court in New Hampshire.

PSNH’s dirty, inefficient power plants aren’t succeeding in the marketplace and can’t compete with cheaper and cleaner power sources. Several of New England’s coal plants have recently closed, and the economic demise of coal energy in New England means that Merrimack Station and Schiller Station’s coal units are being used at historically low rates.

PSNH continues to operate Merrimack and Schiller Stations, causing major damage to New Hampshire’s environment and economy in the process. Empowered by state law to pass along the costs of its plants to ratepayers, PSNH is extracting more than a hundred million dollars per year in above market costs, payable to Northeast Utilities and its shareholders.

The economics of PSNH’s coal plants are unsustainable. Nothing represents their unacceptably high costs better than Merrimack Station’s $422 million scrubber project. PSNH is already recovering the cost of this “investment” from its customers with a temporary rate increase, and has requested an even higher permanent rate increase to recover scrubber costs. For years, CLF has been seeking meaningful scrutiny of PSNH’s planning and investments, but regulators have been unwilling to upset the status quo and hold PSNH accountable.

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 NH Public Utilities Commission (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.