Cleaning up Salem Harbor

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July 19, 2012, 7:37 pm
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(NECN: Peter Howe, Salem, Mass.) For decades, environmentalists have crusaded to shut down the coal- and oil-burning power plant on the coastline of this historic North Shore city.

"That plant kills people!" Mitt Romney, then a new Massachusetts governor, famously declared in February 2003 as he outlined plans to crack down on emissions from the plant and other old fossil-fuel powered plants.

Now, after years of delays, it appears Salem Harbor will finally go off line in 2014 – but that could leave a nasty industrial hulk on a dirty 60-acre site and a $4 million hole in Salem’s annual budget from lost property taxes.

So Rep. John Keenan, a Salem Democrat who happens to also chair the state Legislature’s energy committee, is pushing an innovative, creative – and highly controversial – legislative provision to get investors to redevelop Salem as a much cleaner-burning natural-gas-powered plant.

As legislative leaders wrangle over the final details of a major energy bill they hope to send Gov. Deval L. Patrick before July 31, Keenan’s been pushing a provision that would guarantee energy companies redeveloping now-operating coal- or oil-powered plants to run on natural gas could get 15-year contracts from their local utilities if they met several conditions, among them: They clean up and remediate environmental problems at the plant site, the new generating units have what’s called "quick start" capability to provide backup power stabilizing wind- and solar-energy projects who output may intermittently rise and fall, and the Massachusetts Department of Public Utilities certifies that the projects provide a "net benefit" to consumers.

However, the plan alarms many energy companies, and the New England Power Generators Association ran full-page ads attacking the plan in the Boston Herald and Boston Globe this week.

NEPGA says the Keenan plan amounts to a massive government manipulation of a wholesale power market that’s been deregulated since 1997, and will kill investment and jobs elsewhere.

"If you add something else that has an advantage that no other market participant has, that something else that otherwise would be economic would fall off the plate and the jobs and the taxes associated with those facilities would be lost," Dolan said.

While the state’s efforts to push National Grid and NStar to buy billions of dollars in above-market-priced power from the Cape Wind project have been widely attacked and challenged in lawsuits as an expensive sweetheart deal, Dolan said Cape Wind at least represents "an entirely new kind of power source" – offshore wind – while the Keenan plan simply pushes more of what investors have already spent billions building around Massachusetts over the last 15 years: power plants fueled by natural gas.

Despite the raging controversy, there could be a path to a compromise: Energy companies to add onto utility bills a small "decommissioning charge" for conventional power plants like Salem Harbor, either a new fee, or using what’s already connected through “transition fees” to pay for cleaning up and shutting down coal- and oil-powered plants going defunct.

Dolan said it appears in Salem, "The total cost to redevelop that type of facility, it's probably in the neighborhood of $50 million to $60 million."

But, Dolan said, the kind of 15-year utility power contract National Grid customers would have to pay for the Salem overhaul he envisions "is putting in place a billion-dollar contract to fix a $50- to $60 million problem, and that billion dollars would be borne by consumers."

Keenan, however, has written to colleagues that the NEPGA claims are "irresponsible, hyperbolic baloney," stressing that no coal or oil to gas conversion would go through in Salem (or at other plants like Mt. Tom in Holyoke or Canal in Sandwich or potentially Brayton Point in Somerset) unless DPU regulators certify there is a net benefit to consumers. Keenan says the fact that utility customers pay in advance for the future of decommissioning nuclear plants – but not other kinds of plants – may be an example of a problem industry deregulators never envisioned in the mid-1990s, and need to think about addressing now as cheap, abundant natural gas looks poised to knock many dirtier plants out of business, with no clear indication of how those shuttered plants don’t become hulking, toxic behemoths blighting the landscape.

With videographer David Jacobs.

Tags: massachusetts, Peter Howe, Salem, investors, energy, north shore, Salem Harbor power plant, coal power plants
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