That’s what’s at stake here, with Representative Keenan’s Section 42 in the new energy bill, legislation that could cost ratepayers upwards of $1 billion dollars. It’s guaranteed money (where else does that happen?) and a huge step backwards for Massachusetts and its reforms to bring down the cost of our electricity.
Section 42 would force tax payers to pay for electricity, even if it goes unused or is unneeded, so long as it was from a gas plant that was converted from a coal plant.
Of course, there’s only one plant project that would qualify in all of Massachusetts… and it just so happens to be in Representative Keenan’s district, chairman of the relevant committee. Surprise, surprise.
Keenan’s not resting on his laurels, either. It’s little wonder, since the Senate version of the bill has nothing like Section 42. So, Keenan’s going after all the prominent outside opponents, armed with a fantastic straw man.
Keenan, however, suggests that the environmentalists who have long fought Salem’s coal plant have in essence moved the goal line, noting that when he was city solicitor, the same groups were calling for gas as a cleaner alternative to coal.
See, they’re never going to be happy! They just don’t want a power plant! The only problem? The argument is incredibly disingenuous.
The goal post was moved by the New England ISO, when it said a plant at that site wasn’t needed. That’s what changed everything.
Don’t take my word for it.
“Even with the planned retirements of generation facilities over the next few years in New England, the last auction elicited nearly 4,000 MW beyond levels needed to ensure an ample 17 percent reserve margin,” Dolan wrote, adding that “modifications to the regional energy and capacity markets, not one-off transactions, are the better way to incent new generation when needed.”
So, not only does New England not need the extra power, it’s already producing 17% more power than it uses, even accounting for the planned plant closures.
Now, if the ISO said the Salem Power Plant should be retired, but another smaller one should replace it, then all of this may be a different story… but that’s not what happened.
Building that plant there is forcing ratepayers to pay for electricity that’s not going to be used, or what we like to call in the vernacular, “a wicked dumb idea.”
Unless, of course, you’re Dominion Resources, Inc, or get political contributions from them.
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Crossposted at www.RyansTake.net
but just good business, to manage utility output. Apparently, Dominion finds it cheaper to pass on the cost of surplus power to consumers than build a smaller plant or retool. Why can’t they sell the surplus? The bane of privately held utilities.
I haven’t read the bill, though I recall reading an earlier version which got cleaned up quite a bit. That written, (1) New England almost certainly produces LESS than 100% of our electricity — we import a substantial amount from Hydro Quebec, likely more than we export to Long Island through the Sound or into NY nearer Westchester County. That’s OK though — the electricity from HQ is very low cost and obviously a smaller environmental footprint.
2. Dolan’s comments should not be interpreted to mean that New England is producing 17% more than it uses. He stated that we have the ABILITY to produce 17% more than our peak hour of consumption — backup generators, etc. That’s a good thing, and normal planning for all regions of the country. That 17% includes backup gas and diesel generators, as well as demand response — the ability to pay organizations to turn off their electric use for a few hours to avoid rolling brownouts. Dolan is talking about capacity, not energy.
That written, I’d love for Salem Harbor to be redevloped as a tri-gen gas plant. A combined cycle natural gas plant, well built, would move ahead in the merit order and replace a more expensive gas plant, AND if they used the exhaust steam to heat and cool a development on the old site with commercial offices, retail, hospitality, and housing, they could have a wonderful outdoor shopping touristy area, with less expensive heating and cooling than anybody else is getting in the area. Do I think that ratepayers should fund it? Well, no. No way. However, it might be responsible for the state government to help make the whole project — not just the power plant — a reality.
of what I believe is the most current version…
http://www.mass.gov/legis/journal/desktop/Current%20Agenda%202011/H4225.pdf
A few points:
1. It requires but doesn’t define “quick start” capability in (ii), to facilitate further development of intermittent renewables (wind). That’s helpful, although without defining quick start well, it’s open to lots of interpretation.
2. (iii) requires site demolition and remediation. That’s a good thing, though I’m not sure why the state doesn’t compel the current owner to do the site remediation or make remediation [to residential/school levels, not low-remediation industrial] as a condition of sale. As it reads now, (iii) looks like a bail out of the current owner, who owns the benefits of the assets but also the liabilities.
3. (iv) includes “such new facility is reasonably expected to result in net benefits in terms of costs to electricity customers in the commonwealth.” This appears to ensure that this isn’t corporate welfare — that is, the project must have merit by reducing the cost of electricity to MA customers — it must be cheaper to operate than something else. This may also be the poison pill. ISO-NE generates on a merit stack — the most efficient plant goes first, then the next most efficient, etc. This means, loosely speaking: wind and solar, then hydro, then coal and gas [used to be coal then gas, but with recent price changes its not so cut and dried], then combustion turbines and oil. Thing is, there’s so much gas on the system now that the part of the bid stack where a new CC plant would land is quite flat — so even if it is slightly cheaper than most gas, it’s unlikely to change the winning bid on very many hours, and if it does, it’s unlikely to change it by very much. This means that the expected savings to ratepayers [across New England, not just MA] would be quite low. But that’s if it’s just bidding into the real time pricing. If utilities have to sign a PPA, then ratepayers hold all the risk. There’s a non-zero chance that gas prices go up, that renewables prices go way down, etc. In those cases, the utilities would have been legislatively forced to sign a contract to purchase power which is now more expensive than the alternatives. Not good.
Bottom line: I stand by my earlier post. I think that a great outcome for Salem and the Commonwealth would be full site remediation, a combined cycle natural gas plant [pipe fed, not LNG] with a much smaller footprint located there, and the rest of the lane used for a combination of public park space, “harborwalk” retail and tourism, LEED certified commercial office space, and LEED residential, all getting steam heat+cool and hot water from the waste heat from the power plant. If that happened, Salem would retain the significant property tax base, gain employment and population, gain tourism dollars, and have a total development which has a lower GHG emission rate than most other electricity generation in New England *and* gain building space with a lower GHG emission rate than most other built space in New England.
How to get there?
1. Make the current owners responsible for remediation. If they want to “sell” that responsibility to a new developer, fine — but site remediation must happen before the gas plant is built, not afterward. No weaseling out through bankruptcy, etc.
2. Don’t require utilities to sign PPAs. There’s no reason to force the hand of the utilities, who are already obligated to behave prudently.
3. Let Salem and the Commonwealth work together to figure out how to help the big project happen. The CC will happen if they can also sell their steam — they’ll be able to out-bid lots of other natural gas plants due to a higher efficiency. The key is to get the rest of it built, so that the CC plant has a buyer. This development I envision would be great for Salem. Salem and the Commonwealth could help by streamlining zoning, permitting, setting up an affordable housing portion to cross-subsidize in an appropriate manner, get any infrastructure upgrades nearby [roads, underground local (non-utility) gas and electric and CATV and telco lines all set, sidewalks, etc] good to go, etc.
This could be a success story worthy of textbooks in engineering, urban design, government, public health, and so on. Section 42 not only doesn’t accomplish that, it makes it impossible to accomplish.