Big Yogurt Takes on Big Coal

It's time folks in the Upper Valley started thinking about what's going ondown there at the other end of Interstate 89.

Yes, they¹re debating some important questions at the State House, but that's not what this column is about. Rather, the issue is the plume you can glimpse, straight ahead of you in the distance, as you approach Concord from the north.

Beneath that plume is Merrimack Station in Bow, where Public Service Companyof New Hampshire (PSNH) cranks out 433 megawatts of electricity by burning coal. The central place that coal occupies in contributing to climate change, thus threatening the continued existence of civilization as we know it, is a familiar fact ­ but around here we tend to think of coal as someone else' sproblem. Wrong!Add to Merrimack Station the coal power PSNH produces at Schiller Station in Portsmouth and you get to 533 megawatts of climate change.

This is by far the biggest source of utility-owned electricity in either NewHampshire or Vermont, now that we have sold off the local nuclear power plants to independent producers.

Three years ago, PSNH announced steps to achieve significant reductions inthe amount of highly toxic mercury that Merrimack Station emits. The utilitycommitted to installing new scrubbers that would reduce mercury emissions by 80 percent. But PSNH harbors bad memories of its 1988 bankruptcy, caused by its investment in the Seabrook nuclear power plant. Thus it did not want to invest in the scrubbers without some assurances. ­ So it persuaded theLegislature to pass a bill endorsing the project.

Since then, two big things have happened: The price of the scrubber project has nearly doubled ­ from $250 million to,as of last July, $457 million. And global warming is now ­ -- pun intended ­ -- a front-burner issue, leading many to start wondering whether New Hampshire should continue to depend on coal for electricity.

The sticker shock set in last summer, just as I was leaving my job as general counsel of the New Hampshire Public Utilities Commission to become associate director of the Institute for Energy and the Environment at Vermont Law School. I helped the PUC decide to open an investigation, not into the scrubber project itself but into whether the agency even had the authority to review the project. The PUC ultimately said it lacked such authority ­ -- a decision in which I played no part ­-- and the question is now on appeal to the New Hampshire Supreme Court.

Pursuing that appeal ­ and making the case that, despite their earlier go-ahead, the Legislature should take a second look at the Merrimack Station scrubber project, ­ is an interesting coalition of electricity-using businesses, led by Stonyfield Farm yogurt CEO Gary Hirshberg. Among other things, Hirshberg and his allies have commissioned a report by Kenneth Colburn, the respected former head of the air bureau at the New Hampshire Department of Environmental Services. According to Colburn, the scrubber project essentially guarantees that NewHampshire will continue to use coal power for the next couple of decades as PSNH takes advantage of the language in the statute entitling it to recover the cost of the project from customers. But after looking at all costs ­ including the likely addition of a national carbon tax or a so-called "cap and trade" program that would function like a carbon tax,­ the pricetag for New Hampshire utility customers will range from $1.3 billion to $2.9 billion, according to Colburn. Hirshberg and his allies say that is too much.

Count me among PSNH's fans. The Company does an excellent job of providing relatively low-cost electricity to its customers. It has been unfairly thwarted by the Legislature in its desire to build renewable generation facilities in Coos County and elsewhere on the dubious ground that we should leave this challenge to independent electricity providers who take the financial risk themselves rather than impose it on their customers. (It's an enticing theory, but so far nobody is building anything and privatizing those risks means higher prices.)

It is odd that New Hampshire policymakers, so skeptical of PSNH in other contexts, seem so acquiescent in allowing this scrubber project to go forward. PSNH is relatively invisible in the Upper Valley, with few local customers. But if you care about global warming, this is a story worth following.

[From the March 5, 2009 edition of the CV Spectator, with a different headline.]