Lights versus Trees

The Union Leader points out that we have short memories when it comes to clearing tree branches from power lines.

"People like trees, but they also like electricity and heat."

So says Epping Town Administrator Dean Shankle, who faults Public Service of New Hampshire for scaling back a tree-trimming operation in town. Of course, PSNH scaled back its operation after complaints, including some from town officials, that it was going to take too many trees and change the view along Main Street.

This is what is known as being between a rock and a hard place. It also proves what short memories people have. It was less than a year ago that ice storms brought down thousands of tree limbs and knocked out power to thousands of Granite Staters for days and, in some cases, a week or more. This was a matter of more than a little inconvenience. It cost thousands of dollars in lost business time, closed schools and jeopardized the health of shut-ins.

Court rules for PSNH

David Brooks reports in the Nashua Telegraph on the Supreme Court's decision siding with PSNH and against those looking to block pollution controls in Bow.

The last-ditch effort to halt the construction of a $450 million scrubber system at New Hampshire's largest coal-fired power plant has been tossed out by the state Supreme Court.

In a ruling released Wednesday, the court said that opponents of the plan had no legal standing to block a Public Utilities Commission decision allowing the construction to go forward.

PSNH is building a huge "scrubber" and associated processing buildings at the 473-megawatt Merrimack Station plant in Bow, one the state's largest power plants. The scrubber will remove most mercury and sulfur – both serious pollutants – from the power plant's emissions. The scrubber was required by state law. (more)

NH Supreme Court rules against Big Yogurt

In a ruling sure to inspire cynics who thought our state was firmly in the grasp of Big Yogurt's control, the New Hampshire Supreme Court today denied the appeal of Stonyfield Yogurt and other PSNH critics who sought to block installation of a mercury scrubber at the Merrimack Station Power Plant. The six-page decision found that the plaintiffs didn't have standing to block the move, since it won't affect rates unless and until the Public Utilities Commission agrees to higher rates.

Such future harm is insufficient, as a matter of law, to confer standing upon the petitioners to appeal the PUC’s decision. Accordingly, we dismiss the appeal.

Complete Ruling

Charlie Arlinghaus has documented Stonyfield's efforts to stop PSNH from burning coal. Installation of the scrubber was mandated by the state, after the very same critics complained about mercury pollution from the coal burning power plant. Once the scrubber was mandated, they shifted their argument from the environmental to the financial, claiming that the pollution controls they wanted made the power plant too expensive to operate.

This is coming from a group of plaintiffs that don't want the United States to burn coal for electricity. I would have more sympathy for their point of view if they were honest about their goals, instead of pretending to stand up for us as ratepayers.

Vote big boost for PSNH scrubbers

David Brooks and Kevin Landrigan report in the Nashua Telegraph about a key Senate committee voting down a move against the Bow power plant:

hursday's unanimous ruling by the Senate Energy, Environment and Economic Development Committee doesn't end the complicated debate, since the legislation must still be taken up by the entire Senate, and a legal fight is waiting to be heard by the state Supreme Court.

But the vote was a big win for Public Service of New Hampshire as well as for the unions that had rallied against the bill, which would have required the Public Utilities Commission to oversee a study about whether the scrubbers were still in the public interest.

Union officials, who packed an earlier hearing on the bill, SB 152, said the legislation might threaten at least 200 construction jobs over the next three years at the plant.

Utility players: Dangerous regulations

The Union Leader editorializes against a pair of bills that is sees as legislative micromanagement of Public Service Company of New Hampshire:

In 2006, the state required Public Service of New Hampshire to install a mercury scrubber at its Merrimack Station coal-burning power plant in Bow. The law did not cap the price of the project. In the meantime, the estimated cost has risen from $250 million to $457 million. House Bill 496 would cap the amount of PSNH ratepayer dollars that could go to the scrubber project at $250 million.
This makes zero sense. It would scrap the project, which would put the plant out of compliance with emissions regulations, which would force the plant's closure. PSNH would then have to buy power on the market, costing ratepayers much more than the scrubber would cost.

Big Yogurt Fights Back

You can't take on a powerful political force like Big Yogurt without expecting some backlash. Today, Gary Hirshberg responds to Charlie Arlinghaus's column about the Bow power plant:

In recent months, many states have re-examined coal projects. Last week, Louisiana's Public Service Commission temporarily suspended work on the $1.8 billion Little Gypsy repowering project to "review the economics" of a new petroleum coke and coal upgrade in light of lower gas prices, climate change concerns and rising project costs.

PSNH has stated that it welcomes public review of the scrubber project. But all the company has done is hire lawyers, lobbyists, and public relations consultants to oppose legislation that would require one.

Big Yogurt vs. Big Coal

By CHARLES M. ARLINGHAUS

In the biggest political grudge match of the year, Big Yogurt is taking on Big Coal, with hundreds of millions of dollars hanging in the balance.

A few years ago, the Legislature passed a law requiring the state's largest utility, Public Service of New Hampshire (PSNH), to install a mercury scrubber on its coal-fueled power plant in Bow. Because the cost of construction is rising, the expected cost of the multi-year project rose from about $250 million to about $450 million.

Because PSNH is a public utility, the cost of operating the plant is borne directly by ratepayers. Think of public utilities not as private companies but as quasi-government departments. We provide electricity to every citizen and contract over the long term with a single company in the service area. PSNH is the provider of that service for the largest part of the state. Its costs and profits are strictly regulated in filings before the Public Utilities Commission.

This is a double-edged sword for ratepayers. For many years, we had among the highest electric rates in the region because we were paying off the building costs of power plants. Recently, that has turned into an advantage as the large plants have been paid off. Think of it as finally paying off the mortgage on your house.

In addition, we reap the cost benefits of coal being among the cheapest power sources. Rather than paying the much higher market rate for power, ratepayers benefit from the current low cost of coal being produced at a plant that has finally been paid for.

Adding pollution control equipment is expensive and raises the cost of providing that electricity. The cost of the mercury scrubber will be spread over 15 years. It will add a little less than a third of a cent to the electric rate.

Because PSNH is a regulated utility, its rate of return on capital is strictly regulated as well. Investors putting up the capital know that there is a limited positive gain from their investment, but also very limited risk because return is guaranteed. Because PSNH is guaranteed a return on capital, it has come under attack. Opponents now call PSNH 'Big Coal,' as if the company officers weren't locals sitting in a refurbished mill in Manchester but evil, greedy executives secretly plotting to strip-mine half of West Virginia, turn mountains into valleys, and generally be mean to birds and puppies.

This is where debate has gone in America. Our opponents are never people with a different idea. Instead they are Big Something, and we're the little guy fighting the good fight against them. Stonyfield Farm CEO Gary Hirshberg is leading the opposition against the new mercury scrubber. He asks us if we're going to let Big Coal push us around.

Unfortunately for the cheap electricity side, Hirshberg is an organic yogurt maker. It's hard to attack Big Yogurt or Big Enzyme. Are you going to let Big Enzyme digest you? See, it doesn't work.

The financial argument for the project needn't degenerate into name calling. We spent decades paying off the mortgage, and now the plant is cheap to run. As long as the plant is cheaper than buying the electricity elsewhere, it makes sense to run it. When it isn't, it should be closed.

To run it, we need to install a mercury scrubber. If we install a scrubber, will electricity still be cheaper than buying it and bringing it into the state? The price increase under the scrubber will be .31 cents. According to testimony before the Public Utilities Commission, the comparable cost of buying electricity would be an additional .73 cents. That price difference sounds small, but it means scrapping the scrubber would cost more than twice as much -- more than $1 billion in total.

So while the cost of a scrubber sounds like a lot, it's actually $500 million less than the only alternative.

One scenario that would make the scrubber more expensive is if President Obama pushes through a tax on coal, and only coal, to try to shut down some of the coal plants around the country. That seems unlikely. The President's stimulus package actually includes money for a new coal plant. In a difficult economy, adding taxes to hike the price of electricity isn't exactly stimulus.

In addition, the scrubber project adds about 1,000 jobs to the current economy, especially in the hard-hit construction area. No one should support the scrubber as a jobs program, but think of it as a side benefit.

At the end of the day, we've finally paid off a plant. It has a long life yet, and we should save ourselves the $500 million.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.

Mercury reductions drive up electric rates

As I, and 300,000 of my closest friends wait for PSNH to restore power following the ice storm , Tom Fahey reports in the Union Leader that a ratepayers' group is going back to court to get out from under recent environmental regulations that are driving rates higher than anticipated:

A group of commercial ratepayers filed a state Supreme Court appeal yesterday aimed at requiring the Public Utilities Commission to review the cost of mercury reduction equipment at the state's largest coal-fired power plant.

The work at Public Service of New Hampshire's plant in Bow was supposed to cost $250 million when a law mandating it passed in 2007. Since then the price has nearly doubled, to $457 million. When finished, the work will cut mercury emissions by 80 percent.