By Pam Boschee
You’re most likely familiar with NIMBY (not in my backyard) as a term used to refer to opposition to building new power plants or transmission lines. However, a newly formed group’s actions in Salem, Mass. could be called LIMBY–leave it in my backyard.
Salem Harbor Alliance for Reliable Energy (SHARE) is rallying ’round PG&E National Energy Group’s (PG&E) Salem Harbor Station. And they’re not alone–other champions of the plant include the ISO New England and the mayor of Salem.
Salem Harbor Station (circa 1951), a 745 MW coal- and oil-fired plant, is facing significant environmental pressures (translation: significant financial pressures) and significant controversy.
In 2001, Massachusetts state legislation required that the plant cut nitrogen oxides, sulfur dioxide, carbon dioxide and mercury.
After the regulations were promulgated, PG&E submitted a plan to clean up the Salem Harbor plant by October 2004, which was approved by the Massachusetts Department of Environmental Protection (DEP). PG&E subsequently filed a new proposal requesting a two-year compliance extension. DEP rejected the request for extension in February 2003. PG&E promptly said it would appeal the rejection before considering court action.
Things really started to heat up in Salem. Salem Harbor’s situation illustrates how perceptions and opinions of whether a company is a “good” or “bad” corporate citizen can vary depending on what hat you wear.
I’ll refer to white hats (supporting the plant), black hats (opposing the plant) and hardhats (you guessed it–working at the plant).
Starting with the hardhats and one of the white hats, the mayor, it’s no surprise that they support the plant. In this city of about 35,000, which historically had (note the past tense) a strong industrial base, the power plant puts food on the table for about 175 people.
Jamie O’Hara, founder of SHARE, said, “Its workers contribute $30 million into the local economy.” He added that the plant’s property tax represents about 12.8 percent of the city of Salem’s tax base of $6.7 million. “If you eliminate 12.8 percent of that, the city of Salem would be in major financial difficulty.”
When Gov. Mitt Romney announced DEP’s refusal of the extension, Salem Mayor Stanley J. Usovicz Jr. said, “There’s a great deal at stake here. First jobs, second tax base. We’re quibbling over a particular date, not standards.”
Verdict: When viewed within the context of its economic contribution to the Salem area, Salem Harbor is a “good” corporate citizen.
Heated exchanges continued as black hats (opposing the plant) such as the governor, Conservation Law Foundation, a regional environmental advocacy organization, and HealthLink, a grassroots group, alleged detrimental health effects from the plant’s emissions. They cited a controversial Harvard School of Public Health study that attributed 30 premature deaths to the plant.
The Boston Herald quoted Gov. Romney at a February press conference: “I will not create jobs or hold jobs that kill people. And that plant kills people.”
A scientist who studied the report for PG&E said it was based on a model that has never been validated. Peter Valberg, Ph.D., Gradient Corp., an environmental consulting firm, said, “It’s predicting a hypothetical result that’s predicated on a lot of assumptions and uncertainties. It shouldn’t be confused with real health data and that somewhere there are people who are dead that have been identified.”
However, a study co-author, Jonathan Levy, countered that similar observational studies are used to quantify cigarette smoking-related deaths. “Our analysis is a statistical model, but it’s based on real studies of real people and based on methods that are used across the boards by all different researchers.”
A spokeswoman for the governor said in mid-March that the governor believes PG&E can meet the 2004 deadline if officials simply “work hard” to upgrade the equipment. Shawn Feddeman said, “This is one of the state’s oldest and dirtiest power plants. He’s going to hold their feet to the fire.”
Verdict: When viewed within the context of immediately mitigating emissions, and with the hypothetical possibility of contributing to poor health or death, Salem Harbor is a “bad” corporate citizen.
Turning now to another of the white hats in support of the plant, consider the view of ISO New England.
Stephen G. Whitley, senior vice president and chief operating officer outlined the importance of the controversial 745 MW. He wrote in the Boston Herald on March 23, “Our demand forecast for the North Shore this summer is approximately 1,115 megawatts, but only 840 megawatts can be generated locally. (The rest must be imported.) The bulk of this local capacity, more than 700 megawatts, is produced by the Salem Harbor Station power plant.”
The Greater Boston area, which consumes about 20 to 25 percent of New England’s total electricity, also depends on this power.
Bear in mind the well-documented transmission constraints in this region. O’Hara commented, “There is a plan in the works to upgrade the present transmission system in the Boston metropolitan area, but it’s only a plan at this point. There’s going to be opposition to any kinds of transmission changes. People love to see changes made to transmission lines–that’s eliminating them.”
Whitley also discussed the importance of fuel diversity. He illustrated the price volatility of wholesale natural gas by comparing the average of $3 per MMBtu in 2002 to the March 2003 high of $10.
Currently 30 percent of the electric power produced in Greater Boston comes from plants fueled by natural gas. By the end of the year, if the new plants become operational as planned, this figure will rise to 50 percent. Whitley added, “As the person responsible for system reliability, I am concerned about the implications of this growing dependence on gas.”
Verdict: When viewed in the context of its role in keeping the lights on in an area where demand outpaces supply, and where transmission constraints worsen the situation, Salem Harbor is a “good” corporate citizen.
So…where do things stand today?
On April 22, PG&E and DEP entered into negotiations to speed up the installation of new emission control equipment at the Salem Harbor Station. The governor’s office stated in a press release that PG&E “will immediately begin discussions with federal and state entities to institute a mechanism to fund the improvements needed for the emission reductions at the plant.” Terms of the newly negotiated agreement will apply to the current owner or any future owner.
Salem Harbor, another coal-fired plant, and seven Bay State hydroelectric plants have been on the block since January as PG&E attempts to improve its financial standing. In November 2002, the company missed a $431 million debt payment. It took a fourth quarter $1.1 billion pre-tax loss for its division that includes the Salem plant.
Final verdict: Whitley has reason to be concerned. Because “as the person responsible for system reliability,” his feet may be the next to be held to the fire by shivering Bostonians next winter.
Pam Boschee, Managing Editor