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Utilities oppose plan for forced buying of power

Environmentalists, power generators, and other industry groups are raising concerns about a provision in an energy bill before the Legislature that would require local utilities to buy electricity on a long-term basis from new power plants built on the site of coal- or oil-fired plants getting shut down.

The provision is aimed at replacing aging facilities such as Salem Harbor Power Station, a 60-year-old coal- and oil-fired plant scheduled to be retired in 2014 in part because of stricter pollution rules.

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A New Jersey company, Footprint Power LLC, has agreed to purchase the Salem­ plant, which it plans to replace with a state-of the-art, natural gas-fired plant. It will clean the rest of the 63-acre waterfront site to open it for development.

Long-term deals for electricity would probably help make sites like Salem Harbor more attractive to companies looking to redevelop such properties, such as Footprint.

But opponents of the provision, inserted by Representative John D. Keenan, a Salem Democrat who chairs the Joint Committee on Telecommunications, Utilities and Energy, argue it would give Footprint and similar operationsan unfair advantage over other power generators, particularly wind and solar power companies, which are struggling to remain competitive.

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In addition, they say, the region has more than enough power and doesn’t need another costly plant, which could raise electricity rates.

On Tuesday, the New England Power Generators Association, a regional trade group representing independent power producers, ran full-page advertisements in a few newspapers, denouncing Keenan’s provision.

“It’s the wrong way to clean up or remediate the site of a retiring coal power plant,” said Dan Dolan, president of the association.

Footprint last month said it would buy Salem Harbor from its current owner, Dominion Energy Inc. of Virginia, for an undisclosed amount. In a statement on Tuesday, Footprint said the deal was independent of Keenan’s provision.

“The finalizing of our agreement with Dominion was coincidental to the timing of the energy bill,” said Scott Silverstein, Footprint’s president. “Still, we applaud the Legislature for a sound energy bill that includes smart environmental and remediation provisions, and rate-payer protections.”

As tightening clean-air regulations and Salem Harbor’s age have made running the power station less economical over the years, its fate has been a big worry in Salem. The plant is the city’s largest taxpayer, employing more than 100 people.

And while New England may currently have surplus generating capacity, Salem Harbor or a comparable facility will probably be needed to ensure the reliability of the power system on the North Shore and in Greater Boston, according to the regional grid operator.

Those issues prompted Keenan to draft the provision that would require utilities like NStar and National Grid to enter into contracts of 15 years or more to buy electricity from new generating facilities built on old power plant sites. The provision is part of a larger bill that would strengthen and extend some of the state’s landmark efforts to promote clean energy.

The bill is before a conference committee.

“I’m not disguising the fact that I’m trying to help my community,” Keenan said.

He defended the provision Tuesday, noting that any long-term contracts also need approval from state regulators, who must base their decision on a “net benefit” standard that requires utility deals to benefit consumers as well as further environmental goals.

Keenan said he is open to compromise if someone has another way to redevelop the Salem Harbor site, maintain Salem’s tax base, and save ratepayers money.

Erin Ailworth can be reached at eailworth@globe.com. Follow her on Twitter @ailworth.
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