Friday, March 30, 2012

REAL Calls for PUC's Harrington to Resign


 On March 7, 2012, the Executive Council confirmed Michael Harrington as Public Utilities Commissioner on a 4-1 vote. Councilor Ray Burton opposed the confirmation because too many questions regarding Harrington's pension went unanswered. Harrington was formerly employed by PSNH.

Late this afternoon, Friday, March 30, PUC General Counsel Anne Ross filed an affidavit disclosing information that newly appointed Commissioner Michael Harrington refused to provide during his confirmation hearings.

Based on this disclosure, Responsible Energy Action LLC (REAL) is calling for Commissioner Harrington to step down from the PUC.

REAL's call includes Attorney Ross's affidavit and supporting documents. 

Thursday, March 29, 2012

Northern Pass Makes No Financial Sense Today. Why Build It?

When Hydro-Quebec (HQ) started planning Northern Pass (NP)several years ago, gas prices were four times higher, and HQ’s hydropower had a big pricing advantage. Not so now, when today, literally, gas prices hit a 10-year low. Today, HQ’s power does not enjoy a price advantage.
                                                            
       
         Northern Pass Makes No Financial Sense Today. Why Build It?
                                                             
                                              A Guest Blog


Today's "Heard on the Street" column in the Wall Street Journal provides some interesting comparative data points on the cost of coal and gas-fired generation:

"A typical coal-fired power plant burns 10,000 British thermal units of fuel to produce one megawatt hour of electricity. With Appalachian coal costing $55 a ton, the fuel cost alone, not including transportation, is $22 per MWh. An efficient gas-fired power plant can get one MWh for 7,000 BTU of fuel. With gas at $2.24 per million BTUs, the implied fuel cost is under $16."

In short,

Gas -- $16/MWh (fuel costs only).
Coal (Appalachian sources) -- $22/MWh  (fuel costs only);

If you add 25% as a rough estimate for other operating costs, gas plants can produce at ballpark $20/MWh. This is on par with HQ's’s headline number of $22/MWh average operating cost of hydropower.

Or,

Gas -- $20/MWh (fuel cost plus operating costs);
HQ hydropower -- $22/MWh (average operating cost);

These figures comport with what the market is showing for wholesale electricity prices. As of the most recent hourly pricing report from ISO-New England (3/29/2012), NH wholesale electricity is at $27/MWh.

This is an interesting development. When HQ started planning NP several years ago, gas prices were four times higher, and HQ’s hydropower had a big pricing advantage. Not so now, when today, literally, gas prices hit a 10-year low. Today, HQ’s power does not enjoy a price advantage.

As today's "Heard on the Street" points out, the long-term trend may be toward higher gas prices if there is more demand because of coal plant shutdowns and substitution to gas, and also increased opportunity for gas exports. But if we believe the 10 cent/kWh Romaine cost per the film, "Seeking the Current,"* or even the 6.5 cent figure that HQ insists upon,** gas prices will have to go up a lot to make Romaine power competitive with gas generation.

The bottom line is that the incredible decline in US natural gas prices, and thus of US gas-fired electric generation, has taken HQ by surprise.  At current pricing, and taking into account that NP’s cost structure is grossly understated (it footnotes rather than quantifies the PSNH ROW rental payments, as just one example), Northern Pass is simply not economic.  You can’t make money selling $65 electricity into a $25 market!

If it is actually serious about pursuing NP, HQ is betting the farm on a relatively rapid increase in New England wholesale electricity prices.  We say “relatively rapid” because of the magic of compounding – the profits that HQ stands to make over the first 15 years of the 40-year NP transaction matter much more in terms of the discounted cash flow than the “out years” of 16-40.

How does one explain the fact, then, that HQ/NU/PSNH/NP appear to be moving ahead with NP, guns blazing?  It doesn’t seem to be a careful financial decision.  Rather, one could surmise that, per “Seeking the Current," HQ has been transmogrified into a “build baby build” culture, with financial considerations irrelevant or at least under weighted.  After all, as the film points out, HQ can always impose excess costs on Quebec ratepayers.

Another interesting observation from "Heard on the Street": cost of construction for a new gas-fired plant is $1MM per MWh. So, to replace NP's 1200 MW with new gas-fired generation would cost....$1.2 billion. The same as Northern Pass!

The bottom line is that we could build gas-fired capacity in New England of the same 1200 MW of electricity promised by Northern Pass (NP) for the same capital investment (likely less seeing since NP is almost certainly low on its cost numbers), and the electricity would cost the same.

Which is “worse” – destroying the Romaine River, completing the rest of the devastating Plan Nord, and ruining NH with the HVDC transmission lines, or building the gas plants and making upgrades to the existing grid as needed? For the carbon implications, the Conservation Law Foundation's and HQ’s own research on the carbon impacts of new hydropower show that there is no net gain over natural gas for at least 10 years.

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*The next NH screenings of the documentary film, "Seeking the Current," are in Keene (April 5) and Bethlehem (May 24). CLF will lead discussions after the film.

**See HQ's Myth #8.

Wednesday, March 14, 2012

Town Meeting Tally (2013)



2011-2013 Tally of Towns Voting against Northern Pass: 33

(New 2013 Towns in Orange)

 Ashland, Bath, Bethlehem, Bridgewater, Campton, Chichester, Clarksville, Colebrook, Columbia, (Concord*),  Dalton, Deerfield, Easton, Franconia, Effingham, Haverhill, Holderness, Jefferson, Lancaster, Landaff, Lincoln, Littleton, New Hampton, Northumberland, Orford, Pembroke, Pittsburg, Plymouth, Stewartstown, Stratford, Sugar Hill, Thornton, Wentworth, Woodstock 

*The Concord Planning Board unanimously voted to require Northern Pass to bury the lines in the city; the Conservation Commission unanimously voted to oppose the project altogether. This was not a full town meeting vote and is not included in the tally figure of 33.  


Towns Opposing Northern Pass in 2013

Deerfield opposed the project “as currently proposed," 796-443. A second article expressing a preference for the transmission lines to be buried passed 799-427.

For the third year in a row, Easton unanimously voted to appropriate funds to the Legal Expendable Trust Fund to represent the town's position regarding Northern Pass.

Lancaster voted against Northern Pass a second time.

(Concord, see note above.)

Towns Opposing Northern Pass in 2012

Eight towns have reaffirmed their 2011 opposition by passing new measures against Northern Pass; three new towns have expressed opposition.

Ashland
March 13
Oppose Northern Pass Project -- Passes.

Campton
March 13
LBO--Passes.
Clarksville
March 13
Town Line Burial Ordinance (LBO) passes:
"Other than high voltage electrical transmission lines in existence as of the effective date of this ordinance, there shall be no further overhead development of alternating current or direct current high voltage transmission lines within the borders of the Town of Clarksville. All such future electrical transmission lines must be placed underground within power line rights of way or within yet to be established power line corridors and installed in a manner approved by the State of New Hampshire's Public Utility Commission and/or Department of Transportation. Distribution lines carrying electrical power and other utility lines such as telephone and cable television for local residential or commercial use may continue to be installed above ground, but undergrounding of such lines is strongly recommended and encouraged. This ordinance shall take effect immediately upon its passage."
Colebrook
March 13
Line Burial Ordinance-- Passes.

Easton
March 13
Funds for Legal Expendable Trust fund -- passes.
Rights Based Ordinance regarding a sustainable energy furture and community self government
-- Passes (unanimous).
 
Franconia
March 13
Oppose Northern Pass project -- Passes.

Holderness
March 14
Line Burial Ordinance -- Passes.

Littleton
March 13
Oppose Northern Pass Project -- Passes

Plymouth
March 17
Rights Based Ordinance -- Passes (75-42)

Stewartstown
March 13
Line Burial Ordinance -- Passes

Sugar Hill
March 13
Rights Based Ordinance -- Passes (unanimous).

 
Towns Opposing Northern Pass in 2011
 
 
In Spring 2011, twenty nine towns voted to oppose Northern Pass: Bath, Bethlehem, Bridgewater, Campton, Chichester, Clarksville, Colebrook, Columbia, Dalton, Easton, Effingham, Haverhill, Holderness, Jefferson, Lancaster, Landaff, Lincoln, Littleton, New Hampton, Northumberland, Orford, Pembroke, Pittsburg, Stewartstown, Stratford, Sugar Hill, Thornton, Wentworth, Woodstock.

A thirtieth town, Plymouth, registered opposition when the selectmen intervened in the Presidential Permit application.
 
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