Concord, NH March 13, 2009****It is vital to move ahead with the installation of a mercury and sulfur dioxide “scrubber” at Public Service of New Hampshire’s largest power plant, in order to provide an economic and reliable source of power while new sources of renewable energy are being developed. That was one of the key points made today by Gary Long, president and chief operating officer of Public Service of New Hampshire. Mr. Long spoke at a NH Senate hearing on SB152, a proposal to study the cost of the scrubber project and what alternatives exist if Merrimack Station were to be closed.
“In the short-term, it is unrealistic to think that we can depend on new renewable energy sources to replace the power produced by existing fossil fuel plants,” Long testified. “A vote in favor of Senate Bill 152 is a vote to shut down Merrimack Station. A shutdown would be a step backward in New Hampshire’s progress toward a cleaner energy future.”
The scrubber installation, or “Clean Air Project,” is required by a state law enacted in 2006. Long noted that the project is halfway complete, is on schedule to be operational in mid-2012, and that about $230 million has been spent or contractually committed in order to meet the law’s requirement.
“The law requires us to reduce mercury emissions as soon as possible by installing the scrubber,” said Long. “The only alternative to installing the scrubber is to not install the scrubber, and that would lead to a shutdown of Merrimack Station and have far-reaching impacts on our economy, on the cost of electricity, and our ability to transition to a future with more renewable energy.”
Project Costs – In Line with Others
The Senators were provided with an explanation of why the project cost, originally estimated at $250 million, is now $457 million and what impact that cost will have on PSNH customers. A senior official of PowerAdvocate, Inc, a Boston-based solutions provider for energy companies, affirmed that the cost of the Merrimack Station project increased due to dramatic global increases in the price of commodities, and that the project cost is in line with similar scrubber projects now underway in the U.S.
"The costs associated with the Merrimack Station CAP remain reasonably in line with expected construction costs for a project of this scope and scale and on a site with similar conditions to the Merrimack site," said Gary Fortier, COO, PowerAdvocate, Inc. "The owner has taken prudent measures in selecting its preferred suppliers and contractors and to mitigate risks that, absent such mitigation, could have further increased project costs."
PSNH recovery of costs will not be sought until the project is operational. State regulators must audit the project, and PSNH will not be allowed to recover any imprudent costs. The recovery, over time, of $457 million would increase PSNH’s Energy Charge by an average of three-tenths of a cent ($0.0031), or $1.65 a month for a typical PSNH residential customer using 500 kilowatt hours of power a month.
What is at Risk
The loss of jobs associated with the project and the continued operation of Merrimack Station is a key concern to those studying SB152. More than 300 unionized craft workers will work directly at the plant during the 3 – 4 year construction project. About 100 PSNH employees today work at the plant, which operates 24/7 as a “baseload” generation facility that achieved record output in 2007.
An economic study by Lisa Shapiro, Ph.D., chief economist at the Gallagher, Callahan and Gartell law firm in Concord, recently found that as many as 1,000 New Hampshire jobs would be at risk if the scrubber project is delayed or stopped. The study, prepared for PSNH, found that the project will directly involve 300 – 500 jobs and another 500 – 700 jobs indirectly.
The Road to Renewable Energy
“I want to make clear that PSNH is committed to bringing about a cleaner energy future for New Hampshire,” said Long. “PSNH has the highest percentage of renewable energy of any major utility in New England – and we’re ready and willing to do more. But, renewable energy today accounts for just 11 percent of the power generated in the state and it is unrealistic to think that we can depend on new renewable energy sources to replace existing fossil fuel power plants in the near-term. The Clean Air Project at Merrimack Station is a key to transitioning to a cleaner energy future.”
More information regarding the PSNH Clean Air Project is posted at psnhnews.com