Future Operation Of Power Plant Questioned

BOURNE- Should the Mirant Canal Plant be kept running with the help of ratepayers’ dollars just in case its power is needed in an emergency? That is a question State Representative Matthew C. Patrick (D-Falmouth) is asking and he has turned to the state Committee on Telecommunications, Utilities, and Energy to help him find the answer.
Mr. Patrick sent a letter to the committee last week asking it to conduct hearings looking into the merits of keeping the power plant operating on an emergency status.  
The request was signed by 10 representatives from the Cape and Islands and southeastern Massachusetts districts, including State Representative Jeffrey D. Perry (R-Sandwich).
In the letter, Mr. Patrick asked for an investigation into the cost to ratepayers for keeping the Mirant Canal Plant operational. He stated that the plant has been designated by ISO-New England as a “must run” facility, whose sole purpose is to ensure reliability in the flow of electricity to the Cape and southeastern Massachusetts. ISO-NE is responsible for ensuring the availability of electricity to the people of New England by overseeing and ensuring fair market practices with respect to wholesale electricity and managing a comprehensive regional planning process.  
According to Mr. Patrick, ISO’s designation of the canal plant puts it into the category of a source of last resort, meaning that if the two power transmission lines serving the Cape should ever become inoperative, the plant would provide the necessary power. But, he said, there is an expense associated with having such an “insurance” policy in place.
He pointed out that consumers are paying 1.5 cents per kilowatt hour in “uplift” charges to keep the plant open. He said this charge translates into about $4.50 a month on the average utility bill. In total, he said, it is costing $200 million annually to keep the plant operational, in case the worst should ever happen.
“Losing both [power transmission] lines at the same time has only ever happened once. The money we are talking about is enormous. If we spent it ourselves, we could make ourselves a lot less dependent on fossil fuels. It’s a waste of financial resources, and that’s criminal,” Mr. Patrick said in a telephone interview this week.
He went on to say that he’s asking for the hearings in the hope of determining the most economical way to provide a constant power source to residents, businesses, and municipalities in southeastern Massachusetts and he is not convinced that the current process of addressing reliability issues is the right answer. Among the alternatives he wants explored during the hearings is sharing the uplift charges beyond just the southeastern part of the state. Another alternative he would like to discuss is the potential to use gas-powered generators for hospitals and municipal buildings so that power is uninterrupted in case transmission lines fail.    
Mr. Patrick, who lives in Falmouth, stated that the power plant is not really necessary except for its “must run” designation. And since it uses oil, and not natural gas, to operate, it is emitting unnecessary pollutants into the environment.  
But removing the designation of a “must run” plant could force the facility to be shut down altogether, and Town Manager George H. Dunham said the cost to Sandwich taxpayers would be much higher, in terms of lost tax revenue. The power plant is the single largest taxpayer in town, shouldering a full seven percent of the town’s tax base.
“I’d like to ask Representative Patrick if I could choose seven percent of Falmouth’s tax base to shut down,” Mr. Dunham stated.
But Mr. Patrick pointed out that Mirant Corporation would still have to pay property taxes.  “They are still property owners and would still have to pay property taxes. I would welcome [Sandwich’s] town assessor to attend the hearings and offer input,” he said.
Mr. Dunham pointed out that as a commercial business, Mirant Corporation pays personal and real property taxes. He explained that if the plant were to shut down and the equipment removed, it would be an enormous loss in terms of revenue for the town.
“If anything, we should be trying to get Mirant to convert to something cleaner like gas and expand their power capabilities,” Mr. Dunham said.
As the representative from Sandwich, Mr. Perry said he agrees with the basic premise that some oversight should be given to the merit of whether the power plant needs to be operating under the designation of “must run,” but said he disagrees with Mr. Patrick on some other issues.
“One of the things we have been trying to do is to get ISO engaged in conversations about whether it is the best economic decision to pay this plant to operate for reliability purposes.  What I am trying to accomplish is a better way for ISO to regulate power going into the grid.  I am concerned that the uplift charges are being passed along to consumers and that may be one of the reasons we have the highest electric bills in the country,” Mr. Perry said.
He further pointed out that while he believes these hearings are appropriate, he is not requesting the hearings with the purpose of shutting down the plant. “We are just trying to get all of the players in the same room to see if there is a better way that power can be managed.  It seems to me that ISO should be forthcoming, and this is a way to force them to the table and to get Mirant representatives there and to ask, ‘What’s your plan,’” he said.
Part of the responsibility of the Legislature, he said, is to ask for oversight hearings to justify what is being done.
He said he has been in conversations with representatives from the plant who said they would be interested in using natural gas. The plant is connected to a natural gas pipeline. Mr. Perry said that if the switch were made, it might be possible for Mirant to operate at an increased capacity.    
He explained that the hearings are also about asking if ISO is regulating power in the most efficient and environmentally responsible way it can.  
“In no way, shape, or form am I suggesting that the plant be closed,” said Mr. Perry.
Mr. Patrick agreed that if the plant were to switch over to natural gas, it would be a different situation. He said if that happened and the uplift charges were eliminated, it might be deemed economically and environmentally justified to keep the plant operational. He said if the switch to natural gas were made, then providing power even only in an emergency situation, would require just a flip of a switch.