PSNH fires back on coal-fired plants
In his 20-page response, Bersak writes that the PUC report glosses over 10 years of legislative mandates that resulted in PSNH retaining coal-fired plants in Bow and Newington; "trivializes" the region's overreliance on natural gas and the safety net the plants provide; and was surprisingly adversarial in tone.
Bersak suggests that regulators have bought into that argument without the in-depth economic analysis that should have been conducted before reaching conclusions that reverse a decade of legislative and regulatory history.
The report assumes natural gas will remain available at low cost for the foreseeable future, that customers will continue to abandon PSNH at current rates, that the fixed costs of the power plants will stay high forever, and that gas pipeline capacity into New England will be expanded by 2016. Bersak challenges each of those assumptions, dedicating significant space to an analysis of the natural gas market.
"Merely shuttering the plants will not eliminate the on-going costs, such as taxes, security, insurance, etc., and the remaining book value of the plants would have to be recovered from customers," he writes. "Instead of mitigating costs, retirement would merely exacerbate costs and is not worthy of further consideration."
A process proposed
The New England Power Generators Association, a trade association representing competitive electric generating companies in New England, issued its own comments on the PUC report on July 1, suggesting a process that would lead to divestiture by December 2014.
"We believe this is a much needed and thoughtful approach, and one that we look forward to participating in. With this energy strategy under development, it does not make sense to initiate a separate approach regarding PSNH's generation assets," he said. "These issues are intertwined and should be considered as part of an overall strategy on how best to provide customer's with reliable energy options and protect them from volatility with a safety net that is backed by PSNH's regulated generation."
"We'll have to wait and see how the new carbon emission plan takes shape to fully understand how it will impact PSNH's coal-fired generation," Skelton said. "The plants meet all current rules and standards, and they'll have to meet any tighter emissions standards in the future."
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