SALEM — A proposed natural gas power plant on Salem Harbor cleared a huge hurdle yesterday.
ISO New England, which manages the electrical grid for the region, allowed the new plant owners to take part in an energy auction this week, a signal that additional generation from the Salem plant will be needed in 2016 and beyond to ensure energy reliability in northeast Massachusetts.
“We have cleared the market,” Peter Furniss, chief executive officer of Footprint Power, the new owners of Salem Harbor Station, said late yesterday.
This is the first time ISO New England has acknowledged a need for new generation in several years.
If Footprint had not been allowed into the auction, it would have meant the Salem plant was not needed — at least in the near future.
Although Footprint still hopes to secure a long-term agreement to provide power, the decision yesterday by ISO is seen as a major step toward financing and building a new plant.
“Another hurdle has been cleared,” said Mayor Kim Driscoll, “and it makes the proposal all the more real.”
In addition to being an important potential development, the power plant has been the city’s No. 1 taxpayer for decades.
The current coal- and oil-fired power plant is slated to close next year. Footprint hopes to open a new gas-fired plant in 2016.
The New Jersey-based company, which bought the Salem Harbor Station power plant last summer, has pledged to clean up the site, demolish most of the buildings and develop the 65-acre waterfront property.
The new power plant is seen as a key anchor project that will generate revenue and spur other development. Without the plant, it could take 50 years or more to develop the property, a state-funded study concluded.
“We’re pleased that ISO New England has recognized the need for our facility, and we look forward to working through the rest of the processes toward bringing our plant on line,” Furniss said.
The Footprint CEO got the good news from ISO late yesterday, hours after he had been the guest speaker at the monthly breakfast meeting of the North Shore Chamber of Commerce.
In yesterday’s speech, Furniss said a natural gas plant would have significant environmental and economic benefits, allowing the state to avoid “massive” amounts of pollution from dirtier fossil fuel plants and saving ratepayers millions of dollars from the lower-cost fuel.
He also told the audience at the DoubleTree hotel in Danvers that a recently completed environmental investigation of the property showed relatively little pollution. A contractor did borings, dug test pits and set up monitoring wells to determine how extensive a clean-up is needed. The results were sent to the state Department of Environmental Protection.
Furniss said there are “no reportable groundwater issues,” and limited contamination.
“The site is in good shape and we are going to make it even better,” he said.
Furniss showed the audience a rendering of the proposed plant, revealing a single smokestack less than half the height of the tallest of the plant’s three current stacks, which is nearly 500 feet in height.
In response to a question about how well the proposed new plant could withstand a weather event like the recent Hurricane Sandy, Furniss said that following that destructive storm they decided to raise the level of the plant’s foundation by several feet to ensure it could withstand any future storm.
As for future development of the site, Furniss said that in addition to a power plant they are considering industrial facilities, loading docks, cruise ship terminals and other waterfront-related businesses.
The Footprint official noted that they are talking to Driscoll about the city using the power plant’s deepwater port to bring cruise ships here “as early as this summer.”
The current power plant, which is running at less than full capacity, is scheduled to shut down next year.
Tom Dalton can be reached at email@example.com.