SALEM — The state energy secretary is calling on the New England electric grid operator to allow Salem Harbor Station to close.
Ian Bowles, state secretary of energy and environmental affairs, wrote a letter to Independent System Operator New England urging the agency to allow the plant to be delisted.
The alternative, Bowles said, would force Dominion Energy, the company that owns the power plant, to "spend hundreds of millions of dollars on environmental upgrades to extend the life of an outmoded plant," which would hike utility costs for ratepayers, too.
"In my view, Massachusetts consumer dollars should be invested in clean energy solutions," Bowles wrote, "... rather than in keeping open an older generation coal plant that cannot compete economically and struggles to meet standards necessary to protect our environmental and public health."
Bowles' letter to ISO New England, dated Dec. 8., was made public by the Conservation Law Foundation, an environmental group fighting to close the plant.
The 59-year-old, coal- and oil-fired plant has the capacity to provide power for 750,000 homes. It has been a key player for decades in the New England energy market.
Dominion announced last month that it expects to close Salem Harbor Station within five years.
However, ISO New England, the agency that oversees the New England energy market, has rejected the plant's past requests to delist two of its four generators. ISO has said the plant is needed to ensure energy reliability for the region.
Bowles wrote that ISO New England needs to move "from planning to implementation" on finding alternative solutions for reliability without Salem Harbor Station.
"I urge you to evaluate all cost-effective options to move ahead as quickly as possible," Bowles wrote.
Salem Mayor Kim Driscoll said Bowles' letter underscores the pressure to close older power plants, but that doesn't change the fact that the transmission upgrades haven't been made.
"I took his letter as encouraging them to do those transmission upgrades," Driscoll said. "I think reliability is a question."
In October, Dominion filed to permanently delist its four generating units. That move, if approved, would withdraw Salem Harbor Station from a June 2011 energy auction for the 2014-2015 power year, Bowles wrote.
"The Commonwealth is concerned that despite Dominion's expressed desire to retire the plant," Bowles wrote, "reliability concerns will require its continued operation, resulting in significant environmental and economic costs to Massachusetts ratepayers."
Last month, Dominion CFO Mark McGettrick told investors that the Virginia energy giant "will not invest any capital" for pollution controls at the Salem facility.
A Dominion spokesman recently told The Salem News that the plant's future is closely linked to federal energy regulations on ozone that are scheduled to go into effect between 2015 and 2017.
"There are a number of impending federal environmental regulations that will require older coal plants like Salem Harbor to become much cleaner," Bowles wrote.
Bowles called on ISO New England to place a "renewed and sustained effort" on finding a solution that will allow for the "near-term retirement of Salem Harbor." Bowles concluded his two-page letter by offering his help in the matter.
"Clearly the lifespan of this plant continues to be something of concern," Driscoll said, "and now the company and state officials are remarking on it, so it doesn't seem to be here for the long term, I think that's fair to say."
Salem Harbor Station employs 145 people and is the city's largest taxpayer — Dominion paid $4.5 million into city coffers this year.
"It certainly remains disconcerting from a financial perspective how we're going to overcome this hurdle," Driscoll said.
Salem received a $200,000 state grant this year to study future use of the power plant site.
"We certainly are grateful that we have the grant from the state to study the energy market, existing conditions and reuse options," Driscoll said.
The study is under way, she said, and will likely be completed by late spring or early summer.
"For us, having a smooth and orderly transition to whatever is next is really critical," Driscoll said. "The worst is if someone comes down and padlocks the plant."
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