SALEM — A top official at Dominion Energy said the company expects to shut down Salem Harbor Station within five years.
In addition, Dominion CFO Mark McGettrick told investors that the Virginia energy giant, which owns the Salem power plant, "will not invest any capital" for pollution controls at the 59-year-old, coal- and oil-fired facility.
McGettrick's comments, which were made earlier this month and made public yesterday by the Conservation Law Foundation, an environmental group fighting to close the plant, were confirmed by the company. They are the latest installment in a seemingly endless obituary for an aging facility that some say is on life support and others contend will continue to operate as long as it can make money.
The death watch accelerated last month when Dominion filed to permanently delist its four generating units. That move, if approved, would withdraw Salem Harbor Station from a June 2011 energy auction held to ensure New England can meet its future electricity needs.
Last week, Ian Bowles, the state secretary of energy and environmental affairs, called that request "the beginning of the end."
The CFO's remarks, plant opponents say, signals the end may be nearer than anyone thought.
Speaking Nov. 1 at a financial conference at Edison Electric Institute in Palm Desert, Calif., McGettrick said Dominion had "announced that two coal plants will shut down in the future when environmental rules are clear. The first is Salem Harbor in the Northeast, where we've already tried to delist a few of those units, but the ISO has required the two biggest ones for reliability.
"In the near future," McGettrick continued, "certainly in this five-year horizon, we would expect Salem Harbor plant to shut down. We will not invest any capital for environmental improvements at Salem Harbor."
A Dominion spokesman in Virginia said yesterday that the company is not saying the Salem plant will definitely close, and is stating nothing it hasn't said before.
However, just two years ago, Dominion took out an advertisement in this paper saying it was confident the plant would run "for years to come."
Yesterday, company spokesman Dan Genest said: "The key word in Mark's statement is 'we expect.' We would expect, we really don't know, what is going to happen with environmental regulations. We don't know if the ISO (i.e. the agency that oversees the New England energy market) is going to say it is needed for reliability."
Independent System Operator New England (ISO) rejected the plant's request to delist the past two years and ordered two generating units to continue to operate to ensure energy reliability for the region.
The 750-megawatt plant has the capacity to provide power for 750,000 homes and has been a key player for decades in the New England energy market.
The plant's future, Genest said, is closely linked to federal energy regulations on ozone that are scheduled to go into effect between 2015 and 2017.
"I think if the environmental regulations that we anticipate ... go into effect, then we would look at sometime in the near future shutting down Salem Harbor Station. But that doesn't change what we have said in the past. Our game plan is to continue to run the station as long as we can do so safely, economically and meeting all environmental rules and regulations."
On the issue of safety, the plant was the scene of a fatal accident in 2007, in which three workers were killed and for which Dominion was later cited.
Asked a final time if the Salem plant, as the CFO appeared to say, is slated to close within five years, Genest said: "No one has given me that word." Between now and 2015, "a ton of things can go on," he said.
On the matter of capital investment, Genest said the company does plan to install pollution control equipment to meet state mercury regulations for 2012. That investment, he said, was planned a while ago.
The Conservation Law Foundation had harsh words for Dominion, which it contends is "gaming the system" by filing to delist in the hope of being ordered to keep operating for reliability reasons and, as a result, receiving higher payments.
The CLF said it could cost ratepayers in this region of the state $30 million in "above-market costs."
"The fact is their plan is to run this plant into the ground and to have the ratepayers cover the costs until shutdown," said CLF staff attorney Shanna Cleveland. "This leaves Salem in a bad position, workers in a bad position and certainly leaves us with a plant that continues to pollute the environment and damage the public health."
The CLF said it plans to push ISO to find ways to replace the power from Salem as soon as possible.
"What we really want to see," Cleveland said, "is the shutdown of this plant by 2012."
Workers at the plant, which has 145 employees, have not been told of any plans to close, according to Rick Robey, president of IBEW Local 326.
But this is not the first time they have seen quotes from Dominion officials about decisions not to invest in Salem. Robey said these remarks on a plant closing, at the least, require clarification.
"They have corporate VPs coming up in the next two weeks," he said. "I guarantee I will put that question to them."
The company's decision not to make a major investment in Salem has been an issue for some time. In contrast, Dominion has spent more than $1 billion at Brayton Point, a much larger coal plant it operates in Somerset.
An activist at HealthLink, a North Shore group battling the plant, said the company should be sharing its future plans.
"I think they need to be really honest with the community about this because there's some big transition issues. ... And they're not being honest and candid," Jane Bright said.
"They should say ... we're going to work with employees, we're going to work with the city and make this transition as smooth as possible," Bright said, "instead of ripping off the ratepayers and ripping off the city of Salem."
In addition to being a large employer, Dominion is the city's largest taxpayer. It paid $4.5 million this year in taxes and what it characterized as a voluntary community payment.
The Dominion CFO's statement caught Mayor Kim Driscoll off guard. She expects to start discussions early next year with Dominion on a tax agreement that expires in June.
"I'm surprised to see the CFO of the company making a comment that is so direct," she said. "That's one of the reasons we have a study under way. We want to be in a better position to plan for the (site's) future."
Salem received a $200,000 state grant this year to do a study on the future use of the power plant site.
The city has hired Jacobs Engineering, a large, international firm, to do the study, which is scheduled to be completed in the spring.
State Rep. John Keenan said one possibility is acquisition of the site by another power company using a cleaner fuel, like natural gas.
"I think it sort of shouts out for someone else to come in, take a look and kick the tires," he said.
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