PEABODY — Plans to build a new power plant in Peabody are the latest flashpoint in a battle over expanding the state's natural gas infrastructure.

The Massachusetts Municipal Wholesale Electric Co. — which serves local utilities in 20 communities including Marblehead, Ipswich and Peabody — is planning a 60-megawatt gas-powered plant to provide electricity at peak times.

The company is seeking state permission to borrow $170 million to pay for the plant, which it calls Project 2015A, to be built at the Peabody Municipal Light Plant's Waters River substation, at the rear of the Pulaski Street industrial park.

Company executives say the gas plant will provide lower cost peak energy while helping lower regional emissions that scientists say contribute to climate change.

Glenn R. Trueira, a former PMLP manager, wrote that the regional company has an obligation "to provide electric service in a safe, cost effective and reliable manner."

"To fulfill this obligation, (company) members must have sufficient and diverse power supply resources, and sufficient and adequate assets, such as electric distribution facilities and equipment, to allow them to meet their customers’ electric needs," he wrote.

Paul Hibbard, an energy consultant, testified on behalf of the company that its project benefits ratepayers and communities, “without creating a harmful amount of emissions."

"This is because, as a peaking resource, it will operate in limited hours of the year, with minimal energy production and associated emissions," he wrote.

But the Massachusetts Climate Action Network, a coalition of environmental groups, said claims that a carbon emitting plant can help reduce greenhouse gas emissions are “disturbingly absurd."

"The company's presentation of the project as least cost, reliable and flexible and therefore beneficial to the company's customers is inconsistent with the commonwealth’s goals to reduce fossil emissions — and should be rejected in this case," Richard Kanoff, an attorney representing the group, wrote regulators.

Kanoff wrote that communities served by the company will be "substantially and specifically affected by the rates, risks and environmental implications" of the project.

The group has asked the state to intervene "on behalf of ratepayers." It has also created a website — www.massclimateaction.org/peabodylegal — to raise money for a legal fund to fight the project.

Controversy over the plant is part of a larger battle between environmentalists and energy companies over expanding natural gas infrastructure.

Environmentalists say the state shouldn't build new gas infrastructure, as it moves away from use of fossil fuels, saddling ratepayers with the cost. They've fought other efforts to build new power plants and natural gas lines to the region.

But industry officials says the state will continue to use natural gas for a large portion of its energy, even as it turns to more renewable sources. About half of New England's energy comes from natural gas, according to ISO New England, which oversees the regional power grid.

Hibbard told lawmakers that generating the needed capacity using only renewables will require an "impractical and excessive quantity of renewable capacity."

He said said municipal light plants are low emitters of greenhouse gases and already rely on a diverse mix of energy resources.

"This includes contributions from wind, solar, hydro, and nuclear resources owned or under long-term contract," he wrote.

At least two of MMWEC's member communities, Chicopee and Holyoke, have pulled out of the project. Managers of utilities in those communities wrote to regulators last week saying they won’t be participating and plan to sell or transfer shares in the project.

It's not clear why those communities are pulling out, and their managers didn't return phone calls seeking comment.

One thing that is clear, is that the cost of the project likely will be passed onto consumers.

Trueira testified that the plan obligates member communities to set rates “at levels sufficient to enable” payments to the regional company.

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhi.com.

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