Column: A bad project for Peabody

MMWEC renderingThe proposed natural gas-fired “peaker” plant, referred to as Project 2015A in public documents, has been in the works since 2015. Approval has been given to build it at Peabody Municipal Light Plant’s Waters River Substation, behind the Pulaski Street Industrial Park.

The motto of the Peabody Municipal Light Plant (PMLP) is “Community owned. Not for profit. It’s ours.” We’re the people who pay electric bills, so we’re the investors. Let’s not allow PMLP to participate in an unwise fossil fuel generator project that has already put us at risk financially and morally.

PMLP has joined with Massachusetts Municipal Wholesale Energy Company (MMWEC) and 13 other municipal light plants in a project that any prudent investor would avoid. Project 2015A is a plan to install a new 55 megawatt fossil fuel generator at the Waters River station alongside two existing fossil fuel generators. The function of the plant is to provide capacity -- the ability to deliver power to the grid managed by ISO New England to help cover times of extreme demand, such as during very hot or cold weather.

The project has yet to receive final approval for finance from the Department of Public Utilities, but MMWEC has already spent or obligated $30 million, and Peabody is responsible for $10 million of that total, an average of $400 per ratepayer; Marblehead ratepayers owe about $90 each.

Proponents of the project claim several justifications that do not withstand scrutiny. The primary goal is to save money on the obligation to provide a reserve of generating capacity. But a profit/loss statement is not available. MMWEC officials claimed in a public presentation in Peabody on June 22 that they expected to nearly break even for the next few years. Another claim is that ISO-NE will credit MMWEC just to have the plant available for use when needed, thus reducing the cost of the MMWEC capacity obligation. They also call it a “hedge” against volatile capacity prices, but MMWEC projects fairly stable prices for the next decade.

Moral risk

Burning fossil fuels releases toxic chemicals into the air—increasing the prevalence of disease and death in nearby communities, polluting the environment, including adjacent wetlands, and contributing to the climate crisis. In a letter to Gov. Charlie Baker, the Peabody Department of Health stated the urgent need for a public health and environmental review of the project.

At a presentation of Project 2015A by MMWEC before the Danvers Select Board, MMWEC refused to fund an independent review of the project or to agree to a review of the public health and environmental issues.

Many of the concepts held by MMWEC and PMLP officials and even the ISO-NE regulations about the use of fossil fuel predate our understanding of the threat fossil fuel poses to our health, our environment, and our climate. The proposed plant flies in the face of the new “Next Generation Roadmap,” which seeks to deter and prevent the continued use of fossil fuels.

Alternatives

There are a number of alternatives.

According to MMWEC officials, the need for system capacity is already covered. Municipal light plants can expect to buy capacity at reasonable cost for the next several years.

Light plants can manage the electrical needs and usage of their communities through a variety of measures that can help reduce their capacity obligation. MMWEC and/or individual municipalities can likely obtain federal and state grants to undertake demonstration programs that mobilize the community to work with their light plants for programs of efficiency, conservation, solar generation, and shifting use away from peak demand times. The Biden administration seeks to achieve 80% renewable energy use by 2030 and all renewable electricity by 2035.

The Northeast market area  for electricity has limited ability to import energy because the electrical transmission grid is old and needs to be upgraded. When that upgrade takes place, the area capacity requirements will be lessened, and the cost of power will be reduced and stabilized. Power will come from areas with a surplus of wind, solar, or hydro energy.

Currently, ISO-NE regulations favor fossil fuel sources over renewable sources of power — solar, hydro and wind. ISO-NE penalizes the use of batteries for meeting peak capacity, although utility scale battery storage is already less expensive and more reliable than gas generators. Federal and state authorities, including the Federal Energy Regulatory Commission (FERC) are likely to press ISO-NE for changes.

ISO-NE regulations currently create perverse incentives, especially when we consider that the worst threat to reliability will be in severe winter weather—when offshore wind will be most productive. Until we convert to electric heating and have offshore wind, winter peak demand will be met by using oil for generating power because gas will be prioritized for heating. Offshore wind is now being developed and with a modern grid system, we can expect over the next 5-10 years that the availability of renewable power will increase and the cost will decrease, and the risk of electrical system failure will be significantly reduced. Green hydrogen (produced by renewable energy) as a fuel to displace fossil fuel is likely to become feasible in a decade.

The 2015A project will become redundant because ISO-NE calls on capacity resources with a preference for low cost; wind will be cheaper; and the plant will become a useless stranded asset. The 2015A project loan for $85 million would still have to paid by ratepayers, and each Peabody ratepayer would owe $1,100.

Justice and morality

We have to ask, even if it is legal and profitable to commit to another 30 years of fossil fuel, is it right? Do we have the right to harm our neighbors or our grandchildren through our desire to save on our electric bills? We must stop the plant: it is not needed, it is risky, and it is harmful, especially to the nearby environmental justice communities. It is unjust to subject them to yet another burden. If we love our grandchildren, we cannot allow the project to proceed.

Jerry Halberstadt of Peabody is coordinator of the Clean Power Coalition. He participates in Massachusetts Climate Action Network, Breathe Clean North Shore, StopPeabodyPower, Community Action Works, Sierra Club, and Elders Climate Action. This article reflects his own views and may not reflect the views of other individuals and organizations.

 

 

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