Brayton Point Closure About Economic Reality
December 14, 2013
SOMERSET, Mass. — When Pauline Rodrigues went to lunch with a friend recently, she heard her friend’s husband tell his wife, “Bring an armored vest.”
He was only half-kidding.
Rodrigues, a grandmother of five, has worked diligently to get the 50-year-old, coal-fired Brayton Point Power Station in her town to clean up or shut down. She hears the snipes and sees the nasty posts online. She said she tried to get the weekly Spectator not to use her photo. But when she testified in Boston last month for legislation to help towns with power plant closures, she ended up on the front page.
It’s not that Rodrigues isn’t concerned about how the Brayton Point closing will impact the town’s finances. She said many people moved to Somerset for its low tax rate, as she did shortly after she married.
“We still have to do what we think is right,” Rodrigues said. “My youngest grandson has asthma, although there’s no family correlation to it. I’m not going to leave my grandchildren much. The least I can do is leave them clean air.”
Critics blame her and other environmental activists for the October announcement that Brayton Point will close in May 2017, signaling a substantial drop in local tax revenue and the loss of about 200 jobs.
But closing Brayton Point had more to do with the economy than the environment. Coal has been on the way out in New England for a dozen years.
A long time coming
Brayton Point’s drop from operating at 80 percent capacity to just less than 15 percent between 2005 and 2012 was part of a trend for coal-burning plants throughout New England.
ISO New England, the region’s grid operator, said retiring older coal-fired plants is part of its strategic planning initiative. ISOs, or individual system operators, take bids from power plants as part of a program that ensures competitive market prices for energy while retaining reliability in the grid.
Coal went from contributing 18 percent of New England’s energy capacity in 2000 to just 3 percent in 2012. Natural gas jumped from 15 percent to 42 percent in that time, according to Stephen Rourke, vice president of system planning at ISO New England.
Reliance on natural gas drove prices down, making coal non-competitive. Natural gas burns cleaner and more efficiently than coal and oil, and so provides a cheaper source of energy. In fact, ISO New England’s strategic planning initiative calls for phasing out coal plants except as providers during peak demand.
Dominion Energy, a short-term owner who picked up the Brayton Point plant in 2005, sold it off to Energy Capital LLC with two other properties for a total of $650 million in September. Five weeks later, Energy Capital announced the closure.
Brayton Point has contracted future capacity with ISO New England up to May 31, 2017. The decision to close came on the heels of advance bids to buy future capacity for the period beginning June 1, 2017. Energy Capital didn’t say that the bids failed, but did say that difficulty in staying competitive against natural gas was a factor in the decision.
A template for planning
Like Brayton Point, the Salem Harbor Power Station is a 50-year-old coal plant recently bought by Dominion that now yields far less in property taxes and is slated for closure. The 65-acre plant generates about half the energy of Brayton Point. Also like Somerset, local residents and environmental groups have raised concerns both about the impacts from the existing plant and the site’s future use.
In 2012, the city of Salem secured a grant from the Massachusetts Clean Energy Center (MassCEC) to prepare a site-assessment study for Salem Harbor, using the well-known consultants Jacobs, Sasaki Associates, LaCapra Associates and Roberts Charles Lesser Co. to tackle master planning, energy market analysis, economic analysis and facilities planning. The city’s plan led to the state-funded mandate creating the Salem Harbor Revitalization Task Force to address the economic impacts on Salem by the plant closure.
By this past June, the Salem Harbor Revitalization Task Force completed an in-depth review of the history, economics and environmental impacts associated with alternative uses of the 65-acre waterfront site. Having the task force working on a revitalization plan brought access to five retraining agencies to work with Salem Harbor’s 150 workers.
With that much advance planning available, Footprint Power Inc. proposed a mixed-use site with commercial retail and a small natural gas plant.
At a meeting with the Board of Selectmen and town officials last August, Rick Sullivan, secretary of the Executive Office of Energy and Environmental Affairs, offered Somerset $100,000 toward planning for transition, hoping it will follow in the footsteps of Salem. Somerset also is eligible for up to $3 million in Regional Greenhouse Gas Initiative (RGGI) funds, according to town administrator Dennis Luttrell. Luttrell said he had applied for planning funds from MassCEC, headed by Sullivan.
As a step toward receiving RGGI funding, the town voted nearly unanimously at Special Town Meeting on Nov. 4 to approve a five-year payment-in-lieu-of-taxes (PILOT) agreement with Brayton Point. The PILOT reduces taxes on the plant by $3.5 million for fiscal 2012 and 2013. In return, Brayton Point agreed to pay $7 million in fiscal 2014, $5.5 million in fiscal 2015 and $4.25 million in fiscal 2016.
The agreement will lower Brayton Point’s share of taxes to just more than 10 percent of the total tax levy by the time it closes in 2017.
Meanwhile, the Citizens Transition Committee, Clean Water Action and the Toxic Action Center are moving ahead with a grassroots planning effort that started last April. About 60 people showed up to offer ideas at a planning charrette held at Somerset Old Town Hall. Now, with the plant closure in sight, the group is ramping up efforts to get a plan in place before it closes.
On Dec. 17, with the likelihood of the State Transition Task Force visiting Somerset in January, the groups are holding a public meeting to discuss outreach for the task force meeting. They’ll also discuss the results of Town Meeting and possible bylaws that could help the town transition to a new use for Brayton Point.
The Citizens for Transition meeting is scheduled to be held this Tuesday from 6-8 p.m. at Somerset Old Town Hall, 1458 County St.
“Somerset has a unique opportunity to plan for its future and it’s critical that the community be prepared,” said Joel Wool of Clean Water Action. “The upcoming visit of the statewide task force is a unique opportunity for the public to weigh in with policymakers, determine the needs of the region, and shape a vision for the years to come.”
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