While Christie Strong Arms DRBC to Fast Track Approval of Fracking
[Update below]
Just when you thought it couldn’t get worse.
On Tuesday, I wrote about the absurdity of Christie’s energy policy, so my outrage is fresh and pain threshold still pretty high.
But, I’ll be damned, reading the press clips this morning managed to trip my outrage meter – twice!
First, I read Tom Johnson’s story in today’s NJ Spotlight: BPU’s Lee Solomon Blasts Federal Agency – Frustration with FERC apparent as BPU president condemns regulatory structure as “unjust, inequitable, and outrageous”
Tom expands upon on an issue I wrote about last week in Enter the Twilight Zone of Energy Policy, where I noted the absurdity of subsidies to coal plants:
I recently read a PSEG document that bragged see: Capacity Markets Ensure Reliability] that PJM capacity payment subsidies were what kept NJ coal plants open! (at over $1 billion in new pollution control costs, paid by ratepayers, not PSEG shareholders and investors [see: Doing Coal Right]).
At a time of global warming crisis, when we should be doing everything possible to shut down coal power plants, it is inconceivable that PSEG was allowed to spend over $1 billion – of ratepayer money no less – on pollution controls at the Mercer and Hudson County coal plants .
It is even worse that PSEG’s disasterous decision was driven by PJM subsidies known as “capacity payments“. Without those huge subsidies (over $1.2 billion per year in NJ), the NJ coal plants are not economic and would be shut down.
But the story being spun now is that PSEG wants to shut down the “obsolete” coal power plant in Hudson County, but allegedly is being blocked by the Federal Energy Regulatory Commission (FERC), who wants to keep it open for “reliability” purposes.
But if that is the story, why did PSEG spend $700 million to retrofit pollution controls on that obsolete plant and why are they now seeking $59 million in ratepayer money? (is that a recovery of the Hudson plant’s portion of those $1 billion in pollution control upgrades?). Hard to tell without reading the rate case filing (hint to NJ Spotlight: post links to the regulatory documents so wonks like me can read and find out!).
And in noting the irony of the situation, Rate Counsel brings in the unrelated issue of the Christie Administration’s plans to develop more in state power. Those plans were blasted just yesterday by NJ business groups .
But the $1 billion Mercer and Hudson pollution control investment decision, PJM capacity payments, and Christie plans are complex but distinct issues that unforunately are blended in the story as follows:
Solomon’s comments came as the agency was debating a motion to intervene in a case before the Federal Energy Regulatory Commission (FERC) in which a power plant owned by PSEG Power in Hudson County would receive $59 million in ratepayer money to cover improvements so it could remain available to run if needed to maintain the reliability of the regional power grid.
Rate Counsel questioned the need for Hudson to ensure reliability and notes the irony of the PJM ordering ratepayer subsidies to keep in service an “obsolete” plant while opposing efforts to build new, more efficient plants with ratepayer subsidies.
The Hudson plant ran 25 days in 2010, according to Michael Jennings, a spokesman for PSEG Power, which owns the facility. Last year, the plant received approximately $9 million in RMR payments, according to Raymond DePillo, vice president of power operations and asset management for PSEG Resources, an affiliate of PSEG Power. The company receives a 12 percent return on carrying costs for the money it invests in the upgrades, according to PSEG officials.
Nonetheless, the company, in a filing it made with PJM this past Monday, said it would prefer to close down the unit “as soon as possible,” a stance it has held for the past several years. “If PJM can identify other areas to reliably operate the affected portions of its system, the PSEG Companies will move forward with the retirement of the unit,” the filing said.
If these issues were made distinct, BPU Lee Solomon’s outrage at FERC could be seen as a diversion from NJ’s own failed energy policy.
Not to be outdone by Solomon’s diverionary tactics, PSEG takes hostages.
In the close of the story, we learn that PSEG and regulators see lower energy costs on the horizon, but only if they are allowed to build the destructive Susquehanna – Roseland transmission line, to import more dirty coal power!
They acknowledged prices are steeper in northern New Jersey but argued they will fall when new transmission projects are completed, particularly the Susquehanna-Roseland project, which runs from the Delaware Water Gap to Roseland in Essex County.
And for all those rabid right wing RGGI opponents out there, please note that the $59 million is close to the annual RGGI auction proceeeds, which were $65 million last year.
After my head exploded reading that NJ Spotlight story, the next one I came upon was Sandy Bauers’ Philly Inquirer story N.J. pressures river panel to adopt gas rules, which begins.
New Jersey is playing hardball with an interstate commission considering rules on natural gas drilling affecting the Delaware River.
At two recent meetings of the Delaware River Basin Commission (DRBC) – one of them Wednesday – the New Jersey representative, John Plonski, said the state might withhold payments to the financially strapped commission if it failed to vote on the rules at its next meeting, in September.
Critics said the state was improperly engaging in strong-arm tactics.
“It’s shocking that a state would pull this kind of bullying tactic that amounts to extortion,” said Tracy Carluccio of the Delaware Riverkeeper Network, an environmental-advocacy group.
Those DRBC rules are not only seriously flawed, adoption would lift the current DRBC moratorium on fracking in the Delaware watershed.
NY State just agreed to lift their moratorium on fracking, and Pennsylvania is experiencing and strongly backing a huge expansion in drilling.
So, adoption of the DRBC regulations would open the door to drilling oover 18,000 wells in the watershed.
This is why the Christie DEP is strong arming the DRBC – they are doing the dirty work of their gas industry backers at tremendous risks to NJ’s economic and environmental interests:
Lifting the current DRBC moratorium would open the door to over 18,000 wells in NY and Pennsylvania, according to DRBC. Those wells would use over 100 BILLION gallons of water; generate more than 25 BILLION gallons of toxic hazardous wastewater with unsafe levels of radioactive contaminants; and destroy over 150,000 aces of forests and farms, more than all the land protected by the NJ Highlands Act.
At I said, my outrage meter was tripped.
[End note: this post was corrected to try to clarify the Hudson coal unit (that got the $700 million upgrade) from the gas unit (seeking the $59 million to upgrade) – sorry for any confusion. Tough to figure all this complex stuff out without the underlying regulatory documents. It is my policy here at Wolfenotes to work off and post the underlying documents for readers to consider.]
[Clarification: 8/5/11 – Hudson unit #1 is gas and oil fired, Hudson Unit #2 is coal.]
[Update:
NJ Spotlight reports today that it Unit #1 will be closed. It was under a $28 million pollution control upgrade per DEP’s March 2, 1011 Clean Air Act Regional Haze BART determination. PSEG spent $700 million upgrading unit #2 coal – that money would have been much better spent closing that unit down and investing in efficiency and renewables. end update]
But now it’s just another show
