BOSTON — A key section of the House energy bill inserted by a Salem state representative to facilitate the controversial redevelopment of the Salem Power Plant has severely complicated negotiations between the House and Senate over a final bill in the waning days of formal sessions for 2012.
According to lawmakers close to the negotiations and outside groups who have tried to offer alternative solutions to long-term contracting that could help clean up the Salem site, the overtures have thus far been unsuccessful.
While some last week began to worry the disagreement could sink the entire bill, some lawmakers and officials from the administration Friday reported forward progress being made.
Energy and Environmental Affairs Secretary Richard Sullivan has been meeting with Rep. John Keenan, D-Salem, and Sen. Benjamin Downing, the
lead Senate conferee, to try to find a solution that does not involve offering Footprint Power, the New Jersey-based developer seeking to covert the Salem plant from coal to gas, a 15-year contract for energy.
The conference committee being led by Keenan and Downing also includes Reps. Kate Hogan and Matthew Beaton, and Sens. Stephen Brewer and Robert Hedlund.
Footprint has reached an agreement to purchase the plant from Dominion Energy and convert the 745-megawatt coal-fired plant, which is scheduled to be shut down in June 2014, into a 720-megawatt gas powered plant, though the deal has not yet been finalized.
The proposal has drawn some sharp opposition from some North Shore environmental groups, but Salem and other officials have supported the proposal based on the role the role the plant plays in that city’s economy.
The coal-fired plant, visible off the shores of Magnolia and especially Manchester, has also long drawn fire from activists and residents in that corner of Cape Ann over its emissions and the effect it has had on air quality.
Sullivan told the State House News Service last week that the Patrick administration has “significant concerns” about the language in Section 42 of the bill, but is “supportive of the concept of partnering with Salem on their redevelopment plan.”
“We’re still hopeful we can come to a resolution,” Sullivan said, adding that the administration was concerned about the impact a long-term contract for a specific plant would have on the deregulated energy generation market, including ISO-New England’s planning for future energy needs.
The House bill calls for distribution companies to enter into 15-year energy contracts for small amounts of natural gas-generated electricity from facilities located on the sites of former coal or oil-fired power plants, provided that the contract will have a positive impact on pricing.
Keenan has said the ability to sign a long-term contract would give a buyer for the Salem plant —and potentially plants in Somerset and in the Western Mass. city of Holyoke — the financial stability to invest in costly conversion and remediation of coal and oil sites.
“I’ve been very open about it. Is it going to be beneficial to Salem? Absolutely. I hope so. But will it be beneficial to Holyoke or Somerset someday? I hope so,” Keenan told the News Service earlier this month. “We’re going to cleaner energy, and I know some now complain that natural gas is no longer clean, but it is.”
Asked about the negotiations and the Patrick administration’s opposition to Section 42, Keenan said, “We continue to make progress. We’re working with them in mind, hearing their concerns.”
With formal legislative sessions set to end at midnight Tuesday — July 31 — a concerted effort to eliminate the section from a final compromise bill has been building by environmental groups and power generators.
Attorney General Martha Coakley last week came out against Keenan’s proposal, stressing the need for competitive bidding for long-term contracts, and Senate President Therese Murray said locking consumers into natural gas contracts with select generators does not make sense.
“The attorney general came out today and said that it’s the wrong thing to do and we shouldn’t be doing it, and now we’ve seen all the other plants are saying, ‘Hey, if that happens, then I need to be covered by this too. It’s just not something we can do. That type of long-term contract is not something we should be entering into,” Murray said.