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PSNH to state Supreme Court: Was Bow plant’s mercury scrubber mandatory?

In a move to block further questions over whether and to what extent its customers should pay for a $422 million mercury scrubber, Public Service of New Hampshire has asked the state Supreme Court to clarify that a 2006 law mandated without exception that it install the equipment at the coal-fired power plant in Bow.

The utility argues in an appeal filed Sept. 27, which the court has yet to accept, that regulators recently changed their stance on the project, asserting since December that PSNH could have backed out of it as cost estimates continued to rise.

“PSNH committed to investing in excess $400 million to meet this legislative mandate and for the PUC to reverse course and say its scrubber law was not a mandate after years of agreeing it was, is, we believe, a violation of our constitutional due process rights,” company spokesman Michael Skelton said.

Specifically, the company has appealed four recent orders from the Public Utilities Commission compelling it to provide data about the installation that environmental and consumer advocate groups, as well as competitors including TransCanada, have demanded. Those groups have long contended that PSNH spent too much on the project and should have abandoned it as the recession took hold and the price of natural gas began to plummet.

PSNH also argues the PUC overstepped its authority by weighing in on the law’s binding nature because it had previously stated such a judgement was beyond its jurisdiction.

Commission representatives declined to comment on pending litigation.

At stake is who will shoulder the cost of the scrubber, which went online in 2011, and to what extent. Since April of last year, the company has charged default customers .98 cent per kilowatt hour to begin recouping costs for the project. That rate is temporary and could change depending on what permanent rate the PUC eventually sets. If it was found that PSNH spent an unreasonable amount on the project, the utility could be liable for some of the costs.

In 2006, lawmakers ordered PSNH to install the scrubber at Merrimack Station by July 2013 to reduce emissions of mercury and other pollutants. The project was initially estimated to cost about $250 million, but that figure swelled to $450 million.

According to the appeal, between 2008 and 2012, the PUC characterized the project as obligatory, issuing “multiple decisions expressly finding that PSNH was required to build the scrubber; that the PUC had no jurisdiction to review the construction or the overall costs of the scrubber; and that specific Legislative findings that installation of the scrubber was in the public interest of the citizens of New Hampshire, and the customers of PSNH in particular, prevented the PUC from making contrary findings.”

But PSNH said the commission fundamentally changed its stance in the Dec. 24 order last year.

In that order, regulators indicated that spending $450 million to reach an 80 percent mercury reduction, as originally outlined by legislators, was not “reasonable,” as also outlined by the law, and PSNH therefore had justification to request a variance for a lower emission cap, “or from any installation of mercury reducing technology.”

PSNH has come under scrutiny recently for its above-market rates, which have prompted a majority of its customer base to switch to cheaper suppliers that rely almost exclusively on natural gas. Some legislators and regulators fear that, as the migration continues, PSNH’s costs will unreasonably burden its remaining customers. Those effects could become even more pronounced if a higher mercury recovery rate is established.

(Jeremy Blackman can be reached at 369-3319, jblackman@cmonitor.com or on Twitter @JBlackmanCM.)

I can think of 422 million reasons why psnh of CT would like us to believe that they were forced to build something that would be obsolete before it was finished - or maybe even before it was started. No more public bailouts for bad business decisions like spending more to continue burning coal in NH than a brand new cleaner burning natural gas plant would have cost.

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