My Turn: Is PSNH on the wrong side of history?

Last modified: 9/25/2013 12:54:58 AM
For about 100 years, the trend in the generation of electricity for public consumption was toward bigger and bigger power plants, culminating in shopping-mall-sized generators at nuclear plants and unimaginably huge hydropower developments.

For most of that time, larger power plants led to more efficient operation and lower-cost electricity.

Then several factors converged that changed everything.

The Seabrook class of nuclear plants required an unusual a mount of redesign during construction, which increased costs exponentially.

Political opposition to nuclear power plants over concerns with health and safety issues dragged out the construction, and the licensing process raised the cost of the plants through the roof.

Global climate change raised concerns over the effects of burning fossil fuels, particularly coal, to generate electricity.

Development of massive additional base load hydropower required both the costs of building hundreds of miles of roads to transport materials and equipment to remote construction sites as well as the additional massive investment for the infrastructure to transport the power hundreds of miles back to users.

Deregulation of electric utilities allowed price competition in the retail electric market.

PSNH has intimate acquaintance with each of these factors.

PSNH was the lead owner of Seabrook Station, which required almost total redesign during construction and endured years of political delay.

Seabrook actually doubled in cost after it was complete and ready to go online, due to opposition delayed licensing to operate.

PSNH has spent nearly half a billion dollars for a scrubber to clean up emissions from its Bow coal-fired power plant, which may be more than the plant itself is worth.

PSNH is now proposing construction of a $1.5 billion high-voltage transmission line from Quebec to southern New England, which has resulted in nearly universal political opposition along the proposed route.

PSNH has also lost a significant share of its retail customer base to lower cost suppliers.

Contrary to industry trend

All of this has come at a time when the utility industry across the country is trending away from centralized base load electric generation toward localized, consumer-controlled power, whether gas cogeneration, solar panels, geothermal micro-turbines, wind or methane recovery systems. The industry term for this is “distributed generation.”

This trend is expected to accelerate as the cost of generating technologies available to the public, particularly photovoltaic panels, continues to drop.

Expanded distributed generation is expected hurt both the availability and cost of capital to utilities.

According to the Edison Electric Institute, the electric utility industry trade association, distributed generation and demand-side management technologies (conservation) are among the greatest challenges faced by the industry today.

EEI makes analogies between developments in the deregulated airline and telecommunications industries over the past 35 years and what electric utilities can expect in the foreseeable future.

Forbes magazine and Bloomberg Businessweek have both published articles projecting the end of the national power grid as we know it.

Obsolete, dirty, inefficient

In the face of these challenges, PSNH is fighting tooth and nail to retain and operate obsolete, dirty, inefficient and unprofitable generating facilities and to import power from a massive and environmentally destructive power complex in another country.

Something is seriously wrong with this picture.

PSNH would appear to be in denial of present reality, much less the reality just down the road, while the clear need is for a visionary approach to solving the problems associated with a various and diversely sourced power supply.

Getting the solutions right is necessary to assure a reliable, efficient, and cost-effective distribution system available 24/7 to all its cus-tomers.

Meeting this challenge is going to be more complicated than delivering power from centralized generators under the control of the utility, but that is the direction that the business is moving.

If PSNH isn’t up to the challenge, it will go away and some other entity that can do the job will replace it. Remember Eastern Airlines? TWA? Pan-American?

Has anyone at PSNH been paying attention to what has happened to the use of landline phones?

(Jan Edick is a former IT employee of the Commonwealth Energy System, now part of Northeast Utilities.)

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