Concord Steam closure could force state to pay $15 million to convert to natural gas

  • The Concord Steam plant is seen at night in May. GEOFF FORESTER / Monitor file

  • Hoses carrying gas are seen connected to a boiler furnace at the Concord Steam Corp. plant in Concord on Tuesday, June 9, 2015.(ELIZABETH FRANTZ / Monitor staff)

  • Plant operator Neil Stewart of Manchester opens an access door to one of the boiler furnaces at the Concord Steam Corp. plant in Concord on Tuesday, June 9, 2015.(ELIZABETH FRANTZ / Monitor staff)

Monitor staff
Published: 8/8/2016 6:36:07 PM

The state is facing an unanticipated $15 million charge to convert more than two dozen buildings to natural gas after Concord Steam Corp. announced plans to close next year.

The steam plant off Pleasant Street heats about 25 state office buildings in Concord, including the State House, state library and the Legislative Office Building downtown.

The state had planned to switch heat suppliers by spring 2019, and pay for it with energy savings. But Concord Steam is requesting to cease operations by next May and turn over its customers to Liberty Utilities, leaving the state scrambling for a plan.

“We anticipated there would be a more gradual time frame,” said Michael Connor of the Department of Administrative Services. “At this point everything is on the table, and we’re looking at all our options.”

While natural gas rates are cheaper than steam, the state would have to pay an estimated $15 million upfront to convert the buildings’ heating systems. The work includes installing boilers in some of the state’s most historic buildings, a process that could take years, Connor estimated. “The challenge is the timing,” he said. “It is really not reasonable for the amount of work that needs to be done.”

The department has been in talks with lawmakers, Connor said, but has yet to identify a funding source.

Once Concord Steam dissolves, Liberty Utilities has offered to let the state run the plant for two years. Then, the state could heat its own buildings while they are converted to natural gas. The state owns the plant already and has leased it to Concord Steam since 1979.

“They would basically be serving themselves with steam service,” said John Shore, a spokesman for Liberty Utilities. “It wouldn’t be a public utility any longer.”

Peter Bloomfield, president of Concord Steam, said he offered to operate the plant for the state should they choose that path.

But Connors said the option is not preferred. It would be costly for the state to run the aging plant, which has been cited by the state fire marshal’s office for serious life safety and fire code violations. In the long-term, the state plans to demolish the entire building and replace it with a parking lot.

“We put a million dollars into a plant that we will mothball a year later,” Connor said. “I would rather put my money into something that will be there for years to come.”

The steam plant’s closure isn’t yet a done deal. The state Public Utilities Commission needs to sign off on the agreement, which would let Liberty Utilities buy the company for $1.9 million.

Concord Steam is also seeking an emergency 23 percent rate increase to offset declining revenue. If state energy regulators approve the increase, it would tack on an estimated $600,000 to the state’s $2.7 million annual energy bill, Connor said.

A number of other customers would be affected by the plant’s closure, including many Main Street buildings and the city hall campus. Concord Steam currently has 84 commercial and institutional clients and a single residential customer. Most of the state’s buildings on steam are at the Governor Hugh J. Gallen State Office Park.

(Allie Morris can be reached at 369-3307 or amorris@cmonitor.com.)




Concord Monitor Office

1 Monitor Drive
Concord,NH 03301
603-224-5301

 

© 2019 Concord Monitor
Terms & Conditions - Privacy Policy