PSEG Power To Shut Down Hudson I Plant
Shuttering the aging facility could save consumers nearly $60 million dollars that would be needed to keep the unit in service
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By Tom Johnson, August 5 in Energy & Environment |1 Comment
The state is getting its wish: PSEG Power's Hudson I plant will close, a step that could save ratepayers millions of dollars that otherwise would be needed to keep the aging facility in service to maintain the reliability of the regional power grid.

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PJM Interconnection, the independent operator of the regional grid, this week told PSEG Power it could retire the plant, a step the power supplier has been advocating for the past several years. The decision marked a reversal for PJM, which repeatedly argued the unit is needed to keep the lights on, especially given delays in building a controversial transmission project through the heart of the New Jersey Highlands.

The concept of keeping an older, inefficient plant in service, backed by $59 million in consumer payments to fund upgrades to the unit necessary to keep it serviceable, had become a huge bone of contention between PJM and the state. New Jersey officials said it reflected the failure of a costly system the regional grid operator has adopted to incent new power generation to be built where needed.

Reliability Must Run
According to the state Board of Public Utilities (BPU) and New Jersey Division of Rate Counsel, that system has cost ratepayers upward of $1 billion a year without encouraging much new development of power plants. To pay nearly $60 million for a plant under so-called Reliability Must Run (RMR) contracts that ran only 25 days last year only increased their frustration.

"Our top concern was paying a lot of money to keep an environmentally unsound facility running," said BPU President Lee Solomon. "The concept of paying RMR payments is unconscionable. It was going to be extremely costly to ratepayers to keep it open."

The decision was welcomed by PSEG Power as well.

"We long wanted to retire Hudson unit 1 and kept it in operation at PJM's direction to ensure the reliability of the grid in Northern New Jersey," said Michael Jennings, a spokesman for PSEG Power, one of the largest power providers in the region. " It is our job to provide the power that keeps the air conditioning and lights on."

Ironically, the decision to allow the plant, which burns both natural gas and oil, to close in about four months was made only days after the Federal Energy Regulatory Commission (FERC) decided to approve a Reliability Must Run contract for Hudson I.

Reliability Analysis
PJM reversed itself after conducting a reliability analysis based on the assumption that the Susquehanna-Roseland line would not be operational until June 2015. Previously, the grid operator said there was an increased risk of brownouts if the line was not operational by next summer.

In the latest analysis, however, PJM concluded that sufficient Demand Response exists to control the loading on the constrained facilities through 2014. Demand Response helps ease peak demand by asking large energy users to voluntarily reduce demand for electricity when power supplies are tightest, typically during hot summer days in heat waves.

Ray Dotter, a spokesman for the PJM, said the grid operator decided the system could be run more conservatively by importing less power into New Jersey and relying on more in-state generation. Dotter noted, however, that option means depending on more expensive, less efficient plants to provide the power.

"There will be a cost to operate the system more conservatively," said Dotter. He could not quantify what that cost would be, however.

*note-"only Unit 1, which runs on natural gas, will be closed. Unit 2, which is much larger and burns coal. will remain open".


http://www.njspotlight.com/stories/11/0805/0201/

PSEG gains deal to keep coal plant open for years
Friday, December 01, 2006
BY TOM JOHNSON
Star-Ledger Staff

Public Service Enterprise Group yesterday announced a deal with environmental regulators allowing it to keep open its Hudson County coal-fired power plant for up to four years, a station long de cried by environmentalists as one of the dirtiest power plants in the state.

Under an amended consent decree, its PSEG Fossil unit agreed to pay a $6 million penalty, plus contribute another $3.25 million to help reduce pollution from trucks. The company failed to install pollution controls at the 608-megawatt plant as it agreed to do four years ago under a previous consent order with the state Department of Environmental Protection and U.S. Environmental Protection Agency.

Without the consent decree, the company would have had to shut down the plant, located on the Hackensack River in Jersey City, a decision that could have caused problems in meeting power demands in the region and push electricity prices higher for consumers.

Under the deal, the company is required to install tougher pollution controls at Hudson and another coal-fired plant it owns in Mercer, at a cost expected to run between $170 million and $220 million. The additional controls will more than make up in emission reductions it would have achieved if it had put in the pollution equip ment originally proposed, regulatory officials and the company said.

"These are very strict penalties," said Alan Steinberg, regional administrator for Region II of the EPA. "Without question, it is one of the largest settlements in the history of the metropolitan area."

But Jeff Tittel, executive direc tor of the New Jersey Sierra Club, criticized the decree, saying the plant should have been closed or converted to cleaner-burning natural gas. "It's still cheaper to pay the fine than make the needed investments in pollution controls. Right now, it is just a cost of doing business."

PSEG decided not to install the pollution controls under the original decree, which were then esti mated to run more than $337 million at both Hudson and Mercer, because of changing energy markets, the cost of capital and the possibility it could have a negative effect on its credit ratings.

Under the deal, the company has to notify state and federal officials by 2007 of whether it intends to install the pollution controls. If not the plant would close at the end of 2008, or by 2010, if officials determine the plant is needed to maintain reliability of the power grid.

Tom Johnson may be reached at tjohnson@starledger.com or (973) 392-5972.

Cleanup costs could doom PSEG plant
Friday, September 29, 2006
BY TOM JOHNSON
Star-Ledger Staff

PSEG Power may have to shut down its coal-fired power plant in Hudson County by the end of the year, backing out of an agreement with government authorities to spend hundreds of millions of dollars to curb pollution from what is one of New Jersey's dirtiest power plants.

The decision to close the plant will hinge on whether the company, a subsidiary of Newark-based Public Service Enterprise Group, can renegotiates a consent decree with state and federal environmental agencies about the future of the generating station.

The closure of the 608-megawatt unit, located on the Hackensack River in Jersey City, about three miles upstream of Newark Bay, could cause problems in meeting power demands in the region and might push electricity prices higher for consumers, according to experts.

The dispute leaves regulatory officials weighing the importance of reducing pollution against the need to ensure there is enough power to keep lights on at times of peak demand.

"Anytime you take 600 megawatts off line in the Northeast, it's going to have an impact on reliability," said David Brown, a vice president of NUS Consulting, an energy consulting firm in Park Ridge. "It also will have an impact on pricing, because there will now be less power up for bid and there is going to be a scramble to replace it."

In a settlement that was widely hailed at the time, PSEG Power agreed in January 2002 to spend up to $337 million to cut pollution from its Hudson and Mercer power plants, both of which are coal-fired. While work has proceeded at the Mercer facility, the company decided not to move ahead with the Hudson modification because the cost of the project has doubled, according to Neil Brown, a spokesman for PSEG Power.

There were a number of other factors, Brown said, including changing conditions in energy markets, the cost of capital, and the potential impact on the company's credit ratings.

A decision to shutter the plant would be welcomed by environmentalists, who have long pressed the state to shut down coal-fired power plants because they are a major source of mercury emissions.

"There's no such thing as a clean coal plant," said Jeff Tittell, a lobbyist for the Sierra Club of New Jersey. "They're better off shutting it down."

However, the PJM Interconnection, which oversees the regional power transmission system, has concerns that closure of the plant will adversely affect the reliability of the power grid.

PJM declined to comment specifically on the Hudson plant, but Paula DuPont-Kidd, a spokeswoman, said it routinely examines planned plant retirements within the region.

"We have indicated that any additional plant retirement in New Jersey could substantially affect system reliability," she said.

In negotiations with state and federal agencies, PSEG Power has proposed an alternative plan that would achieve similar environmental benefits as those stipulated in the original consent decree, but though other means.

"It reflects the environmental integrity of the original agreement while providing more time to go forward with the retrofitting or retirement of the plant," Brown said. "We're hopeful we will reach an agreement to reach those goals."

Edward Choromoski, administrator of air compliance and enforcement for the state Department of Environmental Protection, said the agency is negotiating with the company about whether to amend the agreement, but declined to say how the talks were proceeding.

Within the next week, PSEG Power is likely to send a notice to PJM that it has not reached an agreement on the plant, notifying the power grid operator the plant may not be available next year, Brown said.

Tom Johnson may be reached at tjohnson@starledger.com or (973) 392-5972.

I signed on for one of the choices in the CleanPower program, a combo of wind/hydro and a tiny bit of solar. Haven't gotten a bill yet, but the website gives info about the relative cost.

Speaking of PSE&G and coal plants, is anyone in the forum currently signed up for "Green Power" from PSE&G? If so, how much more expensive is it? I am all for it but need to call up and get more information... feel free to share.

Let's save the planet!

Ha! Texas beat you on this one. Gov. Perry is fast tracking 16 more polluting coal plants here so keep your head high NJ'ers. You'll soon be down to #30 on that list.

http://www.dallasnews.com/sharedconte ... opowerplants.1227d94.html

Interestingly, PSE&G is claiming that these dirty, addled plants -- which are slated for sale if the merger with Exelon is approved -- are the plants that are setting electricity rates in the region. They use this rationale to dispel fears that the new company will be so large that it will be able to manipulate energy supply, and therefore, rates. I don't know about you, but it seems highly unlikely to me (and to many independent analysts) that these old, dirty coal plants are setting rates. Yet another reason to fear (and help stop) the merger. Read more here.

Study faults two PSEG coal plants - Jersey City's PSEG coal plant is ranked 12th "dirtiest" power plant in the nation!

By EILEEN STILWELL
Courier-Post Staff

Public Service Enterprise Group, parent company of PSE&G, owns two of the 50 "dirtiest" power plants in the nation, according to a study released Thursday. The study was released by a Washington, D.C., research group that monitors compliance with federal environmental laws.

PSEG's Hudson Generating Plant in Jersey City ranked 12 and its Mercer Generating Station in Hamilton Township ranked 36 out of 400 fossil-fuel plants in the country, based on a composite score of emissions of four pollutants: sulphur dioxide, carbon dioxide, nitrogen oxide and mercury.

They are the only remaining coal plants in PSEG's New Jersey portfolio of 11 power stations.

Built in the mid-1960s, the Jersey City plant topped the list for carbon dioxide, according to the 50-page study conducted by Environmental Integrity Project, a nonprofit, nonpartisan think tank.

PSEG agreed with the volume of emissions cited in the report, but challenged the rate per megawatt hour the study showed.

"We can't say where the under-reporting came from at this time, but we believe the rate of emissions is in error," said utility spokesman Neil Brown.

PSEG has steadily reduced emissions at the two plants and plans to continue working on the problem, Brown said.

If PSEG's plan to merge with Chicago-based Exelon is approved, New Jersey's largest utility company must divest itself of the two coal plants for antitrust reasons.

"It should come as no surprise that coal produces more emissions than other fuels. However, coal can be operated in an environmentally responsible manner," Brown said.

Suzanne Leta, energy consultant for New Jersey Public Interest Group, said the study should be a nail in the coffin for advocates of a coal comeback to offset the cost of oil and natural gas and public safety issues surrounding nuclear power.

LS Power Development LLC hopes to build a $1 billion coal-burning electric plant that could fuel 500,000 homes in West Deptford.

It is one of approximately 150 new coal-burning power plants that are being proposed across the country to satisfy increased energy demands.

The New Brunswick-based LS Power has signed an agreement with West Deptford to purchase the site for $14 million, contingent upon local, state and federal approvals.

Cleaner air is possible even from coal-burning plants with limestone scrubbers, according to the report, which found that more companies are installing them.

Information for the report was culled from required filings with the U.S. Environmental Protection Agency and the Department of Energy.

The worst-scoring plant in the nation is the Leland Olds plant in North Dakota. Three plants in Pennsylvania and one in Delaware also made the list.