The Federal Energy Regulatory Commission, or FERC, is scheduled to hold a hearing tomorrow on a controversial plan to add more power plants in New England.
The Locational Installed Capacity Proposal, or LICAP, could cost the region's ratepayers as much as 13 billion dollars.
New Hampshire Regulators have criticized the plan for being too expensive and a potential boondoggle.
But a new group made up of power plant owners has recently formed to breathe new life into LICAP.
New Hampshire Public Radio's David Darman has more.
The group of Power plant owners backing LICAP call themselves the New England Coalition for Reliable Energy, or NECORE.
Susan Geiger is a member of NECORE's advisory committee.
She used to be one of New Hampshire's Public Utility Commissioners and is now an attorney at Orr & Reno in Concord who represents power plant owners.
She says with energy demands growing 1 and a half percent every year, the region needs new power plants.
And she says LICAP would raise the money to pay for them.
...these payments, in my mind, take the place of what happened in the old regulated world where utility regulators would tell generators, yes, if you go out and build we'll compensate you for those plants.....
In the new deregulated world, LICAP would raise 10 to 13 billion dollars from ratepayers to fund the new investment.
New Hampshire itself is in no danger of running short of electricity.
The state's power plants produce nearly twice as much as needed.
Much of that excess heads to Massachusetts and Connecticut, two states that frequently run short of power.
Greater Boston and Southwest Connecticut can't always import what they need, because their transmission lines are inadequate.
Some upgrades in the transmission grid are in the works, but the region's energy planners, ISO New England, say that won't be enough to satisfy future demand.
ISO New England spokesperson Ellen Foley says LICAP will help spur investment in new power plants, which isn't happening under deregulation.
what people tend to forget is that we have to pay for generating capacity. we haven't been paying for it for over the past few years because we've had excess capacity across the region. but we're getting to the point in the very near future where we could be short. and the bottom line is we're going to have to pay for it, and how we pay for it, is at issue today.
New Hampshire regulators don't dispute that energy use is increasing, or that there's a looming shortage of electricity in Boston and Connecticut.
Anne Ross is New Hampshire's Consumer Advocate.
She says LICAP would raise rates for many of the state's electric customers by as much as 20 percent.
And she says power plant don't have to invest in new plants, if they don't want to.
... there's no obligation when they receive that money that they do anything other than give it to their shareholders. there's no obligation that they build any new capacity or that that capacity be in place in the next few years, and so we view it as simply a dole, with no requirement that there be any results as a result of this payment. ...some people call it 'pay and pray'.
Ross adds that NECORE's members would reap millions from LICAP if it goes into effect.
And NECORE officials won't say which companies are in the association.
But every power plant owner in the region would share in the 13 billion dollar LICAP program.
That means the owner of the Seabrook Nuclear Power Plant, Florida Power & Light, would reap a substantial sum.
That's because LICAP pays bigger sums to plants that produce a lot of power, like Seabrook.
And it pays more to plants that are near Boston, and Seabrook is only 42 miles from the city.
Mirant Corporation of Atlanta also stands to gain a significant sum.
The company owns a small plant right in Cambridge, Mass.
And its biggest holding in New England is on Cape Cod.
Mirant supplies electricity to Unitil Corporation in New Hampshire.
The situation that spurred LICAP has been brewing for years in Connecticut.
There, state regulators assured enough power by paying some plants to keep producing, even though they may be expensive and cause unnecessary pollution.
These are called "Reliability Must Run", or RMR plants.
Attorney Doug Patch is also a member of NECORE's advisory committee.
He used to chair New Hampshire's Public Utility commission.
He argues that being able to build new plants would reduce the need for older facilities.
the concept behind licap is to create a situation where you actually build newer, cleaner plants going forward, rather than to rely on rmr contracts that will actually continue some generating plants that aren't very clean and aren't very well run, just so there's enough power available.
The Federal Energy Regualtory Commission, or FERC official signed off on the plan back in June.
But several of New England's state regulators protested the approval, and got FERC to hold another hearing.
Tom Frantz is the director of the Electric Division in New Hampshire's Public Utility Commission, or PUC.
we were greatly concerned that we were going to be saddled with licap and alternatives would not be looked at it. and that still possible but i think by the very nature of ferc scheduling this hearing ...and the full ferc sitting on the hearing, which is...unusual in ferc proceedings demonstrates their keen interest and awareness of how important an issue this is.
The FERC hearing begins at 10 tomorrow/this morning.
