The question of who will pay the cost of cleaning up emissions from the state’s largest coal-fired power plant is before the Public Utilities Commission this week.
“The issue that we’re facing here today is that as a result of increases of costs of commodities as well as increases in the engineering complexity of what we had to build, the price was higher than a lot of people expected it to be,” said PSNH’s lead attorney Bob Bersak.
Originally the mercury scrubber on Merrimack Station in Bow was estimated to cost $250 million dollars, but when it was finally built, it cost $422 million. If ratepayers wind up picking up the whole tab for the scrubber, it will add a total of 1.87 cents per kilowatt hour onto what PSNH customers’ bills. Already, rate-payers are paying 1 cent per kilowatt hour as a preliminary rate.
According to a report PSNH commissioned in 2008, the cost escalation was due to the unique nature of the scrubber PSNH built – it catches mercury as well as other types of pollution, and specifics of the power plant and its site made for a complicated installation.
PSNH was required by law to build the scrubber, but the law’s language says the company is only entitled to be repaid for “prudent” costs. This week and into next the PUC will hear arguments as to whether it was prudent to build even after it became clear that costs were going to be substantially higher.
PSNH’s opponents, which include competitor Transcanada as well as environmental groups, contend the utility should have retired the power-plant once it learned of the price escalation.
