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Dominion: Salem Harbor plant will close in June 2014

Posted by Sean Teehan  May 11, 2011 12:54 PM

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The company that owns Salem Harbor Power Station announced today that it will partially close the station by the end of the year and completely shut down by June 1, 2014.

The move comes one day after ISO New England, the local power grid's manager, informed Dominion, the Virginia company that owns Salem Harbor, that it could close two of the plant's four units by June 2014. A shutdown of the two larger units -one powered by coal, the other oil- at that time would endanger the power grid's reliability, an ISO spokeswoman said yesterday.

Dominion officials told ISO officials of their decision this morning, a Dominion spokesman said in a telephone interview today. The ISO does not have the legal authority to prevent Dominion from shutting the plant.

 “This was a decision we had to make given the significant costs required to keep the station in compliance with pending environmental regulations and the falling margins for coal stations selling electricity in New England,” wrote David A. Christian, chief executive officer of Dominion Generation, in a statement.

Dominion said last year that they would not invest any more funds needed to comply with new environmental regulations and sought to delist the plant  last October. They subsequently filed a non-price retirement bid with the ISO in February seeking permission to close the plant June 1, 2014.

“We would have been faced with spending millions to comply with new environmental regulations without assurance of full cost recovery before committing to support the ISO’s reliability needs,” Christian said in the statement. “We could not take that risk.”

With 145 workers, the plant is among the Salem's top 15 employers. It paid $4.75 million in property taxes and a host fee last year.

Update: Salem Mayor Kimberley Driscoll this afternoon issued a statement on the closure. Here it is in full:

"Harbor Station has been located in Salem for over 50 years and, over that time, has been an important financial contributor to our community. The power plant is – far and away - the largest taxpayer in the City and its ceasing operations will have real impacts to the City’s finances.  In addition, Dominion has been a strong civic partner and annually contributed to many meaningful causes in the City.

Fortunately, the City was awarded a $200,000 grant from the Clean Energy Center to plan for the eventual re-use of this property.  That study is underway and we are working with engineers and land use planners on re-use options. In addition, we have already started to reach out to state and federal officials to ask for their cooperation and assistance in planning for the future of the Salem Harbor Power Plant. Thus far, these officials have expressed a willingness to be involved and assist the City in anyway possible.  In particular, the Secretary of the Office of Energy and Environmental Affairs Rick Sullivan (former Mayor of Westfield) has pledged his help as we transition to a new development for this site.
 
While this closure certainly presents tremendous challenges, it also brings great opportunity for the City of Salem to transition an older, less efficient carbon based power generating facility into an attractive, cleaner, renewable energy resources to the City, not to mention other waterfront related redevelopment options that may exist.
 
I look forward to working with Dominion and all interested stakeholders in making sure that this site does not stay dormant following the power plant’s closure and planning for a bright new future for this site and for all of Salem.
 
While Dominion’s announcement today will have impacts on Salem’s bottom line, it presents an interesting and challenging opportunity to re-use and redevelop this site. But, with only a three year window to plan for this site’s future development we must get to work immediately.''

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