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NJ company buys 60-year-old Salem power plant

Fri, 06/29/2012 - 4:13pm
JAY LINDSAY - Associated Press - Associated Press

A 60-year-old coal-fired power station in Salem that was headed for closure has been purchased by a New Jersey-based power company, which plans to replace it with a natural gas-fired plant.

Footprint Power LLC announced Friday that it had purchased the Salem Harbor Power Station from Dominion Energy Inc. Terms weren't disclosed.

The station, built in 1951, was long targeted as a polluter by environmentalists. But many Salem residents were loyal to the plant for the jobs and millions in tax revenue it provided. Last year, Dominion announced it would close the plant in 2014, citing the high costs of required environmental upgrades and of coal, compared with cheaper natural gas.

Footprint, based in Bridgewater, N.J., said its new plant will take up one-third of the 63-acre site, with the rest used for commercial and industrial development.

The project is Footprint's first.

In a statement, Footprint chief executive Peter Furniss said Salem has the needed infrastructure and residents who understand "the challenges and opportunities posed by the Salem Harbor site."

The current facility was a 745-megawatt coal- and oil-fired station, which was built in 1951 and could power 745,000 homes at its peak. The new plant won't be quite as large, less than 700 megawatts, and hopes to be operating by 2016, said Footprint spokeswoman Carole Brennan.

State Rep. Lori. Ehrlich, from Marblehead, which has a view of the plant across Salem Harbor, said there's no doubt the new plant would be cleaner than the "old coal clunker" it's replacing. "That's good," she said. "But it's too bad we're missing out on a once in a lifetime opportunity to transition to something besides burning fossil fuels."

Ehrlich also noted Footprint has applied to burn both natural gas and oil at the new plant, meaning dirtier oil could be used if natural gas price spike. Brennan said Footprint plans to burn only natural gas.

Salem has received a critical $4.75 million payment annually from Dominion. Brennan said Footprint anticipates paying Salem close to that much when its plant is up and running.

The Footprint announcement comes the week after the Massachusetts House of Representatives passed an energy bill, crafted in part by Salem Rep. John Keenan, which would require utilities to enter long-term contracts with new power facilities built on the former sites of coal- or oil-fired plants — just like the planned Footprint plant.

Footprint president Scott Silverstein said the company supports the bill, but the timing of its passage and the deal with Dominion was "coincidental."

That bill isn't law yet, and Ehrlich questioned whether it would have to pass for the Footprint to be viable. The new power may not be needed, she said, noting the regional grid operator was ready to move on without the Salem plant.

The company said the plant will not only reduce carbon emissions, but its ability to quickly start up and stop can help develop new renewable power, which needs that kind of readily available backup power, because the wind doesn't always blow and the sun sets.

Salem Mayor Kim Driscoll said, beside Footprint, there were no serious suitors for the site, which she said comes with up to $50 million to $75 million in cleanup costs. Now, she said, there's a chance to have a smaller, cleaner burning plant, continued payments to the city and roughly 40 acres for open space or development. The city, for instance, is hoping to draw a cruise line to a commercial pier that Dominion used.

"We were very concerned this plant would lay fallow and have a padlock on it and not be redeveloped at all," Driscoll said. "I think this is a very positive step for us."

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