We tried to find out as much as possible about the proposal to bring a new natural gas fired power plant to the property presently occupied by City Hall and the Public Works garage — What are the economic benefits of the project? Could anyone lose their property as a new natural gas pipeline is extended to the city? How will a new power plant affect property values in nearby neighborhoods? What is this company's track record in other communities, and what effect will it have on the environment? Are potentially lower energy prices and emissions here worth the negative impacts of natural gas extraction on the global environment and areas local to the hydraulic fracturing wells? Do we want to continue producing electricity with fossil fuels, or should we be moving toward renewable options instead?

Some questions remain unanswered, but the results of our research follow. The City Council plans to hold an informational forum on the project next week, Tuesday, May 26, at City Hall at 6 p.m.

The details

Rockland has entered into an option to purchase agreement with Energy Management Inc., allowing it to negotiate terms for the potential purchase of the city's Public Works and City Hall property. EMI proposes to build a natural gas fired power plant, Rockland Energy Center, LLC, on the site, bringing a natural gas pipeline to Rockland. Many residents spoke against the plan during public comment at a council meeting, followed by an even greater amount of support by phone, according to city officials.

"If the conversations I've had with community members and the flood of emails to the city manager and councilors after the April 29 vote against the option agreement are any indication, there is far more support within the community for the project than there is opposition," Community Development Director Audra Caler-Bell said.

Those opposed to the proposed plant raise concerns ranging from the risks of accidents associated with natural gas plants and pipelines to environmental impacts in the area as well as at the natural gas extraction sites. Debbie Atwell wrote to The Courier-Gazette, "I have been looking at the site and see it is surrounded by most of Rockland's elementary and middle school playing fields and also is framed by wetlands and a bird sanctuary. The CO2 they put into the air is considered a serious problem to air quality, but also gas fired power plants affect the habitat permanently through accidents."

Those who support the plant do so for the economic benefits the pipeline and the plant itself will bring to the region as well as for the offsets to the plant's emissions the steam it produces will provide.

Based on public feedback that the process was moving too quickly, EMI has opted not to immediately execute the option. Once it does, the city and the developer will have 180 days to negotiate terms of sale. If an agreement is not reached in that time, the buyer may terminate the agreement. The question of whether to sell according to the negotiated terms will be put to voters. Caler-Bell said the city is researching its city charter and state statute to determine whether that referendum would be advisory or binding.

The $160 million Rockland Energy Center would consist of a 74-79 megawatt power plant on a 2-1/2 acre area of the city's public works property at 9 Burrows Street.

It would feed into the Maine grid via the Park Street substation, 0.5 mile away. A document EMI provided the city states it would also offer steam for power to FMC Biopolymer and Dragon Cement, and could provide hot water to heat downtown Rockland buildings.

The project represents an 800 percent increase in demand for natural gas for the area, and as such the plant would be the anchor customer making it worthwhile for a gas company to build a new 25-mile lateral pipeline to Rockland. EMI is still in negotiations with a third party to build the line and the exact route is yet to be determined, but Caler-Bell said it would likely go from Windsor to Searsmont, then along Route 1 to Rockland. This would provide other businesses and residences with the option to make the switch to natural gas.

“Rockland was chosen because it is a great location to build lines out of,” Caler-Bell said. “And Rockland has a better industrial base than other Midcoast locations, to make other parts of the plan [steam power] viable.”

Energy Management Inc. is a Boston-based company that has developed six natural gas plants throughout New England since the 1980s, including a 265-megawatt facility in Rumford. It has since sold those plants to focus on renewables: biomass plants, solar and wind projects. EMI is the company behind Cape Wind, a proposed 130-turbine wind farm for Nantucket Sound.

Property taxes to be gained unknown

One economic benefit to the proposed Rockland Energy Center is the jobs the plant would provide. EMI told the city the facility would provide 12-15 jobs paying between $60,000 and $120,000.

The terms of the sale are being negotiated now. The property has been assessed at $1.55 million, and that was the original bid EMI offered. Because the city would have to relocate its operations, EMI has indicated will also pay relocation costs for the city hall and public works operations up front.

“The city was very clear and [EMI was] absolutely receptive to the fact that there can be no impact on the taxpayers from this move,” Caler-Bell said. “No part of relocation costs can be borne by Rockland taxpayers.”

Still under negotiation is what portion of relocation costs will be reimbursed through property tax credits. There are no similar facilities in the Midcoast, but the city is looking at a plant EMI developed in Dartmouth, Mass., similar in size, to help determine its value.

Until these variables are worked out, it will not be known how much the city will gain in property taxes on the plant.

In Rumford, the power plant brings in roughly $1 million to the town per year through a tax increment financing agreement. Town Manager John Madigan said the plant pays approximately $3.2 million in taxes. The city reimburses $2.2 million through the TIF and retains about $900,000. He said the TIF agreement was made when EMI still owned the plant before they sold it in 2000.

The plant was built at the end of an industrial park. “It hasn't generated a whole lot of discussion from anybody,” he said.

In Dartmouth, Mass. the power plant developed by EMI (and also sold in 2000) has been bringing in more money for the town than it would in property taxes. A payment in lieu of taxes agreement was made with EMI when the plant was built in the early 1990s. Town Administrator David Cressman said the agreement has been amended recently because of major changes in the past 20 years: the industry has been deregulated, the value of the energy has changed, and the plant is now operating as a peaker plant rather than generating energy on a regular basis. The last payment from the plant of $600,000 covered two fiscal years. Cressman said the plant has been paying more than it would be charged in property taxes for the six years he has been administrator.

Cressman said EMI also recently worked with the city to build a solar farm, which may be the largest in Massachusetts.

“EMI did a great job on that project and there were no resident complaints,” he said. “Overall working with EMI has been very good, and it has been a professional relationship.”

In Pawtucket, R.I. in 1993, while EMI still owned the plant it developed there, the company appealed a superior court decision denying the plant exemption from property taxes. The case went to the Rhode Island Supreme Court and EMI won. The town had to pay back the $182,000 the company had already paid of its $732,000 property tax bill. The exemption was based on FERC's definition of the plant as a manufacturer of steam and electricity, not an electric utility, and therefore, exempt from electric utility rate regulations.

In 2010, the Boston Globe reported that the Massachusetts Economic Assistance Coordinating Council approved a property tax abatement of $100 million to EMI for its proposed $426 million natural gas power plant, Pioneer Valley Energy Center, in Westfield, Mass. The state gave $320,000 in state tax credits, and Westfield offered the company a 15-year deal that cut the plant owner's local property taxes by more than half, a reduction with a net worth of $99.5 million, the Boston Globe reported.

"Even with the large tax incentive, Westfield will still come out ahead," Larry Smith, the city's director of community development told the Globe. "The city will net nearly $2.5 million in additional revenue per year, a substantial amount for a community its size. The site is currently empty and generates little tax revenue."

Good Jobs First, a subsidy tracking organization, lists the deal on its megadeal database as the largest tax credit ever awarded in Massachusetts.

City Advancement Officer Joe Mitchell said he finds it hard to believe that the tax credit was the highest awarded in Massachusetts. He said the city offers incentives to investors up front in order to stay competitive and attract businesses to the area, and the state offers additional incentives. “We want the plant here,” he said. “If it does come to fruition, it will create jobs, increase the tax rolls, and build schools and libraries with the taxes it will be paying down the road.”

Caler-Bell said the company is not trying to avoid taxes in Rockland. “They know to be accepted by the community they have to be contributing to the tax base,” she said.

Property values

Another question is how property values will be affected in the residential neighborhoods near the plant. A nationwide 2008 study by the University of Michigan found that compared to houses farther away, houses near natural gas power plants decreased in value 3-5% between 1990 and 2000.

Proponents say bringing natural gas to Rockland would encourage more development and give businesses and residences the option of converting from oil or propane to less expensive natural gas. A few local facilities that use the plant's steam would also benefit from lower energy costs. By stabilizing electricity supply to the state, the facility would reduce power outages and associated loss of productivity.

Others worry the pipeline will negatively affect property along its route. Faith Huntington, director of electricity and natural gas at Maine Public Utility Commission, said a natural gas utility can take land by eminent domain subject to PUC approval. Several studies have found that proximity to a natural gas pipeline does not correlate directly to lower property values, though the data are erratic.

How the facility will affect electricity rates depends on the relationship between the contract prices and the market value of the energy. “Typically, if a contract is approved by PUC, the electric utility (either CMP or Emera Maine) would purchase power from the facility and resell it in the wholesale market,” Huntington said. “If the contract prices are below market, ratepayers will receive that benefit. If the reverse is true, then ratepayers would pay that cost.”

Some plants built by EMI often sit idle. The plant in Rumford often does not produce electricity because it is subject to spikes in natural gas prices and shortages because of high demand elsewhere on its pipeline. EMI states in its proposal that facilities dependent on Trans Zone 6 and Algonquin pipelines are subject to New England Gas index price spikes, but that this will not be a problem for Rockland Energy Center because the company it is negotiating with will provide “100 percent firm pipeline capacity on Maritimes and Northeast Pipeline back through TransCanada to the Dawn.” The Dawn Hub is the second largest natural gas trading hub in North America and the largest in Canada with more than 157 billion cubic feet capacity. It does not experience price spikes of New England gas indexes.

Another question is what will happen if the plant must shut down. A search for EMI's cogeneration gas and steam plant in Pepperell, Mass. shows only an empty lot. Paula Terrasi, conservation administrator for the city, said the plant had to close when Pepperell Paper Mill, which purchased the power plant's steam, shut down. Without a steam buyer, the plant lost its status as a cogeneration facility and the electricity utility, National Grid, was no longer required to purchase electricity from the plant. That utility chose not to and the plant was left without any buyers. It was torn down in 2011 by the owner, Perry Videx, a company specializing in used process equipment. No cleanup costs were borne by the city, Terrasi said.

As EMI has shifted its focus to renewables, it may decide to sell, like it did its other gas plants. Caler-Bell said if EMI does decide to sell, she believes the sale would not adversely affect Rockland because the company would follow due diligence in the sale and because the industry is so heavily regulated.

However, she said she gets the impression EMI is committed long term, because of the conversations they are having about taxation structure and the company's willingness to work through complications. “They were very cognizant of the fact they have to be contributing to the tax base,” she said. “This was a challenging site because of the fact that city hall and public works were here and it was a big commitment for them to work with the city to try to find a solution to that. For a developer to take on that added layer of complication as well as their project really shows a commitment to the community.”

Caler-Bell said EMI has also indicated it would like to help with renewable energy projects in the city, and has been talking with the energy committee about potential solar projects.

Environmental impacts

The Rockland Energy Center would use highly efficient Jenbacher engines and EMI's fact sheet about the plant says it would exceed 60-percent efficiency.

Natural gas power plants are relatively clean facilities, with half the carbon dioxide emissions, one-third the nitrogen oxide emissions and only 1 percent the sulfur emissions of coal plants. According to EPA, the average emissions of gas fired plants are 1,135 pounds carbon dioxide, 0.1 pounds sulfur dioxide, and 1.7 pounds of nitrogen oxides per megawatt hour. EPA lists the emissions of sulfur and mercury of natural gas plants as “negligible.”

Some people have raised concerns about air quality impacts in the immediate area of the plant. Though the plant must demonstrate the air quality health standards will be met in the immediate area before a permit will be issued (see related article), some argue that the standards are not high enough.

Emissions from the Rockland Energy Center would be partially offset by the local industries using the plant's steam power instead of other fuels. The project would also make conversion to natural gas possible for residents and businesses that are currently using fuels like #2 heating oil or propane. Caler-Bell said the city is working with the developer to find out specifics of the proposed plant's emissions and what critical mass of natural gas conversions would make the project a net zero change in emissions. If more than that number convert, there will be a a net reduction in emissions for the region.

Historic violations at EMI's former plants show what kinds of things can go wrong at the Rockland Energy Center.

EPA lists the Pawtucket Power Associates power plant in Rhode Island as being in violation of the Clean Air Act from April 2012- September 2013, though whether this is a reporting violation or violations to its limits is uncertain. In 1993, the plant was fined $110,250 for faulty pollution control equipment and violations of its nitrogen oxide release limits.

The Dartmouth Power Associates facility was fined $6,325 in January 2015 by Mass. DEP for hazardous waste violations. This was a management issue and not related to the way the plant was built. Violations included storing waste oil on the site for more than 180 days, incorrectly labeling waste oil, not recording all weekly inspections of the waste area, and not keeping waste containers closed.

The Dartmouth facility was also fined $12,500 in February 2011 for Clean Air Act violations because it had failed a stack test and continued operating after doing so. The EPA website also lists a stack test failure for the pollutant nitrogen oxide in March 2011.

Tim Blanchard, environmental engineer at Mass. DEP, said in this instance, the plant operators may have been unaware of the initial stack failure. He said enforcement penalties range from a few thousand dollars for minor violations to hundreds of thousands of dollars for more serious ones, and that most plants do have some violations over their lifetime.

“EMI is typically very good. Even though [the Dartmouth Power Associates plant] was built in 1989, it is considered one of the newer facilities burning clean natural gas,” Blanchard said. "EMI has a good reputation for building nice, state-of-the-art natural gas power plants.”

Looked at on a broader scale, there are emissions associated with the extraction and transport of natural gas, which should also be considered, as well as other environmental impacts in the area of the extraction.

Some of the gas stored at the Dawn Hub where the Rockland Energy Center's gas will come from has been extracted in Pennsylvania and Texas by hydraulic fracturing, commonly known as fracking.

The Union of Concerned Scientists advocates for limiting the use of natural gas because while it is a cleaner burning fuel, drilling, extraction and transport results in the leakage of methane, a far more potent global warming gas than carbon dioxide, though with a lower half-life. The group cites a study which found that methane losses must be kept below 3.2 percent for natural gas power plants to have lower life cycle emissions than new coal plants over time frames of 20 years or fewer. While technologies are available to reduce methane leaks, the group says deploying them would require new policies and investments. Furthermore they say the drilling of wells has been found to cause erosion, fragment wildlife habitat, aquatic contamination from chemical spills or equipment runoff, and reduction of surface waters as a result of the lowering of groundwater levels. They warn that drinking water can become contaminated with naturally occurring radioactive materials, methane, volatile organic compounds and fracking fluids. The group also opposes the extraction of natural gas for the vast quantities of water required: 3-12 million gallons to initially fracture a well.

CNN reported this month a study found small earthquakes in Northern Texas to be most likely caused by fracking activities there.

The magazine Nature reported that in New York and Pennsylvania, some of fracking wastewater is treated in municipal sewage plants that weren’t designed to handle toxic and radioactive wastes, that "shale-gas development — which uses huge diesel pumps to inject the water — also creates local air pollution, often at dangerous levels.”

A Penn State geoscientist, Terry Engelder, countered in in a parallel article in Nature that though fracking uses a lot of water per well, it is using far fewer wells per unit area than in the past, giving the example of a 164-acre plot of land that had 100 wells in the 1950s but can be served today by one. He said in areas of abundant rainfall, such as Pennsylvania, the water usage is not an issue, and that there are regulations ensuring operators collect rainwater during the wet season for use during drier months. Regarding methane gas contaminating groundwater, he says it is not harmful and that it enters groundwater naturally.

"The groundwater above areas that host such conventional deposits naturally contains methane, thanks to natural hydraulic fracturing of the rock and the upward seeping of gas into the water table over long time periods,” Engelder said in the article.

He said many of the chemicals used in the fracking process are benign and found in common household products. A list of the chemicals used can be found at http://fracfocus.org/chemical-use.

Safety

A widely publicized natural gas plant explosion occurred during construction of the Kleen Energy facility in Middletown, Conn. in 2010. Six workers were killed and 50 were injured in the accident. A U.S. Chemical Safety and Hazard Investigation Board report states the accident was the result of a planned operation called a “gas blow” in which high pressure gas is forced through the pipes to clear out debris. The natural gas and debris is subsequently released into the atmosphere. “The gas blows themselves could have been self-igniting due to expelled debris creating a spark or through static accumulation,” the report states. There were also numerous ignition sources in the facility. The practice of using gas to clear pipes has since been prohibited, and EMI states in a fact sheet about the REC that it would use compressed air.

Another explosion occurred in 2014 in Plymouth, Wash., caused by a pipe exploding debris into a liquid gas tank. NBC reported that all employees were evacuated and one had non-life-threatening injuries.

NaturalGasWatch.org tracks natural gas explosions, many of which occur in homes that use the fuel for heat.

Though safer than transporting hazardous materials on trucks or trains, pipelines also have associated risks to public safety. Over the past 20 years, the pipeline and hazardous materials safety administration reports nearly 900 serious incidents in the U.S. involving fatalities or injuries requiring hospitalization. The trend has been decreasing with a three year average of 27 incidents per year since 2012, including 13 fatalities and 65 injuries. Causes of these incidents range from corrosion, excavation damage, incorrect operation, equipment failure, and damage by natural or other outside forces. Two are listed for Maine: one in 2003, caused by earth movement resulting in $247,000 of property damage; and another in 2007 was caused by excavation and resulted in $217,000 of property damage. Neither caused any fatalities or injuries.

At a compressor station for the Maritimes and Northeast Pipeline in Searsmont just before midnight on Dec. 31, 2014, a valve failure resulted in 70,098 cubic feet of natural gas spewing from the pipe. The sound frightened residents. Spectra Energy, which owns the station, explained that venting the pipe is a safety measure in the event of an emergency, and residents were not in any danger. In this case the damage was caused by natural force: ice was blocking a vent from closing.

Transparency/ Community involvement

One of the concerns raised by the public was about the secrecy and speed with which the city entered the option to buy, a contract between a potential buyer and seller in which the buyer makes payments to the seller to negotiate exclusively with them. City officials explained during an interview on VStv that the developer had been solicited by the governor's office to submit a proposal to PUC for a long term capacity contract by a May 1 deadline. EMI contacted the city April 9.

“We did everything we normally do, above and beyond,” said Caler-Bell. “We listed it with all real estate brokers and all local media outlets. It was a fairly quick process, but we made sure it was as open as possible to people who were interested.”

The only secrecy was around who the developer was and the nature of the proposed project. Caler-Bell explained this was to prevent any of EMI's competitors, such as other energy companies who had submitted proposals to PUC, from submitting bids for the sole purpose of binding up the process for EMI.

EMI decided not to submit a proposal to PUC after all, as it goes through the negotiating process with the city and provides information to the community. PUC staff says similar RFPs are typically opened annually.

Caler-Bell said the process is like an audition for other development. “The way the community handles the controversy and their receptiveness to being open minded and hearing all the facts about a project before they make a decision is very important. It does set the tone for any other development that comes to the city,” she said, adding that at this point the city is looking for more data on environmental and economic impacts relating to Rockland and the region as a whole.

It is now up to the city and the developer to provide the community with the facts so it can make a reasoned decision.

A public information session will be held Tuesday, May 26 at Rockland City Hall at 6 p.m.

This story has been updated to correct the position of the Union of Concerned Scientists on the use of natural gas. They do not oppose its use, but advocate limiting its use.

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