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The impact of aging coal plants shutting down

Sarah Gardner Aug 2, 2011

The impact of aging coal plants shutting down

Sarah Gardner Aug 2, 2011

Kai Ryssdal: On the theory that we all want cleaner air, we can take heart from the words of Energy Secretary Steven Chu earlier this year. There’s going to be, the secretary said, a massive shutdown of coal-fired power plants in this country over the next eight years.

There are two things at work there, mainly. New pollution regulations and a turn toward cleaner energy. And it means some of the country’s oldest, dirtiest power plants aren’t long for this world. Which is great — until it’s your power plant.

From the Marketplace Sustainability Desk, Sarah Gardner has the story.

Sarah Gardner: More than three centuries have passed since the Salem Witch trials. But this little city on Boston’s north shore is still capitalizing on that cursed chapter of American history.

Announcer: To the good folk of Salem in 1692 the devil and witchcraft were realities. They could hear him in the howling of wolves, in the creaking of an old house on a winter’s night.

Witch museums, souvenir broomsticks, psychics — they all keep Salem’s kitschy tourism economy burning. But it’s the town’s aging coal-fired power plant that’s really helped fuel the “Witch City’s” budget. For six decades.

Michael Harrington’s father was mayor when the Salem Harbor Power Plant was built in the early ’50s. It took out his favorite baseball field. But Harrington says the soot-spewing utility gave plenty back in property taxes.

Michael Harrington: More than sufficient to pay the entire educational costs of Salem for probably the better part of the next generation.

The power plant is still the city’s biggest taxpayer, by far. But the coal plant’s current owner, Dominion, plans on shutting it down in two years. Over the next decade dozens of aging coal plants just like it are slated to close around the country. The trend leaves host cities like Salem with cleaner air, but a hole in their budgets.

Already Salem Mayor Kim Driscoll is wondering where they’re going to get the nearly $5 million a year Dominion pays in property taxes.

Kim Driscoll: It’s a huge hit to your commercial tax base and it could have an impact on property taxes.

Gardner: So if that $4.75 million were to go away tomorrow, you’d be in trouble.

Driscoll: Absolutely. We still have the same number of police calls, the same number of parks to keep clean and roads to plow, but we wouldn’t have a big revenue source coming in.

Not to mention the kind of philanthropy big companies like Dominion do in small towns like Salem. State Rep. John Keenan can tick them off, starting with the $1 million Dominion donated to the schools just this year.

John Keenan: Whether it’s the fireworks here in Salem where they’re a lead sponsor, the Salem Education Foundation they’re a lead sponsor, Boys and Girls Club, Salem Y, you name it.

All this from an ugly, dirty coal plant that, frankly, mars the picturesque Atlantic coastline around Salem Harbor. Even residents who live right near the plant seem to have a soft spot for it.

Jack Snow: I always thought they were a pretty good neighbor.

Former fisherman Jack Snow’s attitude toward the coal plant is fairly common among residents here. They put up with it because it helped reduce their property taxes and created good-paying jobs. Snows says when he was a teenager in the ’60s, the coal plant hired him and his buddies to shovel coal onto huge conveyer belts.

Snow: It was a dirty, nasty, dusty, noisy, just horrible job. But it paid really well. And when you were like 15 or 16 years old, at that time, I mean the average wage that the guys were making in factories was about two bucks an hour. And they were throwing you $12 to sit there with a shovel.

Jane Bright leads a local health group that’s been fighting it for years. From a small island near the plant, she looks out toward Marblehead, a wealthier community that will no doubt be glad to see the plant go.

Jane Bright: This is one of something on the order of 300 coal plants in the country so we have a long way to go as a nation but yes, we’ll be pleased to see this get out of our lungs and get out of our lives.

A lot of people in town hope the plant will be torn down to make way for a new waterfront development that will add to Salem’s tourist economy. There’s talk of wind turbines, a cruise ship terminal, new restaurants and shops, or condos. Maybe even conversion to a natural gas plant, if Dominion can find a buyer.

But Mayor Kim Driscoll says the coal plant won’t be replaced overnight. That’s why local politicians are lobbying for state funds to fill the gap until Salem can replace the taxes the plant now pays. If they can find a replacement in this economy.

Driscoll: Most of the plants or any similar type of industrial properties that have been redeveloped have taken decades. And have cost hundreds of millions of dollars. So, we’re very concerned that nothing happens on the site. That’s the worst possible scenario.

And the kind of economic curse America’s “Witch City” wants to avoid.

In Salem, Mass., I’m Sarah Gardner for Marketplace.

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