The following piece appeared in the Daily Hampshire Gazette(www.gazettenet.com) and the Recorder(www.recorder.com) in the first week of January 2016.

CASHING IN ON A CASH COW

Copyright © 2015 by Karl Meyer

Ever dreamed of owning your own bank? I got a deal for you! Northfield Mountain Pumped Storage Project is for sale again, along with the Turners Falls canal and dam—and a string of little assets down in Connecticut. But Northfield’s the cash cow. Fourth time in a decade they’re unloading this golden calf–always at a tidy chunk of change. A quickie corporate win-win! It’s really like an A.T.M., run at the expense of the Connecticut River ecosystem.

Place works like a giant toilet–suck huge amounts of the river backward and uphill, then flush it all back and—viola, money spews out the other end. Could be ours! They’re holding bidder tours as we speak. I just need a few partners with ready credit. We go in on short-money and cash-in on the no-brainer electricity “spot market” for a few years. Then, with inflated power-price futures in play, we offload this puppy for a final cash-out of 30%–maybe 50%!

Here’s how it goes down. With the cheerleading of Northfield’s not-so-silent partner, ISO New England–the “independent” system operator (created by the Federal Energy Regulatory Commission), we simply slow dance this darlin’ past the banks, the FTC and FERC. Then, in 2016, its sweet business-as-usual—maybe with new shirts for employees.

Trust me, this works every time. Everyone walks away with full pockets—without the public knowing what hit them. Northfield got wholesaled in 2006 by Northeast Generations Services(formerly WMECO—formerly of Northeast Utilities, now Eversource—you follow?) They grabbed a quick $1.34 billion for the package, slipping it to a trio of Jersey venture capitalists, Energy Capital Partners. ECP renamed their little project FirstLight Energy. Those smartest-guys-in-the-room hung-in and grabbed Northfield’s peaking spot-market profits for two years, before off-loading it for a nifty $1.89 billion in that crazy year, 2008.

With that, GDF-Suez, third owner in four years, swept in–the world’s largest private energy corporation, based in France. They’ve been gobbling up contracts to run water systems across the US under the name Suez United Water. But GDF-Suez recently did a clever name-change to Engie, keeping the public totally confused. They got game! The true costs of these premium-priced plant sales get buried in the list of acronyms on electric bills. It’s like owning a 25-mile stretch the Connecticut River to dip into for cash any time you please.

This is a turn-key operation–with us, the new guys, pushing the buttons. The joke is that the public thinks Northfield is a hydropower operation, while this baby has never produced a single watt of its own energy. It’s imported!–huge swatches of bulk electricity now run-in from outside the region to suck a mountain’s worth of flow from the Connecticut up to a reservoir. Then, dump it out on the power lines when prices peak. It’s hugely inefficient, now largely carbon-based—and massively damaging to the river. But amazingly profitable!

That’s where we come in. Sure it was built as a sister to the region’s nukes to gobble up their monstrous stream of unused electricity–because nukes can’t shut down their feverish output at night. That’s how you get to put in a giant straw and suck the Connecticut uphill at a rate of 15,000 cubic feet per second–more than enough to pull the river backward for a mile downstream under low flow conditions. But who’s watching? When the region’s last nuke shut down, nobody said ‘boo!’ with Northfield going fossil. What climate change?

And when it became clear years back that Northfield operations were imperiling spawning success for the federally-endangered shortnose sturgeon at the Rock Dam in Turners Falls–their singular natural spawning site going back into pre-history, again, nobody came forward. Not the US Fish & Wildlife Service, the National Marine Fisheries Service or the MA Division of Fish & Wildlife—or any river protection group. No bureaucrats, no suits–nobody. At Turners Falls—instead of 70% of migratory fish heading upstream toward Vermont and New Hampshire, they squeeze out 4%. We have it made!

Still skeptical? ISO and FERC are addicted to Northfield—even though its power-flush characteristics might come into play maybe a handful of times a year, if at all. For this they let owners cash in on the river whenever y they want. In 2012, the owners of this “asset” collection of 1500 megawatts(of which over 1100 MW derived from Northfield alone) told investors a full 40% of their profits were realized from “Capacity Fees.” What that means is you get paid for holding back the Connecticut! They’re not required to use it at all if they don’t want to—just flush when prices are high. Paid for being you! Of course another 50% of profit comes from generating, though the public doesn’t know it only operates a few hours a day when prices are highest.

Here’s the kicker: in 2014, after a cry-wolf energy deficit winter that never materialized, FERC–with ISO as cheerleader, sanctioned the doubling of those “capacity fees”. Plants are now collecting 2X the amount they were two years back, for having the potential to dump some power on the lines—not for actually generating. Paid for being you! With 1100 potential megawatts at Northfield, how quick can you say “windfall at the public’s expense?” Lastly, Northfield petitioned FERC the last two winters to increase its reservoir storage by a full 25%, with ISO their biggest cheerleader. FERC agreed, twice. Double-dip with a cherry, anyone?

This thing’s a cinch! Even with all the nukes shut—when this should have been moth-balled to emergency use as more climate-warming, spent nuclear junk, it soldiers on as a virtual river monopoly with the blessings of FERC and ISO. Trust me, no one goes to court. Ecosystem damage, costs to the public? Fuggetaboutit!

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