February 17, 2013

Is it time to unplug Wyman Station?

Yarmouth officials begin thinking about the future of the plant site

By Tux Turkel tturkel@pressherald.com
Staff Writer

People who live and work around Casco Bay noticed an unusual sight during the week of Jan. 21: Smoke was rising from the 421-foot stack of Maine's largest power plant, Wyman Station in Yarmouth.

click image to enlarge

The Wyman Station power plant on Cousins Island in Yarmouth can pump out enough energy to power 893,000 homes.

Gabe Souza/Staff Photographer

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It's a sight they may not see many more times.

Because it burns costly oil, Wyman has been largely an on-call plant for years, fired up only when another big plant goes offline, or when very hot or very cold weather spikes the region's demand for energy.

Now a combination of factors -- including rising fuel costs, ownership moves and pending changes in rate structures -- has created a scenario that seems to put the plant on the brink of obsolescence.

No one is yet saying that Wyman is headed for a permanent shutdown. But the possibility is real enough that officials in Yarmouth are beginning to think about what might become of the 128-acre waterfront parcel where the plant is located -- and how to respond to the loss of $2 million in annual revenue from a 56-year-old facility that is still the town's largest property taxpayer.

"We want to talk about the tax base, but also, how do you leave this community?" said Town Manager Nat Tupper. "We don't want to be left with a chain-link fence and no one around."

Wyman can pump out enough energy to power 893,000 homes, and the plant was proving its value during the week of Jan. 21.

It was cold and power demand soared, making wholesale electricity expensive. That was an opportunity for Wyman and its lead owner, Florida-based NextEra Energy Resources.

Based on prices recorded by ISO New England, the region's grid operator, NextEra could have taken in roughly $1 million in energy payments if it ran Wyman at full capacity for 12 hours, less fuel and labor costs.

That revenue would be on top of monthly payments NextEra gets for keeping the plant on standby.

QUESTIONS RAISED

This formula has been a winning one for NextEra, but three recent development raise questions about the future:

In late December, NextEra announced it was selling 19 hydroelectric dams in Maine to a Canadian company. As a result, Wyman and a small, oil-fired generator in South Portland called Cape Station, which is operated remotely from Yarmouth, are now the only oil-fired plants in NextEra's national portfolio, which heavily favors renewable resources such as wind and solar power.

Roughly 45 percent of the region's electricity now comes from natural gas units. Gas is so much cheaper, compared to oil, that New England's wholesale cost of power fell 23 percent last year, to its lowest level since 2003. This has made oil-fired plants uncompetitive most of the time.

Wyman Station may become even less able to compete in the coming years. There's an energy surplus in New England, which is driving down prices at the annual auction where ISO-New England contracts for power. The grid operators say they're going to eliminate a price floor that has been in effect for some time at next year's auction. If prices drop too low, Wyman simply won't be able to make a profit -- even as a backup source during extreme weather.

That's a worry for ISO-New England, because the region has become dependent on natural gas, and the network of supply pipelines hasn't caught up with the demand for heat and power. On the coldest days, some gas-fired plants struggle to get enough fuel.

Meanwhile, New England's fleet of oil-fired units is aging. Most are at least 30 years old. Oil plants account for only 1 percent of New England's generation these days, but they represent 20 percent of the region's capacity. During periods of peak demand, like last month's arctic blast, plants such as Wyman Station remain critical to a reliable electric system.

(Continued on page 2)

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