A House Chairman and a Senate Leader Give a Lesson in Legislating with Section 42

Thursday, August 2, 2012

If voters in every corner of Massachusetts somehow came to study what Salem’s Representative John Keenan accomplished with Section 42 of the big energy bill enacted this week, they’d soon be asking, “Where can I get me a legislator like that?”

With a major assist from Senate Majority Leader Fred Berry, unquestionably the most beloved member of the legislature, Keenan pulled off a major coup for Salem in the final wording of this key section of An Act Relative to Competitively Priced Electricity in the Commonwealth.

First, the section guaranteed the flow of millions of extra state dollars to the Salem treasury each year through 2019 to make up for lost property tax revenue from the soon-to-be-closed Salem Harbor Station generating plant. 

Secondly, it committed the state to figuring out how to clean up the Salem Harbor Station, which has been burning coal to make electricity for over 50 years, and to devising a way to pay for that clean-up.  One recent study indicated that such a project could cost as much as $85 million, but some industry observers believe it can be cleaned and made safe for much less.

The Salem News called the Section 42 deal crafted by Keenan and blessed by Berry “unprecedented,” which it clearly was.   The newspaper quoted the state’s Energy and Environment Secretary, Rick Sullivan, as saying he was “not aware of this level of state involvement on the part of one (generating) facility” before this time.

Section 42 calls for Sullivan to lead an 11-member task force that must look at options for the “full financing” of the dismantling of the power station and the clean-up of the site.  It requires the task force to begin work by September 15 and to issue a final report by June, 2013.

“I’ve had a number of discussions with Rep. Keenan, Senator Berry and Mayor (Kimberly) Driscoll, and I’ve assured them that I will not only be the chair, but I will be a very active chair,” Sullivan promised the Salem News on July 31, the last day of the 2011-12 legislative session.  

Salem Harbor Station presented the City of Salem with two mammoth challenges: how to deal with the loss of a major property taxpayer, and how to redevelop a contaminated site in an acceptable manner that would yield optimal revenue to the city going forward.

Section 42 addresses both, first by directing an estimated $3 million in state proceeds from the Regional Greenhouse Gas Initiative annually to the city, and secondly by serving the site up in an attractive condition to a New Jersey-based company, Footprint Power, which has an agreement to purchase it from the current owner, Dominion Energy of Virginia.

Footprint plans to build a new, cleaner-burning, natural gas-fired power plant on about a third of the site, and to free up the remainder for other harbor-related commercial and recreational uses.  So Salem will eventually have a new power plant there paying megabucks in property taxes, plus some altogether new revenue-producing enterprises that will open up harbor real estate now dominated by an old, coal-smoke-belching power plant.

How did Keenan pull it off?

When mulling that question, give a thought to what Napoleon once said -- “Fortune favors the brave” – and you’ll be on the right track.

Keenan’s Section 42 victory can be attributed to a combination of long-term planning, audacious positioning, and fortitude under fire.

Under long-term planning, consider that Keenan, a former Harvard football player and Salem city solicitor now serving his fourth term in the House, shrewdly worked to get himself appointed House chair of the legislature’s Joint Committee on Telecommunications, Utilities and Energy, knowing  Salem Harbor Station was coming to the end of its useful life and would have to be retired and replaced during his watch.  As a lead voice on energy matters, Keenan knew his local energy agenda could not be ignored or discounted on Beacon Hill.

Under audacious positioning, consider how Keenan began his offensive with a Section 42 text that basically asked for the moon.  It would have compelled power distribution companies to purchase electricity for at least 15 years from gas-fired plants that had replaced coal-burning plants.  (The text never mentioned Salem Harbor Station by name, but there are only three coal-burning plants left in the state and Salem’s is the only one approaching closure.)  Section 42 in its original form would have given redevelopers like Footprint a legal financial advantage in the energy marketplace for years to come, a game-changer that respected industry leaders like the New England Power Generators Association (NEPGA) flatly said would “destroy” the Massachusetts marketplace.

Under fortitude under fire, consider Keenan’s poise and good cheer as everyone from NEPGA to the Attorney General to the Governor to the Senate President dismissed Section 42’s mandated power buys as bad policy and risky precedent.

When questioned by the media, Keenan freely admitted to using his powerful committee chairmanship to advance the interests of his constituents, and to readily crossing accepted policy bounds as he did so.  He even said he sought the energy chairmanship expressly to be in a position to help his hometown solve the looming crisis of a shuttered Salem Harbor Station. 

Nothing takes the wind out of journalistic sails like saying, “Yes, of course I did it.  So?”     

As the opposition to Section 42 spread and solidified, Keenan bided his time and put the finishing touches on his next move, the fallback he no doubt had in mind from the beginning:  a totally revised section that committed the state to supplementation of the city budget for the foreseeable future and to the leadership of the crucial site clean-up effort.

These twin commitments were offered up during the final hours of the session, when the pressure was mounting in the legislature to get the energy bill done, so they had the appearance of a reasonable compromise needed to put the bill over the top when in fact they were precedents, historical precedents.  Remember Secretary Sullivan’s words. 

Keenan’s new and improved Section 42 will not destroy the state’s energy marketplace, but it does kind of take your breath away.

Well – gasp – done – gasp, Mr. Chairman.

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