Tuesday, June 30, 2009

Industry Along the Piscataqua River - National Gypsum

National Gypsum Company (NGC) is the focus for today's post on Industry along the Piscataqua River.  NGC operates a gypsum wallboard manufacturing plant at 9 Michael J. Succi Drive in Portsmouth, NH.  The plant is one of two wallboard production plants on the banks of the Piscataqua.  It's been in operation since the early 1970s and underwent a major update in 1985.

The Google map below shows a bird's eye view of the Portsmouth plant.  You can clearly see the outline of the  long straight-line wallboard production process on the upper right of the map.  The National Gypsum website features a cool animation of the wallboard production process that somewhat explains why wallboard plants are laid out this way.

View Larger Map

Click here for a better bird's eye view from maps.bing.com

NGC is a privately held company headquartered in Charlotte, North Carolina.  According to the company's website, they operate several facilities spread across the US and in Canada including 17 wallboard plants,  7 mines and quarries, 7 interior finishing products plants, 3 paper plants, and 2 research facilities.   They employ  around 3,000 people and their annual revenues are estimated to be between $350 million and $500 million.  NGC also operates the largest gypsum quarry in the world, located outside Halifax, Nova Scotia.

Gypsum wallboard plants are often located near shipping terminals to facilitate efficient delivery of the bulky gypsum rock that they use as a raw material.  In addition, wallboard manufacturing plants require large amounts of energy to run kilns, rock dryers, rock crushers, and other equipment.  I stumbled on this 2004 NH DES permit report on the plant and was surprised to learn just how energy intensive wallboard manufacturing is.  Apparently, the NGC plant burns large amounts of fossil fuels in the production process and as with power plants, the facility's emissions are carefully monitored by state officials.

View of the National Gypsum wallboard facility from the Piscataqua River

The city of Portsmouth tax assessor's website shows the facility's assessment at $8.7 million with a $147,697 property tax bill for 2008.  According to nh.gov employment data, the Portsmouth, NH plant employs between 50 and 99 full-time workers.


Monday, June 29, 2009

Industry Along the Piscataqua River - Introduction

Image courtesy of the Norman B. Leventhal Map Center at the Boston Public Library

The Piscataqua River,  located at the maritime border between New Hampshire and Maine, has been a focus for economic activity in New England since the earliest recorded human history in the area.  The river was used for centuries by the Abenaki people as a trade and migration route and later became a central transportation corridor for European settlers. 

The salt marshes along the banks of the river, and in Great Bay,  provided a familiar building material for early settlers and an important food source for their livestock.  In addition, the Piscataqua region's river system reached deep into New Hampshire, allowing easier transportation of New England's giant White Pine trees, which were sent to England and made into ship masts and bowsprits.  The tidal river also provided power for colonial saw mills that converted raw trees into lumber for use at home and for export.  The deep waters of the Piscataqua also supported a vibrant shipbuilding industry.

Today,  the Piscataqua continues to be an essential source of economic vitality for the region.  The river, along with the deep-water Portsmouth Harbor, is a strategic transportation resource for northern New England, carrying shipments of oil, gas, coal, chemicals, and minerals from near and distant ports.  The industries along the river are also an important source of employment in the region.

Below is a listing of some of the businesses and industrial sites located on the banks of the Piscataqua River in Kittery, Portsmouth, and Newington.  I'll provide more details on these in future posts.

Site/Business Name

Portsmouth Naval Shipyard
Maintenance and repair of nuclear submarines and other vessels

NH State Pier
General shipping, container service, and warehousing

Granite State Minerals Inc.
Distributor of road salt and other bulk materials

National Gypsum
Gypsum wallboard manufacturing

Boise Cascade
Regional distribution center for building materials

Irving Oil Terminal
Energy products storage and distribution facility

Schiller Station
170 megawatt coal and biomass power plant

Newington Station
400 megawatt oil and natural gas power plant

Tyco Undersea Cable
Undersea communications cable manufacturing

Little Bay Lobster Company
Harvester and distributor of North Atlantic lobster

Georgia Pacific Gypsum
Gypsum wallboard manufacturing

Westinghouse Electric Inc.
Nuclear power plant components manufacturing

Newington Energy Facility
600 megawatt natural gas and oil fired power plant

Sprague Energy
Energy and chemical products storage and distribution facility

Finally, the map below shows the locations of the marine terminals on Portsmouth Harbor and along the Piscataqua.  A few of the sites listed above are not show on the map below because they do not have a marine terminal.

Thursday, June 25, 2009

Electricity in New Hampshire - Cap and Trade update

Ok.  Now that I've done a quick primer on what cap-and-trade is all about, I'll dig into the latest news out of Washington on the Waxman-Markey energy and climate bill.  The bill is a cap-and-trade carbon emissions bill modeled after similar legislation enacted in Europe. 

Recently, the Congressional Budget Office (CBO) released a report about the expected costs to the average family of the proposed legislation.   As it happens, the results of the study are less interesting to me than one of the inputs to the study.  The main input that surprised me was the CBO's estimate of  the cost of a 2020 permit to release a ton of carbon emissions.  Their models have it priced at $28.  That's obviously a big difference from the near term $3.23 per ton pricing we're seeing for the Regional Greenhouse Gas Initiative (RGGI) auctions.  It makes some sense of course, because the number of carbon allowances is expected to decline over time.  But even though I've seen estimates as high as $10-15, I hadn't seen a credible source such as the CBO publish a number so high.  To make matters worse, the CBO is projecting emissions allowances will cost even more in the years following 2020.

The impacts of new carbon legislation are likely to be felt most from PSNH's Merrimack Station and similar coal fired power plants.  As I've posted before, the 496MW Merrimack Station is an important part of PSNH's power generation portfolio.  It's also one of the largest sources of carbon emissions in the state.  The plant generates around 3 million megawatt hours of power and emits about 3.5 million tons of carbon each year.  For comparison, a natural gas plant would emit just over half as much carbon to produce the same amount of power.

When the results of the latest RGGI auction came in at $3.23 per ton of carbon emissions, things looked relatively good for Merrimack Station w.r.t. emissions costs.  $3.23 per ton times 3.5 million tons results in an $11 million annual emissions cost.  Nothing to sneeze at, but pretty manageable when you consider that by using coal instead of gas or oil, the plant is probably saving us $100-$250 million per year on fuel.

However, if you assume something like the CBO's estimate of $28 per ton, the economics of coal become tenuous really fast.  $28 per ton times 3.5 million tons leaves us with a $98 million annual carbon bill for the plant.   When you add in the $457 million capital cost for the mercury and sulfur scrubber (spread over 15+ years), plus the $10+ million per year it will cost to run the scrubber, coal could become the most expensive fuel for making electricity, rather than the least expensive.

Fortunately, that's the worst case scenario and likely wouldn't kick in until after Merrimack is retired.  Currently for 2020, the proposed legislation calls for giving away credits to cover as much as 83% of power plant emissions at no cost.  That would cut the $98 million in carbon cost down to under $20 million for 2020.  In addition, further offsets may be available from investments in renewal energy sources.  

An important point to consider is that the carbon allowance allocations are based on the current emissions from electricity production.  If PSNH were to retire Merrimack Station in 5 years, they would still get the $80 million worth of free allowances for 2020 (and other years).  In that case, they could buy electricity from other sources and sell the $80 million in carbon allowances to offset the cost.   Regardless of how you slice it, this bill could significantly increase opportunity cost of making coal-based electricity.

It's early in the process, and I don't mean to sound alarmist, but IMO, the CBO carbon allowance estimate should be a wake up call for us here in NH.  Although there's major uncertainty as to what the final bill will look like, or even if a bill will pass at all, the cost estimates of carbon emissions are pretty staggering and are sure to reignite the debate about the economics of the scrubber project and what our power generation portfolio should look like over the next 10-20 years.

Personally, I'm still uncertain about the scrubber.  The economics of the project depend on several unknowable things.  Legislative actions or market pricing for coal and gas could easily change the math at the drop of a hat.  To be sure,  having coal in our energy mix does provide a hedge against possible oil and gas price hikes, but the cost of the hedge is now less certain.  Anyone who claims this is a slam dunk one way or another has a really good crystal ball.  OTOH, if $28 per ton is even in the ballpark of the cost of the damage that a ton of carbon is doing to our health and to the environment, then electricity from Merrimack Station may not be such a great deal for us after all.   

I'll sure be following this debate on the edge of my seat, doing my best to understand the tough and complicated issues and hoping our leaders can call it right.

(Update: Many reports on the bill mention that 35% of the allowances will go to the electricity sector, yet I posted that the free allowances could  cover up to 83% of electricity related emissions.  The explanation is that the 35% of allowances going to the power sector will cover 90% of power generation related emissions.  In other words, the electricity sector accounts for just over 35% of total carbon emissions.)


Electricity in New Hampshire - Cap and Trade Overview

There's been some discussion on cap-and-trade legislation out of Washington lately, and this could have an important impact on electricity rates in NH and on how we generate power in the next 10-20 years.  I'm starting with a quick and very simplistic primer on what a cap-and-trade system is.  If you already know what it is, you can skip this post.

New Hampshire in general, and PSNH in particular, is highly dependent on fossil fuels to provide the electricity we need to run our industry and to keep our homes comfortable.  Unfortunately, while burning fossil fuels can be a great way to produce low-cost electricity, doing so emits pollutants that can be harmful to our health and to the environment. 

Economics has a term for situations when the parties engaging in a transaction don't bear the full costs of the transaction.  These transactions are said to have "externalities." In the case of power plants using  fossil fuels, the costs of the pollution that's emitted  aren't paid by either the power producers or the power consumers.  Because someone else pays the bill (the folks down wind in the next state), the producers and consumers don't have any incentive to limit the pollution or find a better way to make power.  It's as though I had the right to dump my trash in my neighbor's back yard.

When externalities exist, usually government regulation can be used to fix an otherwise broken market system.  The idea is that regulations could be made so polluters pay for the damage that their pollution causes.  In a perfect world, those payments would go to the folks injured by the pollution in the downwind states.  It makes a ton of sense at a high level, but of course, the devil's in the implementation.

Imagine a world where we knew, down to the penny, how much damage 1 ton of CO2 emissions would do to our health and to the environment.  In that case, we could just introduce a carbon emissions tax that charges polluters that exact amount for each ton of CO2 that they emit.  Sounds simple right?  The problem is we don't know how much the damage from a ton of emissions costs, and even if we did, changing the system overnight to price in that damage would cause a big shock and could have a devastating impact on our economy.

Instead, legislators in Washington are working on a system called cap-and-trade.  Under this system, rights to emit carbon are created by the government, almost like dollar bills.  Each year, the government would print a certain number of emissions permits, and then somehow distribute them, probably by selling them.  Everyone who wants to emit a ton of carbon has to get one of these permits.   So just like an eBay auction, polluters bid on the carbon permits.  Since there's a limited supply of permits, some polluters may not get one, and will have to find another way to run their business without emitting carbon.   In the real system, permits are sold years in advance so polluters can have time to either buy a permit or clean up their emissions.  Also,  the permit buyers might not be polluters at all.  They could be speculators thinking that the price of the permit will go up as  the year it "matures" approaches.  They're hoping to sell their permit to some hapless power plant owner that didn't plan ahead.

Anyhow, the idea is that companies will change how they do business and pollute less (by installing scrubbers, etc) because if they don't, they'll have to pay for their pollution.  They could either spend the money on a permit, or on a scrubber.  If the scrubber costs less, they'll do that.  In some situations it may be economically optimal for some firms to continue polluting, but at least they'll be paying the full cost for the right.  It might turn out that once the costs of pollution are factored in, some businesses will raise prices, or even go out of business.  It sounds harsh, but the idea is to make markets work by including all the costs of production, even pollution, into the pricing of products and services.

Wednesday, June 24, 2009

MVP Series - Concord, NH Edition #1

What are the Most Valuable Properties in the cities and towns near you?

Just like in Manchester, the property with the highest assessed value in the city of Concord, NH is a shopping center.  The Steeplegate Mall, at 270 Loudon Road in Concord, is assessed at over $83.5 million and paid over $1.7 million in property taxes in 2008, making it the most valuable property in Concord.

Also on the 2008 list of top taxpayers in Concord are Wheelabrator Concord, a trash to energy facility, Unitil, an electric utility, and Capital Region Healthcare, the parent company of Concord Hospital.

Google Map satellite view of Steeplegate Mall Property
View Larger Map

Here are some quick facts about the Steeplegate Mall
> Type: single level enclosed regional center
> Opened in 1990, renovated in 2001
> 470,000 sq ft of gross leasable area
> 80 stores 
> 2,500 parking spaces
> Anchor tenants: The Bon-Ton (& Home Store), JCPenney, Sears, Old Navy
You may recall from my earlier post that the Mall of New Hampshire in Manchester is owned by Simon Properties and was recently able to close on a new mortgage on the property at a pretty attractive interest rate.  The owner of the Steeplegate Mall, General Growth Properties (GGP),  has not been so fortunate.  

In fact, in April of this year, GGP filed the largest real-estate bankruptcy in U.S. history.  It was initially reported that the bankruptcy would not affect the individual properties owned by GGP.  However recently,  some legal maneuvering by GGP surfaced that could result in the cash flows from the Steeplegate Mall being used to help restructure the parent company, rather than keep the property's own debts current.


Monday, June 22, 2009

Electricity in NH - Merrimack Scrubber (addendum)

In my earlier post about the Merrimack Station scrubber project, I mentioned that PSNH generally runs Merrimack at full capacity, since at any given time it can usually produce power for less cost than the other options.

I meant to include a neat graphic from PSNH's 2007 Least Cost Integrated Resources Plan that drives home the economics of electricity production, especially for PSNH, and helps explain why PSNH feels that Merrimack Station is too important to shut down.  

The graphic above shows how PSNH satisfies demand for electricity during a typical summer day.  MK1 and MK2 are the two coal units at Merrimack Station.  You can learn more about Newington and Schiller from this earlier post.  Next, VTY  stands for the Vermont Yankee Nuclear plant, which PSNH has a 3.3% stake in.  Finally, IPP stands for Independent Power Producers and represents long term contracts that guarantee power delivery to PSNH at fixed rates. 

The graph clearly shows the roles that various electricity sources play in providing the power needed on  a hot summer day.  Hydro, nuclear, coal, and wood plants provide the baseload generating capability.  Then, as demand increases during the day, plants with more expensive fuel sources, like Newington Station,  kick in.  

For the next 200MW of peak demand, PSNH turns to independent power producers, like Granite Ridge, LLC or Newington Energy.  Generally, it will already have contracts in place to make these purchases at pre-negotiated rates.  Finally, if demand increases beyond those contractual arrangements, PSNH may be forced to buy power on  the spot electricity market and pay whatever the market rates happen to be at the time.

So, if you're a utility like PSNH, it's best to know ahead of time how you're going to get the power to satisfy your customers' electricity demand.   Opponents of the scrubber project suggest that PSNH could just enter into more long-term contracts with Independent Power Producers to make up the difference, while PSNH believes that doing so would result in higher electricity rates.

Sunday, June 21, 2009

Electricity in New Hampshire - The Merrimack Station Scrubber Project

A discussion about electricity in New Hampshire would be incomplete without mention of Merrimack Station in Bow, NH.   Readers may recall that Merrimack Station is one of the 5 largest power plants in the state.  In fact, Merrimack Station is New Hampshire's largest coal-fired power plant, as well as the largest plant in PSNH's power generation portfolio.

Merrimack Station's two coal-fired units were built in the 1960s and are rated at 496 megawatts total, together providing over 10% of the power generation capacity in the state.  Because it's fueled by coal, Merrimack Station is always able to produce power at a lower cost than any other fossil fuel powered plant in the state.  As a result, it's almost always running at its maximum output.

Coal arrives at Bow Station from Portsmouth multiple sources (see comments below for more info)
Coal is the least expensive fossil fuel for power plants by far.  The heat energy contained in a fuel is measured in millions of British Thermal Units (MMBtu), and fuel costs are compared using dollars per MMBtu.  For 2009, coal is estimated to cost $2.16 per MMBtu, natural gas $4.35, and oil between $8.60 and $12.23 depending on the grade.  The cost for each fuel can bounce around wildly, but coal seems to always end up the cheapest.

OK, coal is cheap.  So what's the problem you might ask?  Well, coal may be cheap, but burning it emits lots of pollution and those emissions result in health and environmental issues that come with their own costs.

Fuel emissions data from theEnergyGuy.com
In the table above, the pollutants listed are carbon dioxide (CO2), sulphur dioxide (SO2), nitrogen oxides (NOx), carbon monoxide (CO), hydrocarbons (HC), and particulate matter (PM). 

Over the years, our collective understanding and appreciation of the dangers of these toxins has increased and that's resulted in several mandates to reduce emissions at power plants around the country.  In 2006, the NH legislature decided that NH too needed to clean up the output from its coal-fired power plants.  The result was a directive to PSNH to install a mercury and sulfur dioxide scrubber at Merrimack Station.

PSNH got moving on the directive and made a plan to connect the scrubber to the exhaust from the plant's two generating units.   You can see the stack for the new scrubber on the left side of this recent photo from Merrimack Station in Bow.

The photos below show that construction is well underway.  Even on a Saturday, when these shots were taken, crews were hard at work all around the site.

I couldn't help but notice the porta potty sitting on a platform at the top of the new stack.  I guess it makes sense, as  I'm sure it's a long trip down.  Seeing this close-up gave me renewed appreciation and respect for the construction workers who take on projects like this.  I'm not that afraid of heights, but that stack is waaaay up there!  

Although construction on the scrubber is well underway, the project has become very controversial lately.  The main source of the controversy was a cost increase that PSNH announced last year.  The original estimate for the scrubber was $250 million dollars, but once PSNH had completed the design and started the contracting process, they increased the estimate to $457 million.  

Since I'm late to the party, I won't get into a detailed analysis of the pros and cons of the project.  Check out the links at the end of this post, or google "merrimack station scrubber" if you're up for some digging.   

I'll end with a  list of the highlights of the pros and cons, as well as a listing of some of the hidden and not so hidden forces at work pushing for and against the scrubber.
Arguments in favor of the scrubber:
  • Coal is cheap (about $2.00 per MMBtu compared to $4-10 for gas or oil)
  • Using coal keeps our energy portfolio diversified and secures supply (comes from US and south america not middle east)
  • The plant itself is paid for and has life left in it
  • The project will result in needed jobs in industries that are suffering
  • It's needed to comply with the law and in the end we'll have one of the cleanest burning coal plants in the country
Arguments against the scrubber:
  • Coal may be cheap but when you add in the scrubber, the cost per mwh is no bargain
  • The plant will still emit lots of bad stuff  even after scrubber is done
  • The plant is very old and big stuff could break in the next 15-20 years, costing more money
  • The plant's boilers are old and finicky - they only burn special coal blends that can be tough to find and cost more
  • New cap-and-trade legislation and other laws could make emisions more costly than they are now - Many argue that this plant requires an emissions "free lunch" to be cost competitive.  Once the costs of the plant's other non-scrubbed emissions are priced in the plant could become very expensive
As with any public decision, politics and special interests are usually at work, sometimes behind the scenes.  $457m is a very large project so there's plenty of raw cash at stake.  But IMO, there's more than just the construction dollars at play as far as special interests go.
Forces pushing for the scrubber:
  • Deregulation laws prevent PSNH from building or owning new plants - once Merrimack Station closes, PSNH loses about 40% of its generation capacity for good
  • Equipment manufacturers, construction workers, powerplant workers, and associated unions and trade groups will gain from project contracts
  • The coal industry wants to secure demand for their product
  • Some ratepayers believe keeping the plant operating as long as possible will keep rates lower
Forces pushing against scrubber:
  • Environmentalists don't like coal because it pollutes and the mines leave behind a mess - they'd prefer the plant shut down
  • Independent power producers (TransCanada Hydro, FPL, etc) will have less competition if the plant shuts down
  • Regional natural gas and oil suppliers would prefer their fuels were used to make power instead of coal
  • Some ratepayers are worried about rates skyrocketing because of the project

Google Map of Merrimack Station in Bow, NH

View Larger Map

A brief PSNH infomercial on the scrubber project


Wednesday, June 17, 2009

MVP Series - Dover Edition #1

What are the Most Valuable Properties in towns and cities near you?

According to the City of Dover's  2008 Property Assessment Report, Liberty Mutual Group, an insurance company at 100 Liberty Way, owns the most valuable property in Dover, NH.

The Liberty Mutual campus actually consists of three buildings, the oldest was built in 1996 and the newest in 2007.

Here are some quick facts about Liberty Mutual's Dover campus:
>  2008 property tax assessment is $74 million - over $1.5 million in taxes paid
>  225 acre campus with 3 buildings
>  newest building is 350,000 sq ft and cost over $50 million to construct
>  3500 people employed at facility

With 3500 workers at the Dover campus alone, Liberty Mutual is the largest employer in the city.  The next largest employers are the City of Dover, employing 1139 people, and Wentworth-Douglass Hospital, employing 1048.

Quick facts about Liberty Mutual Group (LMG)
>  $28.855 billion in 2008 revenue
>  5th largest property casualty insurer in the US
>  Ranks 86th on the Fortune 500 list of largest US corporations
>  Company type: Private Mutual (not publicly traded)
>  Headquarters in Boston, MA

Google map of the campus (unfortunately it doesn't show the newest building)

View Larger Map


Monday, June 15, 2009

Piscataqua River Shipping - In Pictures

Since posting about the incident with the Torm Mary last week, I was inspired to capture some photos of a ship as it traveled up the Piscataqua River in Portsmouth, NH.  Having kayaked in the river myself very briefly, I can personally attest to the fast currents and lively waters that this tidal river is so famous for.   During each tide cycle, the entire volume of Great Bay as well as the flow from 5 large rivers pushes through the Piscataqua on its way to the Atlantic Ocean.

First, a view into how cargo was moved on the Piscataqua River in centuries past.  The Gundalow shown below is a replica of a design that dates back to the 1600s in Portsmouth.  These shallow draft vessels were essential in moving supplies and goods to and from early settlements along the rivers in Exeter, Newmarket, Durham, Dover, and Berwick, ME.

Since the early settlement of the area, the dangers of navigating the Piscataqua have been legendary.  In the 18th and 19th century, seafarers commented on the cross-grained and wily waters of the Piscataqua and even named a famously tough turn in the river "Pull-and-Be-Damned-Point."   They were actually referring to Henderson's point, in Kittery, which is just across from Newcastle.  In July of 1905, Henderson's point was the site of the largest explosion the world had ever seen, as workers attempted to rid the river of the treacherous rock outcropping at the behest of the US Navy.

Large ships can only navigate the Piscataqua during slack tide when the water is at its highest. I checked out the Moran Tug dock on Ceres Street to see if any of the three tugs were out.  With two of the three tugs missing, it was looking good for a large vessel to be on its way in.  

The map below shows the path of the vessel in the photos that follow.  You can click on the blue labels to see their names.

View Piscataqua Navigation in a larger map

The vessel "New England" approaches the Memorial Bridge.  You can see the Portsmouth Naval Shipyard behind it.  The vessel has just cleared the tough turn at Henderson's Point.

Next, the ship threads the needle through the Memorial Bridge.

Smoke pours from the stack of a tug as it struggles to push the vessel through the turn near Badger's Island.  You can see the Torm Mary, still docked at the state pier on the left.

That tug is still working hard to make sure the vessel gets around the bend ok.

One more needle to thread at the Sarah Long Bridge.

Once the ship makes it through the Sarah Long Bridge, it's just a few hundred more yards to the Irving Terminal.

Friday, June 12, 2009

Having a bad day at work - Maritime Edition

Seacoast Online is reporting that an oil tanker called the Torm Mary struck the bottom of the Piscataqua River near the Irving Oil terminal in Portsmouth, NH.  There were no injuries and no environmental risks have been reported at this time.  They don't call them the cross-grained and wily waters of the Piscataqua for nothing.  The vessel is moored at the Irving pier awaiting a thorough inspection of its hull by divers.

Here's a photo of the Irving Oil terminal that was taken when the pier was unoccupied:

The google map below shows the location of the Irving Oil terminal.

View Larger Map

I'll post a bit more later about the Irving Oil terminal and why it's so important to the greater Seacoast region of NH.

Thursday, June 11, 2009

MVP Series - Manchester, NH Edition #1

What are the Most Valuable Properties in towns and cities near you?

According to the City of Manchester, NH's 2008 Comprehensive Annual Financial Report, The Mall of New Hampshire, a regional shopping center at 1500 S. Willow Street, is the most valuable property in Manchester.  

View Larger Map

Here are some quick facts about the Mall of New Hampshire:
  • 811,000 total square feet of retail space
  • Stores include Macy's, JCPenney, Sears, Best Buy, Old Navy, A.C. Moore
  • 125 retail stores, 4 full service restaurants (including Bertucci's) and a 550 seat food court
  • Assessed at $155 million with annual property taxes over $2.5 million
  • Built in 1977 with a major expansion in 1999
  • Managed and 49.1% owned by Simon Property Group which recently secured $136.7m in financing at 6.23% on the property

According to demographics information supplied by Simon Properties, over one quarter of the NH population lives within 30 miles of the mall.  That's around 320,000 people or 120,000 households that may shop at this mall.

View Larger Map

Details on total employment at the mall were tough to find, but with 4 anchors, 4 restaurants, and 125 stores, it's a safe bet that several hundred people, perhaps even a thousand, work at this shopping center.  That would make the Mall of New Hampshire a major source of jobs in the region.

In case you haven't heard of Simon Property Group, they're the largest mall REIT in the country, with 336 shopping centers nationwide, and around 20 just in New England.  They also own the Mall at Rockingham Park, the Pheasant Lane Mall, and the Kittery Premium Outlets.

Some Additional Links:


Tuesday, June 9, 2009

Electricity in NH - All about NH's Power Generation Capacity

Where does the electricity that powers NH's homes and businesses come from?

I wrote a brief introductory post for this series earlier.  Today I'm plowing ahead with more of the meat.  I figured I'd start at the beginning and to me, that means electricity generation.  So today's post will focus on the power generation facilities in New Hampshire.

PSNH's Schiller Station in Portsmouth, NH
I'm skipping over the details about how the electricity industry works in a post deregulation era.   The short version is that there are companies that own power plants, companies that provide electricity to end customers, and companies that do both.   There's also an organization that maintains the regional power grid.  I'll dig into all that in another post.  For now, let's take a look at electricity generation in NH.

According to the US DOE Energy Information Administration, New Hampshire's power generation portfolio includes over 60 power plants scattered through the state, providing nearly 4500 megawatts of "nameplate" or rated electricity generating capacity.  To get some idea of scale, each megawatt of capacity can serve the needs of around 800 homes.    

I was surprised to learn that 35 of the 60 plants in NH are small hydropower plants and that over 80% of NH's generation capacity comes from just 5 power plants.

Most people in NH have heard about the Seabrook Station nuclear power plant, the state's largest power plant.  It's been generating power since 1990 and is currently owned by FPL Energy.  The next largest power generator in NH is a natural gas fired plant in Londonderry that's owned by Granite Ridge Energy.  The Granite Ridge facility started operation in 2003.  

The Newington Energy facility is another newcomer, starting operation in 2002.  It's a dual fuel plant that can use either natural gas or distillate fuel oil to produce power, depending on market conditions.  Next on the list are three PSNH owned legacy plants.  Merrimack Station in Bow has been burning coal since 1960, while Newington Station has been making electricity with fuel oil since 1974 (it can now also burn natural gas).  PSNH's Schiller Station has been burning coal since 1952, but can now also burn oil.  One of the units on Schiller was recently retrofitted to provide 50 megawatts of biomass (wood chips, etc) capability.

I bet you're wondering why there's a picture of Lindt Chocolate's Gold Bunny car in the middle of a post about electricity.  I'd do almost anything to spice up a boring post, but believe it or not, there is a connection.  PSNH's Schiller station is working with folks from Lindt & Spr√ľngli to explore the feasibility of burning raw cocoa beans in Schiller Station's new biomass burner.

Moore Hydroelectric Plant in Littleton, NH

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Rounding out the list of the largest plants in the state are two hydroelectric generation stations in the north country.  As I said before, there are many smaller hydroelectric plants in the state, but only two made the list of biggest plants in the state.   Comerford Generating Station is in Monroe, NH and has been operational since 1930 and the S C Moore Station is in Littleton and started operation in 1957.  These plants are both owned by TransCanada Hydro Northeast.

You can see from the chart above that NH's power generation portfolio is well diversified.  Renewable energy sources currently make up around 14% of our electricity generating capacity and with several biomass and wind projects in the pipeline, that number is on the rise.

Also, although this chart can't show it, many of our power plants are flexible and can burn different fuels depending on which is most economical at any given time.   In fact, the chart above has to be interpreted carefully.  It shows the percentage of nameplate capacity for each fuel type in our generating capacity, but it doesn't shed much light on how much power actually ends up getting generated by each fuel type in any given year. 

The nifty Google Map below shows where the power plants are in New Hampshire.  It's from David Brooks of GraniteGeek fame, from the Nashua Telegraph

View Traditional power plants in a larger map

Note that the megawatt numbers I've been quoting  are based on "nameplate capacity," which is the rated or maximum power that a given generation plant can output.  Most plants don't run at this output for very long, if at all.  Power companies vary output depending on demand for power, maintenance schedules, and fuel costs.  So as they say, your mileage may vary.

One last chart is a list of the top 5 power plant owners in the state.  Probably no big surprises here, since the list closely follows the list of the biggest power plants in the state.  One thing that this chart does highlight is that only around 25% of NH's power is generated by utilities (like PSNH), while the other 75% is generated by independent power producers.

Some more links:

Saturday, June 6, 2009

MVP Series - Portsmouth Edition #1

What are the Most Valuable Properties in towns and cities near you?

According to the Portsmouth tax collector's office, Lonza Biologics Inc owns the most valuable property in Portsmouth, NH.  The 18 acre property, located at the Pease International Tradeport at 101 International Drive, is assessed at over $110 million dollars.  Lonza's a 2008 property tax bill came in at just under $1.9 million.

       Photo courtesy of Lonza Group Ltd.

Lonza Group Ltd, which owns Lonza Biologics Inc. in Portsmouth, is a Swiss company headquartered in Basel. The Lonza Biologics website describes the Portsmouth facility as a production site that "specializes in the large scale custom manufacture of recombinant therapeutic proteins and monoclonal antibodies by mammalian cell culture."  

Right.  I'll get to that that later.  First, here are some quick facts about Lonza's Portsmouth facility:
Area: 350,000sq ft
Employees: 642

> Processes based on mammalian cell culture
> Four 20 000-liter bioreactor trains
> Two 5,000-liter bioreactor trains
> Two 1500-liter perfusion bioreactor trains
So in addition to having the largest tax bill in the city of Portsmouth, Lonza is an important employer in the region and is a major contributor to the NH Seacoast's economic vitality.   Since arriving in Portsmouth in 1999, the Lonza facility has been expanded multiple times.

But just what does Lonza manufacture in Portsmouth?  I'm not sure about you, but when I think about a big manufacturing plant, the first things that come to mind are cars, refrigerators, and big-screen TVs.  I might even imagine chemical products like household cleaners and personal care items.  I definitely would not think of "Recombinant therapeutic proteins and monoclonal antibodies made by mammalian cell culture." What does that mean anyway?

What follows is a layperson's attempt to parse and understand what Lonza does in Portsmouth.  The biotech industry is very competitive and therefore rather secretive, so precise information is tough to track down and verify.  If anyone knows better or if  I've gotten something wrong, please correct me in the comments.

In Portsmouth, Lonza does something called "contract manufacturing," which means that they manufacture products on behalf of other companies which generally own the designs and rights to the products.  Many industries use contract manufacturers because the expertise needed for product design and development is very different from what's needed to be an efficient and high quality manufacturer.  In medical manufacturing, there's also a complex maze of safety and  regulatory requirements that a manufacturer must navigate.  These headaches can all be handled by hiring a reliable contract manufacturer.

So in short, Lonza enters into agreements with pharmaceutical companies, such as Genentech, Amgen, Bristol-Myers Squibb, or Eli Lilly to manufacture products or parts of products to exacting specifications on their behalf.  The pharmaceutical companies get reliably manufactured products, and Lonza makes a good living while employing lots of folks in Portsmouth.

Some examples of drugs that a facility like Portsmouth's might help make are shown below:
Avonex - Multiple Sclerosis
Xigris - Sepsis
Rituxan – Non-Hodgkin's Lymphoma
Enbrel – Rheumatoid Arthritis
Soliris – PNH
Orencia - Rheumatoid Arthritis
Generally, Portsmouth's Lonza plant doesn't make actual medicines prescribed by doctors, instead it makes important ingredients that are used in the medicines.  No doubt, the Portsmouth facility is a high-tech wonder.  Creating the processes to reliably and safely mass produce pharmaceutical companies' inventions seems like no small task, especially when you consider that many of the substances they're making are actually alive.

If you're interested in further reading, here are a few additional links:

Finally, some additional press photos of the Portsmouth, NH facility are shown below
(courtesy of The Lonza Group,Ltd):

20,000 liter bioreactor

Purification suite

Media preparation area

Buffer hold suite in large scale

Friday, June 5, 2009

NH renewable energy rebates starting soon

If you've been thinking about going solar, now could be as good a time as any.  

Under the NH energy rebate program, residential solar and wind systems may be eligible for a rebate of $3 per watt installed or 50% of the installation cost, whichever is lower up to a  maximum of $6000. The NH Renewable Energy Generation Incentive Program (HB 1628) starts accepting applications next month.   There's lots of information on the program at the Office of Energy and Planning on the nh.gov website. 

To qualify for the rebate, the project must be installed at a residence (no businesses) and generate electricity using renewal energy such as wind or solar.  Systems that only generate heat such as heat pumps, biomass boilers, and solar thermal panels do not qualify for the rebate.  The system can be either stand-alone or grid-tied, but the total generation capacity for the system must be less than 5kW in order to qualify.  Finally, the project has to have begun operation after July 1, 2008.  

Unfortunately there is a catch.  Funding for rebates on residential projects appears to be capped at $500,000 in the first year.  There's very little information about how the funds will be paid out should the amount applied for exceed applications.  IMO, this uncertainty of funding greatly diminishes the incentive value of this program, since homeowners can't necessarily rely on these rebates to reduce their out of pocket costs.

In 2009, the federal government also expanded the tax credits for installation of wind and solar systems to 30% of the installation cost, up to a $2000 maximum credit.  The federal tax credit program covers a wide array of energy efficiency improvements such as insulation, new windows and doors, new heating and a/c systems.

Thursday, June 4, 2009

Greenland Mall Construction Update

This post is a quick update on the progress of the 56 acre, 300,000 sq. ft shopping mall project in Greenland NH. The new mall will house a Target, a Lowe's, and a Stop and Shop grocery store. Massachusetts based Packard Development is apparently on track for a staggered opening of the property in the second half of this year.

As you can see from the photo above, the new Greenland Target appears all but done from the outside. That's good since the grand opening is scheduled for July 26th.

Below you can see the beginnings of the foundation for Target's future neighbor, presumably Lowe's.

According to a Lowe's press release, the Greenland, NH location will have 117,000 sq ft of retail space with an additional 29,000 sq ft of outdoor garden center space. Also according to Lowe's, a store of this size typically costs around $18.5 million and creates an estimated 175 new jobs. The photos below show bricklayers fast at work on the back wall of the new structure.

Although the Target opening date is set for next month, opening dates for Lowe's and Stop and Shop haven't yet been established, but are roughed in for the fall/winter of 2009. (UPDATE: according to SeacoastOnline, the Lowe's opening now set for Jan 8, 2010).

The 56 acre site formerly housed an Osram-Sylvania manufacturing plant which had been sitting idle for ten or fifteen years.

Having a bad day at work...

Yesterday afternoon, there was a roof collapse on the construction site of the new CVS at 323 Lafayette Road in Hampton. This is the site of the former Hampton Cinema, next to the Galley Hatch. The accident happened while workers were setting the roof trusses with a large crane. Several trusses crashed down into the steel shell of the new structure. No one was hurt.

By early evening, workers were removing the debris from the building with a large crane.