How Much Will Footprint Power Pay Salem in Taxes?

It isn't often that a city gets a gift that promises to pay at least $4.75 million a year in local taxes, creates jobs, pollutes far less and gives the city about 40 acres of land it can use to open the harbor to more public access while developing other tax-paying, job-creating businesses.

If Footprint Power's plans are approved by a myriad of state agencies, that is what the City of Salem is getting from the plans by the Bridgewater, NJ firm for a new 630-megawatt natural gas electric generation plant to be built on the site of the old .

"The world has completely changed with these guys coming in," said Lauren Liss, an environmental attoney representing Footprint.

In its first formal presentation on the proposed natural gas plant, received a relatively warm welcome from the handful of Salem residents who showed up for the morning meeting. The executives were asked numerous questions from residents, other state agency officials and representatives of environmental groups. No speaker demanded that the city or state stop Footprint from building the proposed natural gas plant within blocks of Derby Street residents.

Salem City Planner Lynn Duncan said the city is pleased that Footprint will demolish the old Salem Power Plant and clean up the 64-acre site.

"We are excited to work with the city," said Peter Furniss, CEO of Footprint.

$4.75 Million in Taxes And More 

The Footprint executives said the company would pay at least the $4.75 million that Dominion has paid to the city in the past several years.

The plant might generate more. Furniss and Silverstein said that would be the subject of negotiations with the city.

In a one-year agreement for this year, Dominion Energy is paying the city $3 million less. It will pay $1,490,500 in property taxes and $259,500 as a host fee for a total of $1.75 million.

And the threat to the city was that when Dominion closed its last unit in 2014, it would pay the city almost no taxes. For five years, any loss in revenues for the city will be made up by the state from a special regional fund created by energy companies.

But Mayor Kimberley Driscoll has warned that without something like the natural gas plant, the city could face a $5 million shortfall in coming years.

In addition to the property taxes, the natural gas plant, built on 20 of the 64-acre site, would leave open almost 40 acres for new commercial development. 

Boston Needs the Electricity

Under the Footprint plan, the old plant would be torn down after its last unit closes in May of 2014. And in its place Footprint would build a new plant that would supply electricity to the New England grid and particularly to a electricity needy Boston.

The new plant, which would be used only when the New England electric grid operator calls on it, can get 300 megawatts of generating power started in 10 minutes, the full 630 megawatts within one hour.

Older plants require about 10 hours to start generating power.

The plant is adjacent to a large National Grid switching station, which will convert the generated electricity. And it is within two miles of a huge natural gas pipeline, owned by Spectra, that brings gas from Canada to New England.

The proximity to both the pipeline and the switching station make the natural gas plant feasible, Furniss said.

Footprint said the new plant will have far less impact on the environment than the old plant. Instead of using 110 million gallons of water from the harbor each day, the new plant, which uses air instead of water to cool itself down, will use almost none. That is bad news for fishermen who like to catch fish attracted to the heated water the plant now pumps back into the harbor, but it is good for the overall health of the harbor, they said.

The plant will also have to comply with new, stricter air quality standards. The new plant, Furniss said, would not pollute the air nearly as much as the existing plant.

40 Acres of Harborfront to Develop

City officials, residents and the power company executives seemed most pleased that the new plant will open about two-thirds of the site closest to downtown for future development.

The power officials said they have no idea what that new development would look like. Under the current harbor plan, it would have to be marine-related businesses.

Silverstein said Footprint is pleased to reopen the Salem Harbor to public access. "Salem Harbor is the city's greatest natural resource. We are excited that we are the ones who will allow Salem to turn back to the harbor. For years, the harbor has been blocked off by a chain link fence."