June 2008

Peaker Plants Still in Play

By Deia de Brito

Intense politicking by Environmental Defense Fund, Natural Resource Defense Council, and Pacific Gas and Electric Company (PG&E) has slowed the momentum behind San Francisco Public Utility Commission’s (SFPUC) proposal to site three combustion turbines (CT) in the Dogpatch neighborhood as a way to retire Mirant Corporation’s 1960s-era Potrero Power Plant.
Last month Mayor Gavin Newsom asked the Board of Supervisors to delay voting on the CTs to provide more time to consider alternative reliability plans.  “I don’t want to live to regret this decision. We may look like fools five years from now,” said Newsom. 

In response, PG&E has renewed its efforts to convince the City to adopt a power plant-free approach to ensuring electric reliability, relying instead on a mix of energy management and small-scale generation, including a proposal to clean-up small back-up diesel engines that was previously rejected by the California Public Utility Commission.  Simultaneously, SFPUC Commissioner Richard Sklar is exploring re-powering the Potrero Power Plant’s existing three back-up diesel units as a low-cost way of providing in-City generation while closing the facility’s largest unit.

San Francisco’s goal of being a green-energy leader has always conflicted with the notion of building a fossil-fuel power plant.  Civic and community leaders who support the CTs say they do so reluctantly.  “I am not supporting the development of the CT project because I am a fan of new power plant development in the City,” said District 10 Supervisor Sophie Maxwell.  “I am supporting this because I must act for the health of my constituents.”  According to Potrero Power Plant Citizen Task Force member Karen Pierce, the California Independent System Operator (Cal-ISO), which has mandated the continued operation of the Potrero Power Plant to ensure electric reliability, has refused to accept anything other than the CTs as a way to close the plant. “We insisted for a long time that the CTs be placed in different parts of San Francisco. The ISO never moved. The ISO has had a bias, from day one, that San Francisco was going to generate electricity using some sort of fossil fuel.”

Mike Florio, a former Cal-ISO board member, said, “It was quite an effort...to push the energy staff to even look at shutting down a power plant. That’s contrary to their DNA to shutdown power plants. They want more power plants, more transmission lines.” Several of Cal-ISO’s board members have previously or currently work for investor-owned utilities, such as PG&E, San Diego Gas and Electric Company, and Sempra.  “Unless [the City’s] engineers can convince [Cal-ISO’s] engineers, I think they’re probably sticking with what they’ve got.”  The two largest transmission lines serving San Francisco are insufficient to meet Cal-ISO’s reliability standards in the event of an earthquake or other disaster.  However, Cal-ISO has indicated that the half-billion dollar Trans Bay Cable, which will transmit power from the East Bay to San Francisco, will reduce the need for in-City generation, raising the question of whether all the CTs are needed even under the agency’s stringent standards.

Joshua Arce, Executive Director of Brightline Defense, believes that Cal-ISO and the SFPUC have colluded to pressure the Board of Supervisors to approve the CTs.  “I received public records pursuant to our Sunshine Ordinance that show that the [Cal-ISO letters indicating that the CTs are necessary to close the existing power plant] are actually initiated and drafted by the SFPUC.”  Cal-ISO’s communications “…have been drafted by the same agency that is for some reason intent on building these power plants at any cost,” said Arce, referring to the SFPUC.  Arce plans to turn this information over to the San Francisco Ethics Commission.

“A study shows that 95 percent of power plants in the United States are sited in low-income, people-of-color neighborhoods,” said Barbara George of Women’s Energy Matters.  According to District 2 Supervisor, Michela Alioto-Pier, “If this were happening in any other district in San Francisco, it would not even be thought of. This would not be considered an option.”

According to Dick Ratliffe of the California Energy Commission, his agency, along with the Bay Area Air Quality Management District and the City and County of San Francisco, performed three health risk assessments, all of which had the same results: the CTs are clean. “The conclusion is that there are no significant health risks posed by this project to the adjacent neighborhoods or any part of San Francisco,” Ratliffe said. Alioto-Pier questioned Ratliffe’s statement in light of the SFPUC’s proposal for enhanced street sweeping to reduce the effects of particulate matter near schools adjacent to the proposed CTs.  Ratliffe responded that he couldn’t comment on street sweeping.

Proponents claim that the CTs will enable Mirant’s plant to close and that the CTs will be shut down once the City meets its energy needs with more benign strategies. But some activists fear the CTs will operate for 30 years or longer. Under the SFPUC’s proposed contract, the California Department of Water Resources would buy electricity capacity from the CTs until 2016, after which the City would pay off the remaining $110 million by finding other power purchasers.

But Eric Brooks of the grassroots organization, Our City, sees flaws in this agreement. “PG&E, the biggest such potential customer, has already said, ‘No’ – largely due to a new state mandate for it to cut its production of new fossil fuel projects. Other potential customers will face the same environmental restrictions over the next two decades.... Our ability to sell natural gas power capacity at a reasonable price will likely collapse, and we will be forced to run the peakers full tilt...to sell enough hard power to meet even the 30 year contract deadline,” said Brooks.

“San Francisco’s power infrastructure has changed since the peaker project was approved,” said Alioto-Pier. With the Trans Bay Cable and Jefferson-Martin Transmission Line, demand management programs, in-City transmission upgrades, and solar programs, some San Franciscans find it hard to believe that much, if any, in-City generation is necessary to retire the Potrero Power Plant.