Newsom’s power play

Newsom’s power play

“Have they been concerned about what’s clean, about our people?”

By Amanda Witherell

Mayor Gavin Newsom finally outlined what he calls a “more promising way forward than the current proposal” of building two publicly owned power plants in San Francisco.

The way forward: retrofit three existing diesel turbines at the Mirant-Potrero Power Plant, while simultaneously shutting down Mirant’s most polluting smokestack, Unit 3.

Newsom wrote a letter to the Board of Supervisors just before a June 3 hearing on the power plants, describing a May 23 meeting that he convened with SFPUC General Manager Ed Harrington, City Attorney Dennis Herrera, California Independent System Operator President Yakout Mansour, California Public Utilities Commission Chair Mike Peevey, Mirant CEO Ed Muller, and Pacific Gas & Electric Co. CEO Bill Morrow.

“In the meeting, we vetted the possibility of retrofitting the diesel turbines [currently owned and operated by Mirant] and asked each stakeholder to give us the necessary commitments to advance this alternative,” Newsom wrote. The board then voted to shelve the power plant plan until July 15 so the retrofit option can be vetted.

Most significant, Newsom’s meeting with top dogs at energy companies, who stand to lose a lot from San Francisco owning its own power source — and the resulting correspondence elicited a new response from Cal-ISO, the state’s power grid operator, about exactly how much electricity generation San Francisco needs.

For the first time, Cal-ISO said it will allow Mirant’s Unit 3 to close as early as 2010, when the 400-MW Transbay Cable comes online, saying that the city no longer needs to install a combustion turbine peaker plant at the airport.

Sup. Sophie Maxwell expressed frustration that the questions she, her staff, and other stakeholders have been asking for the past several years are suddenly getting different answers. “I think we’re seeing a big movement by Cal-ISO. This is huge. Before, we asked all these questions, [but] they weren’t saying what they’re saying now,” she told the Guardian after the hearing.

When asked why she thought this was happening now, she simply pointed to PG&E. “Who stands to benefit from us not generating our own power? Who sent out all that stuff?” she asked, referring to the flyers depicting filthy power plants that PG&E has been mailing to residents in an effort to drum up public sentiment against the city’s plan to build peakers. “Have they been concerned about what’s clean, about our people?”

Some environmental activists are hailing the change as a triumph. “David has just moved Goliath, but we need to keep pushing,” said Josh Arce of Brightline Defense, which sued to stop the city’s plan to build the two power plants. He said his organization’s goal is ultimately to have no fossil fuel plants in the city. But when asked about the retrofit alternative, he said, “We don’t support it; we don’t not support it.”

Cal-ISO has insisted that San Francisco needs 150 MW of electricity to stave off blackouts. This grid reliability is currently provided by Mirant-Potrero, but the plant’s Unit 3 is the greatest stationary source of pollution in the city. Bayview residents, who have borne a disproportionate share of the city’s industrial pollution, have been agitating for more than seven years to close the plant. Much of the leadership has come from Maxwell, who represents the district and has championed the plan to replace the older Mirant units with four new ones owned and operated by the city.

That vision was integrated into San Francisco’s 2004 Energy Action Plan, which Cal-ISO has used as a guiding document for the city’s energy future. The plan outlines a way to close Mirant by installing four CTs and 200 MW of replacement power. “Cal-ISO has consistently said in writing, in verbal instructions, and at meetings, that the CTs are the only specific project that was sufficient to remove the RMR [reliability must-run contract] from Mirant,” said SFPUC spokesperson Tony Winnicker.

As San Francisco’s energy plans have evolved over recent years, SFPUC staff have been instructed at numerous public hearings in front of the Board of Supervisors to ask Cal-ISO if all four CTs are still necessary. Letters obtained by the Guardian show Cal-ISO has never said the airport CT isn’t necessary until now. When asked why, Cal-ISO spokesperson Stephanie McCorkle said, “The questions are not the same. That’s why the answers are different.”

When pushed for more details on what’s different, she said, “We feel the introduction of the Mirant retrofit fundamentally changes our approach to the fourth peaker. I think it’s the megawatts. It’s basically the retrofit that changes the picture.”

Mirant’s peakers currently put out 156 MW, an amount that may be reduced by retrofitting. The city’s three peakers would produce 150 MW. Winnicker couldn’t explain why the story is changing, telling us, “We’re really deferring to the leadership of the mayor and the board because they’ve been able to get a really different view from Cal-ISO than we’ve been able to get.”

“We’ve always said we’re open to alternatives,” McCorkle said. “We can only evaluate what’s presented to us and the Mirant retrofit was only presented in mid-May.” Opponents of the peaker plan say the new position indicates SFPUC officials haven’t been pushing Cal-ISO hard enough or asking the right questions.

“The city hasn’t done its due diligence insisting on different configurations of the peakers,” Sup. Ross Mirkarimi told us. “What we’re learning now we could have learned two years ago.” He went on to add, “With the abundant paper trail, one can only surmise or conclude there may have been a presupposed bias on the part of the PUC to the answers expected from Cal-ISO.”

The SFPUC has been instructed by the mayor’s office to determine if Mirant retrofit diesels would be as clean as the city’s CTs. Until that can be proved, some are withholding support.

“I haven’t seen any information that a Mirant retrofit is as clean as the peakers,” City Attorney Dennis Herrera told the Guardian. “From my perspective, I want the most environmentally clean solution.”

To that end, some would like to see a formal presentation to Cal-ISO of a “transmission-only” alternative, which would outline a number of line upgrades and efficiencies that would obviate the need for any in-city power plants. Sup. Maxwell introduced a resolution urging the SFPUC to put such a proposal before Cal-ISO and to enact strict criteria for any alternative to the city’s CTs.

“We need to remember that Mirant was a bad actor. Mirant is not to be trusted,” Maxwell said. “We sued them and we won our suit,” she added, citing litigation brought by the city against the private company for operating the power plants in excess of its permitted hours and for market manipulation during the 2001-02 energy crisis.

Maxwell’s legislation, cosigned by six other supervisors, lays those concerns out and cautions, “In view of this history, the city should be cautious and vigilant in taking any steps that expand the operation of Mirant’s facilities in San Francisco.”

The legislation also reminds policymakers that San Francisco’s Electricity Resource Plan identifies eight specific goals — one of which is to “increase local control over energy resources.” It goes on to say, “City ownership of electric generating supplies can reduce the risk of market power abuses and enable the city to mandate the use of cleaner fuels when feasible or to close down any such generation when it is no longer needed.”

Maxwell’s resolution also outlines a series of conditions that any alternative to the city’s peakers would have to meet. The alternative would have to be as clean or cleaner than the city peakers, have the same comprehensive community benefits package that was attached to the city’s peaker plan, have no impact on the bay’s water, and only be run for reliability needs.

The City Attorney’s Office said these criteria are not set in stone — it’s a resolution and therefore requires some level of enforcement or action. Mirkarimi, who signed on to the resolution, is still uncomfortable with it as it stands, saying it should include discussion of the city’s new community choice aggregation (CCA) plan for creating renewable public power projects.

Some environmentalists cautioned that the transmission-only approach still leaves too much control in the hands of others. “We shouldn’t let PG&E be the ones to solve this problem,” said Eric Brooks, a Green Party rep and founder of Community Choice Energy Alliance. He’s urging city officials to put all the city’s energy intentions — from the CCA plan for 51 percent renewables by 2017 to an exploration of city-funded transmission upgrades — into a presentation for Cal-ISO.

Brooks noted a conspicuous absence from the May 23 meeting with the mayor: “CCA and environmentalists weren’t at the table, as usual.”

Originally published June 11, 2008 in the San Francisco Bay Guardian