Peaker plan afloat

Peaker plan afloat

Strange political alliance opposes city plan for new fossil fuel power plants and looks for creative alternatives

By Amanda Witherell

A proposal to build two natural gas–fired power plants is still floating through the city’s planning process, set for approval by the Board of Supervisors as soon as May, but no one seems truly comfortable with the deal.

“It’s not my first choice or my second choice, but it’s the choice I have,” Board president Aaron Peskin told the Guardian. The choice seems to be either the city builds newer, potentially cleaner power plants — known as “peakers” because they would be used mainly during times of peak energy demand — or does nothing to shut down the super-polluting Mirant Potrero power plant.

The combination gas- and diesel-burning power plant spews a cocktail of toxins from its stack every year and draws 226 million gallons of water a day from the bay to cool its generators yet it’s mandated by the state to keep operating. The discharge flows back into the bay significantly altered, with microorganisms and fish larvae replaced by mercury, dioxins, and PCBs.

The California Independent System Operator (CAL-ISO), the state agency that oversees electricity reliability, said it would break the Mirant contract if the peakers came online. The city-owned plants would use recycled water and more up-to-date air quality controls, making for cleaner facilities at the two proposed sites — the airport and the intersection of 25th and Maryland in the Bayview.

They also would be city-operated, giving a little more leg to the local public power movement. But they still burn fossil fuel, and at a time when the climate is in crisis and natural gas prices are only rising, many say this isn’t the direction a trend-setting city like San Francisco should be heading.

“This isn’t the progressive way to go,” said Sup. Chris Daly. “We need to be more forcefully installing renewables that are municipally owned.”

Daly, along with supervisors Ross Mirkarimi and Michela Alioto-Pier and the city’s current power provider Pacific Gas and Electric Co., have lined up against building the peakers in what Mirkarimi calls an “unholy alliance.”

PG&E, lobbying under the guise of the “Close It! Coalition,” states that the peakers “further San Francisco’s reliance on fossil fuels and add to global warming.” The $12 billion utility company currently gets 40 percent of its power the same way and is in the process of constructing several similar plants throughout the state. Nevertheless, the company has submitted detailed proposals to the city and state outlining demand response measures and transmission upgrades that would mitigate the need for more energy.

Mayor Gavin Newsom and City Attorney Dennis Herrera support building the peakers in order to close the Mirant plant, and Sups. Sophie Maxwell, Bevan Dufty, and Jake McGoldrick are carrying the legislation that would seal the contract with Cleveland, Ohio-based Industrial Construction Company to start the $252 million project.

That legislation points out that Mirant’s water permit is set to expire Dec. 31, and the Regional Water Quality Board has indicated it has no plans to renew it unless Mirant upgrades to best practices. This has been suggested as an alternative way to close the plant. When asked whether Cal-ISO’s reliability demands trump the Water Board’s requirements, Cal-ISO’s Gregg Fishman wrote in an e-mail, “What happens if the Potrero unit’s water permits expire? Simply put — we’re not sure.”

Beyond that, a number of questions remain: Should the requirement for a full feasibility study for city contracts more than $25 million really have been waived for this project? Is it fair to put the new power plant in the neighborhood that has always endured the lion’s share of the city’s pollution? What if they were on movable barges instead? And has the city been forceful enough with CAL-ISO when it comes to planning the city’s energy future?

Alioto-Pier has introduced two resolutions addressing a couple of these issues. One calls for a straight-up feasibility study — which supporters of the peakers have waived. “The city has a policy of conducting a full fiscal analysis of capital projects over $25 million,” Alioto-Pier said in a press release. “This should be no exception.” Her other resolution asks for an independent analysis of the whole thing and a revised 2008 Energy Action Plan for the city.

For several years, Cal-ISO has said Mirant could stop operating if San Francisco can provide an alternate “firm” power source in its Energy Action Plan. In 2004, San Francisco’s Public Utilities Commission proffered the peakers, and that became the city’s power plan before adopting the CCA (community choice aggregation) plan for the city to develop an energy portfolio of at least 51 percent renewables.

Though the SFPUC has continuously asked Cal-ISO if the 2004 Action Plan is still the way to go now that the Trans Bay Cable and other line improvements have come into play, Josh Arce, a lawyer for Brightline Defense, which sued to stop the peaker plan, says they’ve been framing the question all wrong: “The PUC has essentially been saying, ‘Does the Action Plan include all four combustion turbines?’ And Cal-ISO has said, ‘Yes, it includes all four.’ Instead, the PUC needs to come up with a new Action Plan and give it to Cal-ISO and say we’re doing this instead.”

Alioto-Pier’s resolution, if passed, could prompt a fresh response from Cal-ISO about what the city really needs — one, two, or three peakers, or maybe none at all. Maxwell’s resolution includes a caveat that the city must determine if needs could be met by building smaller plants with fewer than the four turbines currently proposed.

Peskin, who chairs the city’s Government Audit and Oversight Committee and will hear both Alioto-Pier resolutions on May 5, as well as the Maxwell plan to move to build the peakers, told us, “This is one of the toughest decisions that’s been before me in the eight years that I’ve been on the Board of Supervisors.”

No one, it seems, really wants to build two fossil fuel–burning power plants on San Francisco soil. But what if they weren’t on our soil? What if they were floating on barges?

Another resolution pending in the Land Use Committee, brought by Mirkarimi, proposes putting the two power plants on barges, which could be moored alongside the city when needed and dispatched elsewhere when they’re not. What if, a few years from now, citizens are able to cut down their power needs, CCA brings more renewables online, and the city finds it no longer needs the 200 megawatts generated by natural gas power plants?

Proponents say it’s an option worth considering if the city really intends to eventually close the plants. Dismantling a facility if the city decides to sell leaches away 20 to 30 percent of its overall cost. But if it’s on a barge, the natural gas, electricity, and mooring lines are simply cast off. A barge would be steadier in an earthquake and continue to float if the sea level rises — a climate change scenario that could swamp both current bayside power plant sites. Barges also can be dispatched to emergencies, leased down the river to other cities in the Bay Area, or sold for a profit. They’ve been in use around the world since the 1940s and have been called a more regional approach to energy planning.

“It’s 145 MW of portable energy,” said Rick Galbreath, Mirkarimi’s aide. “You can pull it up, plug it in, and you’re on the grid. It’s really a dynamic solution.”

Paul Fenn, the brain behind the city’s CCA plan, points out that if CAL-ISO still insists the peakers are needed now but not in the future, a power barge is the kind of flexible solution that could pay off in the long run. “It’s making a temporary measure for an urgent situation,” he said, adding that such a temporary solution should reflect the city’s long-term goals. “If the city is planning to replace them with renewables, it’s important to get the city to make that commitment. This is one of those strategic decisions that’s going to impact the future.”

The San Francisco Bay Conservation and Development Commission generally opposes building anything in the bay if it can be built on land first. “The proponents would have to do an analysis and convince our commission that this is really a good idea for the region,” said Will Travis, a BCDC spokesperson.

But Dave Nickerson, owner of Houston-based Power Barge Corporation, said he’s looked at the city’s peaker plans and thinks it would cost about $100 million to build a three-CT barge. “We would probably build the plant here and ship it up,” he said, pointing out that the city’s turbines are already in storage down in Texas and it’s cheaper to build it in a shipyard. To claims of environmental degradation, he says, “It would have the environmental footprint of a state of the art land-based plant.”

He also pointed out that there’s a scarcity of these particular turbines now, which are worth about $1 million more every year. This year it’s around $16.5 million apiece, with $18 million as the projected 2008 price.

Emma Lierley contributed to this story.

Originally published April 23, 2008 in the San Francisco Bay Guardian

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