Money is power

Money is power

PG&E spent a record-breaking $10.3 million against Prop H — more than $53 per vote

By Amanda Witherell

While the latest public power proposal was soundly defeated at the polls, the apparent failure of a pair of electricity generation initiatives backed by Mayor Gavin Newsom and Pacific Gas & Electric Co. is fueling an existing plan to create more city-owned energy projects.

Proposition H, which would have moved the city toward 100 percent renewable energy by 2040 and allowed public power to help meet that goal, lost Nov. 4 by more than 20 percentage points. PG&E spent a record-breaking $10.3 million against the measure, or more than $53 per vote as of the Nov. 10 tally.

For that kind of money, said campaign finance expert Bob Stern of the Center for Government Studies, “they could have taken every voter out and bought them an expensive meal.” But, he said, that’s a pittance for a company like PG&E. “They knew spending $10 million was going to save them a bunch of money.”

Two days after the election, PG&E announced a 9 percent increase in year-to-date profits over last year, boosted partly by a 6 percent rate increase PG&E implemented Oct. 1, which it argued was needed to cover the increased cost of natural gas.

Prop. H would have moved San Francisco away from volatile fossil fuel prices, although the city is still hoping to procure 51 percent of its energy needs from renewables by 2017 through the community choice aggregation (CCA) program.

Meanwhile a plan to retrofit the Mirant Potrero Power Plant is looking shakier since Nov. 4, when the Board of Supervisors tabled legislation that would have authorized the Mayor’s Office and San Francisco Public Utilities Commission to negotiate the deal.

Prior Land Use and Economic Development committee hearings showed that retrofitting the plant to run on natural gas instead of diesel may not be as technologically or economically feasible as suggested in a report commissioned by Mirant (see “Power possibilities,” Nov. 5).

But a recent report on CCA outlines ways the city may be able to procure the baseload energy demand required by the California Independent System Operator (Cal-ISO) without retrofitting Mirant or building new peak-demand fossil fuel plants (known as “peakers”), as city officials originally proposed.

The report by Local Power, the lead CCA consultant hired by the city, suggests that the SFPUC’s current plan to upgrade natural gas steam boilers in large downtown buildings can be modified to capture waste heat and turn it into energy, a process known as cogeneration.

The city Department of the Environment has already identified 106 MW of potential energy — about the same amount Cal-ISO is requiring the city to have on hand for energy reliability. Although this isn’t renewable energy because it’s capturing wasted gas heat, “it’s really clean, good quality brown power,” said Paul Fenn of Local Power, noting that it makes use of something that is currently being wasted.

Local Power’s draft report, which lays the groundwork for what the city needs to do before 2010 to make CCA work, also disputes the conclusions of a tidal power feasibility study conducted for the SFPUC. In July, URS Corp. reported that tidal power in the Golden Gate would cost between 80 cents and $1.40 per kW-hour and only generate a little over 1 MW of power. “We do not consider a tidal power project located in the vicinity of the Golden Gate to be commercially feasible at this time,” the report states.

Local Power contends that URS undervalued the potential energy by using computer modeling rather than actual tidal data and overlooked the strongest area for building an underwater turbine. It also failed to account for public financing at a lower interest rate, which would make city-owned tidal power much cheaper.

“We are confident you can get 10 MW,” Fenn said. “The whole thing was modeled on PG&E ownership.”

Local Power recommended the city get actual tidal data from the best spot and run the numbers again. “The ocean is the ultimate energy resource for San Francisco,” said Fenn, who compared the challenge of constructing this kind of infrastructure to the Hoover Dam.

Newsom, who opposed Prop. H but still claims to support CCA, remains committed to tidal power. “Mayor Newsom supports advancing a tidal project at the mouth of the bay,” his spokesperson, Joe Arellano, wrote in an e-mail.

The rollout of CCA is expected in 2010, when the city issues a request for proposals from companies interested in building or supplying energy. Several companies have already responded to a request for information. CCA is slated to include a 150 MW wind farm, 31 MW of solar, 103 MW of local distributed generation, and 107 MW of efficiency technologies. Funding would come from $1.2 billion in renewable energy bonds that have already been approved.

Local Power’s report includes concrete actions the city can take, including a plan to finally make Hetch Hetchy power available to citizens, a recommendation that the wind farm be built in the Delta for easy access to the Transbay Cable — a new 400 MW, 59-mile transmission line between Pittsburg and San Francisco that’s scheduled to be completed in 2010 — and urging the city to petition the California Public Utilities Commission (CPUC) for so-called public good charges collected from ratepayers that currently go to PG&E’s energy efficiency programs.

“We’re trying to put ideas on the table for the RFPs,” said Fenn, who stressed that the city should make it as easy as possible for CCA to get underway, a goal that will require a lot more cooperation between departments. For example, the report outlines several hindrances to getting renewable energy up and running, from permit hassles to delayed interconnections to PG&E’s grid.

“Where we see problems in the city for permitting and zoning, we can seek to change them now,” Fenn said.

That chance may come soon. The Land Use and Economic Development Committee is hearing legislation Nov. 12 to require conditional use permitting for all power plants greater than 10 MW. Though the legislation originally targeted the Mirant plant, the Planning Department, in its review of the draft legislation, suggested that all power plants be subject to the additional review. Sup. Aaron Peskin, who sponsored the legislation with Sup. Sophie Maxwell, suggested the change wasn’t appropriate. “It just means more public process.”

But, Fenn said, “To set standards based on pre-CCA era is at this point confusing. Like [Sup.] Ross [Mirkarimi] said, the CCA program should be the unifying principle of energy policy in San Francisco. Integrating all the pieces is indeed the entire secret of making all the parts perform better so that we can achieve the required meet-or-beat-PG&E-rates outcome.”

Mirkarimi told us the program could obviate retrofitting Mirant or pursuing the peakers. “CCA still has not been taken seriously enough by the SFPUC or the Newsom administration.”

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

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