The peaker problem

Editorial: The peaker problem -- SF shouldn't approve new power plants without strict controls

San Francisco is finally moving forward on a plan to put four small electric power plants into operation, three of them in Southeast San Francisco. In theory, there's merit to the idea: The plants would be owned by the city, and thus part of a future public-power infrastructure.

They came as a settlement in a lawsuit against William[S] Power Co., so they aren't supposed to cost much. And city officials say that when the plants are operational, the smoke-belching Mirant power plant will shut down, eliminating a major source of pollution in the city's most environmentally beleaguered region.

But the devil is in the details, and if the San Francisco Public Utilities Commission and the Board of Supervisors aren't careful, this could turn out to be the project from hell.

The power plants are known as combustion turbines, or CTs. In effect, they're just large jet engines. The city's owned them since 2003, but is only now figuring out how to get them up and running.
It's been a complicated process: Although the city paid no cash for the turbines, they need to be placed in a specially constructed facility, which needs special wiring and plumbing. The state was supposed to pay some of that cost, but now has backed down, leaving the city with an estimated $61.4 million tab.

The SFPUC's solution: Cut a deal with a Japanese outfit called JPower, which has agreed to put up the cash to build the facility if it gets to run it and sell the power for the next 13 years (30 years for the turbine that will run at the airport) The actual terms of the contract remain secret - although the city's Sunshine Ordinance clearly states that sole-source contracts like this one must be released to the public, the SFPUC hasn't responded to our public-records request for the documents. Which doesn't tend to instill confidence.

Then there's the Mirant issue. Community activists have been trying to shut down the plant for years, but the state won't allow it. State regulators insist that some generation capacity be sited in San Francisco, and they won't allow the plant to be shut down unless there's an alternative.

However, Mirant has a lucrative state contract to fulfill that capacity needs, and state officials have agreed in writing that if the CTs are on line, they will terminate the deal. That ought to give Mirant an economic incentive to turn off the switch - but the company hasn't made any promises and remains very vague about its future plans.

The politics of the plant siting are complicated, too. There's an Astroturf coalition, entirely sponsored by Pacific Gas and Electric Company, that opposes the plants and is claiming that they will add more fossil-fuel generation and noxious fumes to the southeast. A nonprofit called the Brightline Defense Project is suing to stop the plants, on behalf of the A. Philip Randolph Institute - and that organization received $135,000 in funding from PG&E over the past three years, $85,000 of it in 2006, according to PG&E's annual statement to the California Public Utilities Commission. PG&E doesn't want the competition from another energy provider - and really, really doesn't want the city to build power generation that could be used in an effort to create a municipal utility. So some of the most visible critics have little credibility.

On the other hand, some legitimate environmental justice advocates and some longtime residents of the neighborhood fear that the worst of all possible outcomes could happen - the CTs AND the Mirant plant could wind up operating at the same time. The CTs, also known as peakers, would generate less pollution that Mirant in part because they're designed to be operated only a few hours a day, during peak times of electricity demand. But the state license actually allows each plant to be run as much as 11 hours a day.