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Potrero poison
An out-of-state energy company is pushing San Francisco to accept a new, environmentally disastrous power plant – but it will only make the city's energy situation worse.

By Rachel Brahinsky

MICHAEL CARROLL STEPPED up to the podium and turned to face a panel of government commissioners. It was a blustery March afternoon, and through the long wall of windows on one side of the Pier 1 conference room the San Francisco Bay was visible, stewing furiously as the wind whipped through it.

Carroll, a thickset attorney in a neat gray suit, pulled out his testimony and calmly made his case to the Bay Conservation and Development Commission (BCDC), the body that enforces the laws protecting the bay. His goal was to convince the commissioners, who represent cities and counties around the bay, that his client, the Mirant Corp., should be allowed to build a massive new power plant and that it would not harm the water or the fish that live in it.

"You are both a conservation and a development commission," Carroll said. But because of the "important need for this project," he urged the commission to keep its "development hat in place."

Carroll's pitch was the latest salvo in Mirant's two-and-a half-year effort to convince the state to approve a new generating plant in Potrero Hill, on the same site where the company already runs several smaller plants.

The debate over the plant has been long and often arduous. The social and environmental costs of energy generation in the heart of a densely populated city have been significant. The predominantly African American community living near Mirant's power plants has long suspected that its disproportionately high rates of asthma, cardiopulmonary disease, and cancers are tied in part to pollution from the plants.

And yet, the pressing need for power-grid stability has compelled even some environmentalists to support Mirant's plan. Pollution and public health have sometimes taken a backseat to the need to keep city residents from facing energy crisis-style blackouts and rate hikes.

Mirant has argued that two birds could be killed at once: with the new plant in place, the argument goes, the state would allow the closure of the outdated, dirty-power plants run by Mirant and Pacific Gas and Electric Co. at Potrero and Hunters Point. And the city grid, which has long created nightmares for energy regulators, would be stabilized.

At the March 7 BCDC meeting Carroll used that argument repeatedly, noting the "critical need" for the project.

But now, just months before the California Energy Commission (CEC) is expected to give Mirant the green light to build, new evidence has emerged that shows Mirant has engineered a power plant so flawed that it would become a net liability for the city. Despite Carroll's insistence that the new plant could potentially replace the old ones, evidence shows it would be so vulnerable to breakdowns that the antiquated generators nearby might be forced to stay open – otherwise the system would be less secure than it is now.

What's more, the comprehensive energy plan currently being drafted by the city shows what renewable-energy advocates have argued for years: San Francisco can close the old plants, can avoid building Mirant's plant, and still have a reliable energy system.

Polluted property

The site Mirant has chosen for its power plant – a property situated near the intersection of 22nd and Illinois Streets – has already withstood more than a century of environmental damage.

Back in the 1850s Potrero Point was an extension of the Potrero Hills, a series of craggy cliffs fingering out into the San Francisco Bay. The point was accessible only by a narrow footpath or by wading through the bay. At that time there was one business venture on the point: a gunpowder magazine, or storage shed, for explosives.

That's according to a confidential historical assessment of the area's environmental legacy that was prepared by an outside consultant at the request of PG&E's legal department and recently obtained by the Bay Guardian. The report was completed in September 1998, just months before PG&E sold the power plant to Mirant, no doubt in an effort to scope out what the company's environmental liabilities might be.

By the turn of the 20th century, PG&E's research shows, the point had been transformed. The hills were graded and leveled, and the submerged land in between was filled with dirt, earthquake debris, and abandoned ships. What once was a "point" had become a bayside industrial lowland. The first business enterprise there, just a few blocks from where the red smokestack of Mirant's Potrero Hill power plant is today, was Pacific Rolling Mills, an iron and steel foundry that became a cornerstone of the Bay Area's quickly growing shipbuilding and rail industries.

The mills were enormous. An estimated 80 furnaces, forges, coke ovens, and gas manufacturers produced and burned massive amounts of fuel – including coal, charcoal, coke, gas, and oil – to make train tracks and parts for ships.

Beginning in about 1910, PG&E generated power at the foot of 22nd Street. Over time shipbuilders, a sugar refinery, and the U.S. Navy all converged on the area, making it the center of San Francisco's industrial activity.

PG&E's research shows that each enterprise had its share of environmental mishaps. Naval ship repairer Southwest Marine, for example, was the subject of a complaint filed with the state alleging that the company illegally stored as many as 200 leaking barrels loaded with "unknown oily contents" and electrical transformers that may have contained polychlorinated biphenyls, or PCBs. PCBs are a family of toxins that can cling to soil particles for hundreds of years and are classified as carcinogenic by the federal Environmental Protection Agency.

Remnants of each industrial age were deserted, buried in the soil, or tossed into bay waters, the report shows. In 1997 a city environmental assessment described the area as contaminated with "landfill materials, illegally stored waste ... USTs [underground storage tanks], ... [and] abandoned wastes."

Although much of this is well known to insiders, few members of the public are cognizant of the toxic stew that sits beneath the power plant today. But if approval to build the new plant comes as anticipated, residents of the surrounding neighborhoods and workers employed by the company will have to deal with any impacts of dredging up soils tainted with toxic chemicals.

According to the CEC's 848-page appraisal of the project, issued in February, a host of toxins linger throughout the site. CEC investigators summarize the problem thusly: "Sitewide issues included contamination of soils and groundwater ... tank and drum storage on unpaved areas ... and a possible 1988 asbestos release."

Testing in 1998 revealed copper, lead, and nickel in the soil "at levels exceeding regulatory limits for hazardous waste," the CEC document shows. Deep in the ground, volatile organic compounds, including benzene, were found. Cyanide, PCBs, and polycyclic aromatic hydrocarbons (PAHs) were identified throughout the property. All are poison to humans and sea life.

At the very least, digging in the area will disturb some of these chemicals, though the CEC report says the state is confident that Mirant will follow appropriate safety procedures.

In the groundwater other remnants of the site's industrial past remain, according to the CEC: in addition to petroleum hydrocarbons and other telltale signs of fossil fuel consumption, "barium, chromium, lead, mercury, and selenium were detected at concentrations exceeding regulatory thresholds for hazardous waste classification in at least one well." In offshore sediments, more PAHs were found.

Today the power plant continues to pollute the site. The CEC's report shows signs of recent fuel-oil spills and more of the same chemicals – the toxic remnants of combustion.

Yet environmental regulators insist that construction on the site poses no real health threat.

"There's nothing screaming as being a major problem on-site," Vic Pal, a project manager and engineer at the San Francisco Regional Water Quality Control Board, told us. The water board and the state's Department of Toxic Substances Control (DTSC) are responsible for testing Potrero's water and soil and reporting back to the CEC. "There may be some hits here and there ... but it's not dangerous in summation," he said.

Indeed, the CEC report argues that "procedures will be developed to reduce the quantity of hazardous wastes generated." But Pal admitted his agency is not infallible. "There may be unknown conditions. Recently they found there was an area of the site that was not fully investigated," he said.

And he may have been smart to hedge his comments. Back in 1999, in a gaffe that will long be remembered by environmental watchdogs, DTSC certified soil that was dredged up in the construction of the Pacific Bell Ball Park as clean. Later some 18,000 cubic yards of the soil was found to have been contaminated with lead, according to press reports. At least a hundred tons of it, which had already been hauled to the Alameda landfill, had to be redug and transported across the state to a hazardous-waste landfill in Kettleman Hills.

Neither Pal, Mirant, nor PG&E – which is responsible for much of the cleanup as the site's former owner – can say exactly what will be disturbed if the new plant is constructed.

The reason is this: in March 2002, two and a half years after Mirant first officially announced its intention to expand power generation on the site – and only months before the state is expected to let the corporation begin building – the project design is completely up in the air.

Greg Karras, a senior scientist with the Oakland-based environmental group Communities for a Better Environment (CBE), has monitored the site for some time. He told us it's frustrating to watch the project head toward approval when there are so many open questions. "These are toxic chemicals," he said. "They would say they would contain it, and no doubt they would make great efforts toward that. But we don't have a site design yet, so we don't really know what's going to be excavated for sure. It's a discussion we should have in full before the public, before the project is approved and after we know what the design is."

Millions of dead fish

In part the issue goes back to Mirant attorney Carroll's appeal to BCDC commissioners earlier this month.

Carroll's goal was to win approval for a key part of the power plant design. As proposed, the plant would be large enough to generate electricity to meet more than half of the city's needs. It would put out 540 megawatts, more than any single power source ever built in the city. To keep the giant machine running well, Mirant hopes to take advantage of the proximity of the bay – using a cooling system that would suck in 158,000 gallons of bay water every minute, according to the CEC.

A BCDC staff analysis shows that each year the system would slurp up a full third of the water in the south bay, which includes everything south of the Bay Bridge. After cooling down the power plant, the water would be flushed back into the bay at higher-than-normal temperatures.

Mirant's own tests show that more than 500 million fish larvae, millions of plankton, and millions of microscopic animals would be wiped out each year the plant operates. This is expected to impact food sources for harbor seals, pelicans, and other bay animals.

A similar cooling system (but with older technology), used by the PG&E National Energy Group on a Somerset, Mass., power plant, was blamed by the EPA this month for eviscerating local fish stocks.

Still, Carroll argued that the impacts would be minimal. But in a severe blow to the company's efforts, BCDC found that there are other alternatives that could have less of an environmental impact and affirmed the finding in a unanimous March 21 vote.

And there's another design flaw, which may be even more serious, and which cuts to the heart of the debate over whether the plant should move ahead at all.

To understand its implications, you need to go back to 1998, when city residents fought and won an agreement to close down PG&E's Hunters Point power plant, the oldest of the city's plants.

Since then the state has insisted on keeping the aging generator open because of an energy grid problem unique to San Francisco. The existing power grid, built and maintained over the past century by PG&E, is unstable. There's a single transmission route that carries power up the peninsula into town, and it can only support about 60 percent of the power the city uses. To keep the lights on, the city must generate electricity within its boundaries, unless more transmission lines are built.

For about 40 years the two existing fossil fuel-burning plants, a mile apart along the waterfront, have supported that need.

But as the plants aged, they became less efficient and belched pollution daily into two residential neighborhoods. Eventually public pressure was such that anyone who would support keeping the dirty power running was a political pariah.

So when Mirant offered to develop a new plant, built on modern design principles, and when city and state energy planners said the new plant would likely allow the city to close the old ones, many were relieved.

But just a few weeks ago, in a tiny footnote of the state appraisal of the project, the CEC revealed a bombshell. A key feature of the design was so bad that the old plants might have to remain open to support the system safely.

The problem is that the plant's two turbines, which produce the electricity, depend on shared auxiliary parts to keep running. So if an accident, or even planned maintenance, forced workers to take down the auxiliary components, both turbines would cease to move. That means no power is produced in the city at all.

The design is not unique to San Francisco, but since energy stability is the primary concern here, it represents a flaw that could be fatal to the system. A common alternative is to install a bypass system so that each turbine can function independently.

A spokesperson for the state power-grid operator, Cal-ISO, told us the state is still assessing how the project would fit in with the larger energy grid. The agency, which has the last word on whether the plants stay open, won't officially declare its position, but several city officials report that Cal-ISO has told them that if the Mirant plant is built as currently designed, the state would probably be forced to keep at least one of the old dirty generators open.

The problem is backup electricity. "The largest plant is the basis for the assumption regarding what could happen in an emergency. [The ISO] says we have to assume that can happen," said San Francisco deputy city attorney Jackie Minor, one of the city attorney's main representatives watching the project. In other words, if all of the city's local generation was resting on one plant, and one problem could shut down that entire plant, then other plants would have to be available for backup.

Still, Minor was optimistic. "We believe [that] everybody politically understands Hunters Point has to shut down. I don't have a question in my mind about it, because the mayor has a very firm agreement that it will shut down, and the ISO seems to be very much in support of that."

But longtime advocates remember what happened in 1998: "Even when we had a binding agreement on closing Hunters Point, it didn't happen," CBE's Karras said. "It's not the city's decision."

Which means the future of the Hunters Point plant could hinge on Mirant's willingness to redesign it.

Mirant representatives wouldn't respond to our questions on the subject. But Ed Smeloff, the San Francisco Public Utilities Commission's assistant general manager for power policy, said Mirant has not yet actively moved to make the necessary changes. "We learned about it maybe six weeks ago," he said. "I had simply assumed they would design the plant so there would be redundancy and you could operate [the turbines separately]. They keep on saying we're open to redesign, but they haven't stated under what conditions they can do that."

Indeed, publicly the company continues to insist the plant is needed for reliability – even though the state says the proposed generator, as designed, would be a liability instead.

Sour taste

Residents who blame the two aging plants for a wide range of health problems find it hard to understand why nobody noticed this problem two years ago.

Take Marcia Sims. At age 50, Sims told us she's seen several family members die from cancer, including two siblings and both of her parents. Sims was diagnosed with acute asthma at age 30, 10 years after moving to the Potrero Hill housing projects.

The projects, a collection of pastel-colored, rectangular cement structures originally built as military housing, sit on the eastern side of Potrero Hill, overlooking the power plant.

Potrero residents, Sims said, are often sick: "What's it from? Is it in the water? I think it's from the power plant." Sims said the remnants of air pollution are palpable near her home, all the way up the hill. "Your mouth is sour inside all the time. You have a sour taste, and you're constantly drinking soda or water or whatever. You can see it, too." she said.

Residents like Sims have long blamed the industrial projects in the neighborhood for their myriad health problems – in addition to the power plants, there's the naval shipyard and a sewage-treatment plant, as well as two major freeways. In the past, though scientists could pin power-plant emissions to asthma and heart disease, they were unable to make the definitive link to cancer.

But an American Medical Association study published March 6 connected particulate matter – the main pollutant that comes from the smokestacks of gas-fired power plants – to cancer in the nation's first major study on the question. "Long-term exposure to combustion-related fine particulate air pollution is an important environmental risk factor for cardiopulmonary and lung cancer mortality," the study found.

The particulate pollution named in the study will double if the new power plant is built, according to a CBE analysis. And there will be other environmental impacts: the current proposal, for example, calls for installing two 20,000-gallon ammonia storage tanks. Short-term contact with ammonia can cause death or injury, and the storage tanks would make up the city's largest hazardous-waste site.

But there could be relief for Sims and other residents in the form of the city's draft energy plan, which shows that nobody has to make that choice. The plan largely mirrors the proposals outlined by the Bay Guardian in "The Green Choice" (9/26/01) and by CBE in its November 2001 report, "Power and Justice."

The plan's authors don't exactly spell it out – and if anything, they're overly cautious. But a close read shows the city could eliminate the need for the behemoth Mirant plant and could retire the Hunters Point plant by 2005.

"The city's approach is to develop a more self-sufficient, clean, distributed energy infrastructure," the plan says. Energy efficiency and solar power would be pursued aggressively.

The city's Hetch Hetchy power system, which currently only meets about a quarter of the city's needs, would be significantly upgraded with wind power and new hydroelectric turbines. New transmission would be built to bring in more power and make the system safer in case of natural disasters or major accidents.

The plan calls for refurbishing the old unit at Potrero to conform to modern pollution standards but only using it for backup power. Medium-size gas-fired plants – about 50 megawatts in size – and small 1-megawatt generators of various types would be built throughout the city.

As the official word of the San Francisco Department of the Environment and the SFPUC, the proposal could have some influence in the state's energy planning process. To make that happen, the public must urge the Board of Supervisors to adopt these aspects of the energy plan, which includes other proposals as well.

Sims told us an alternative-energy plan has her support. "Mirant says we need this," she said. "Well, if you want it so bad, put it in your backyard. It's a money thing for those people; it's a health issue for us. I want them to take it away. I want them to stop lying."

Mirant won't talk

How does Mirant – a Georgia-based company named in several lawsuits for unfair business practices – respond?

So far the company has made no visible sign of backing down – on pushing for approval to build the plant or on changing the design to make it fit in with the community's needs. But it's not all smooth sailing for Mirant.

Lately city officials have been publicly questioning the company's ability to carry out the project. Over the past year, in the wake of the PG&E and Enron bankruptcies, Mirant's credit rating has been severely downgraded. A press release on the company Web site says it's concerned about the hostile climate in California for expanding its business. The BCDC vote was also a major blow.

San Francisco officials don't oppose the plant outright, noting that they are working with the company to exact a redesign. But top energy planners do recommend, in the city's draft energy plan, that the plant should be opposed unless the design is completely revamped.

"We're listening to the community right now, and a lot of people in the community are proposing this [alternative-energy] idea," the SFPUC's Smeloff said. "If we took this to the CEC, it would be decisive. If the mayor and the Board of Supervisors said this is how we want to shape our future, it would be very hard for the state to license this plant."

An essential component in fulfilling the alternative-energy mandate, Smeloff said, would be creating a public power system in the city. That way the city would control where the power came from and where it went.

That sort of solution might satisfy advocates like Karras, who say they won't put up with backroom planning on the city's energy policy. He urged the city to take this bigger step, toward codifying its alternative-energy vision into law and moving forward.

At stake: the next 40 years of public health and environmental justice on the waterfront.

"I think the city's in good faith," Karras said. "I'm willing to be convinced. But it is a big question. As the Hunters Point debacle shows, how do you guarantee that something gets closed?"

The public can submit comments on the city's energy plan at www.sfenvironment.org.

E-mail Rachel Brahinsky at rachel@sfbg.com.