By Matthew Hirsch

With the governor's energy advisor at their side, Mayor Gavin Newsom and a team of city leaders announced Nov. 8 that within two years they would shutter San Francisco's polluting power plants – if all goes according to plan.

Although they've pledged to shut down the power plants before, this latest announcement by top city officials outlines a viable strategy for the first time. According to a plan worked out with state energy regulators, the city must install four smaller gas-fired plants it already owns to pave the way for the closure of the old Hunters Point and Potrero plants.

The city also has to wait until more than a dozen regional transmission projects are complete, but the deal hinges on installing the smaller power plants, which local officials were unwilling to do until state regulators promised to allow both the Hunters Point and Potrero plants to close. After reaching out to the governor, city leaders secured that promise in late October.

This energy plan puts San Francisco within reach of its ambitious goals for using mostly clean, renewable energy. But if the plan goes awry – if, for example, the city fires up its "peaker" power plants while the two older ones continue running – the entire city would feel the consequences for years to come.

Either way, at least San Francisco is finally taking seriously the air pollution in Bayview-Hunters Point and Potrero Hill. Under former mayor Willie Brown, taking on the power plants proved little more than an empty promise to placate an angry constituency in the southeast part of town.

All talk, no action

Brown's legacy looms over the city's plants like the toxic plume that hangs above their smokestacks, casting a dismal cloud over Bayview-Hunters Point. It was Brown, a onetime lobbyist for Pacific Gas and Electric Co., who in 1998 vowed to close the Hunters Point plant, and Bayview neighborhood activists blame him for its existence today.

As Brown's chosen successor, Newsom inherited the power plant problem Brown couldn't fix. Flanked by City Attorney Dennis Herrera, Sup. Sophie Maxwell, and San Francisco Public Utilities Commission general manager Susan Leal, Newsom proclaimed that he's found the solution.

"This announcement is long overdue," Newsom began, alluding to the city's past failure at confronting high rates of asthma, prostate cancer, and cervical cancer in the southeast neighborhoods, caused in part by pollution from the two plants. "For the first time, we have a commitment and a schedule to shut down San Francisco's existing dirty power plants."

To some nonprofit environmental leaders, the words sounded hauntingly reminiscent of Brown's empty promise made six years earlier, but there was something noticeably different this time around.

Unlike elected officials before them, Newsom and company weren't pretending they could shutter the power plants by executive order. (The California electric grid operator must first approve the shutdown. Then the companies that own each plant, PG&E and Mirant Corp., need to agree to close them.)

Instead, city leaders lined up support from people in Sacramento, including Gov. Arnold Schwarzenegger, who have considerably more influence over the decision than they do. And while the city's plan is fraught with risks that are beyond its control, city hall sources say it shows a determination to close the power plants where previously there was none.

No guarantee

Whether or not the city's action plan succeeds has more to do with decisions by state officials and the energy companies than anything city leaders do. This reality leads us to three obvious problems with the energy plan that have yet to be worked out.

First, there's the possibility that state officials will go back on their decision to support San Francisco's energy plan. The agreement is in writing, but it clearly states that nothing's guaranteed, especially if energy reserves two years from now continue to be as restricted as they are today.

That's what made California's deputy energy secretary Joe Desmond's visit here to show support for the energy plan so crucial. It was only after the governor's office became involved that the California grid operator agreed to allow the city's peaker power plant to replace all the old generators.

Once the state has signed off on closing the Hunters Point and Potrero plants, PG&E and Mirant still get the final say. Yes, even in this distorted regulatory system, the companies get to decide if their power plants stay open or close.

So far, PG&E has maintained it will close Hunters Point. Mirant, which is currently in bankruptcy court, has been the wild card. But Nov. 15, the Bay Guardian got word that Mirant had signed an agreement with Oakland-based Communities for a Better Environment that will support a financial incentive to close its largest Potrero power generator by 2007.

Notably, this agreement, which also markedly cuts pollution over the next two years, has Mirant surrendering most of its air emission credits to CBE. Without those credits, the cost of doing business after 2007 could dramatically increase for the company. That, CBE senior scientist Greg Karras told us, makes it more likely that the company will fold its Potrero business in two years – even though there's no guarantee.

The third major contingency, spelled out by the grid operator in an Oct. 27 letter to city leaders, has the action plan working perfectly. With just four peaker plants and neither of the older plants in operation, the city runs a greater risk of widespread power outages if the transmission lines go haywire. And if that happens, expect that there will be more than a few community activists banging down the doors of City Hall.

P.S. Sup. Tom Ammiano is eyeing the PG&E franchise fee as a possible way to help close the city's massive budget deficit. Through an agreement inked more than 60 years ago, PG&E pays the city a minuscule half percent of local sales for the privilege to operate its lucrative business here, while utilities around the country typically pay much more. On Nov. 16, Ammiano urged the Board of Supervisors to query Herrera on ways to increase PG&E's fee. The last time the supes considered such a move, Louise Renne (a staunch opponent of public power) was the city attorney, and she offered no help in the matter. Ammiano suspects Herrera might be more willing to go after PG&E.

E-mail Matthew Hirsch at matthew@sfbg.com.