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speaker.gif Cal-ISO totally changes tune on power plants

Oh my. For all you folks that have been following the controversy around building new power plants in San Francisco, it just got even better.

Mayor Gavin Newsom sent a letter to the Board of Supervisors today outlining a “more promising way forward than the current proposal” to build two natural gas-burning “peaking” power plants in the city.

The way forward: retrofit three existing diesel turbines at the Mirant-Potrero Power Plant, while at the same time shutting down Unit 3, the most polluting part of the power plant, as soon as the Transbay Cable comes online.

“On Friday, May 23, Ed Harrington [General Manager of the SFPUC], City Attorney Dennis Herrera and I met with president of Cal-ISO – Yakout Mansour, the chairman of the CPUC – Mike Peevey, the CEO of Mirant – Ed Muller, the CEO of PG&E – Bill Morrow, and our respective staffs. In this meeting we vetted the possibility of retrofitting the diesel turbines [currently owned and operated by Mirant] and asked each stakeholder to give us the necessary commitments to advance this alternative,” Newsom wrote to the Board.

For anyone who's been closely following the nuances of this argument, this is a significant change in position from the California Independent System Operator [Cal-ISO], and it should be noted that it took -- not just the Mayor sitting down at the table -- but top dogs from PG&E and Mirant (who both stand to lose money by the city building its own power plants), as well as the CPUC's Peevey, who's never expressed a positive opinion about the true need for more power plants in the city.

Now, suddenly, Cal-ISO is departing significantly from all previously expressed demands that we build power plants.

The background: The state, through Cal-ISO, has for the last several years insisted that San Francisco needs 150 megawatts of peak electricity at the ready. We currently get this from Mirant-Potrero, but Unit 3 of that facility has a bad rep as the greatest single source of pollution in the city. People in the Bayview neighborhood, which have carried more of their fair share of pollution, have been waiting a long time for the plant to close. Stakeholders have been meeting for over seven years, working on ways to close the plant, and much of the leadership on the issue has come from Sup. Sophie Maxwell, who represents the Bayview district.

Cal-ISO has insisted that the only way to close Unit 3 is to build new peakers, which would be owned and operated by the city, run cleaner and more efficiently, and still supply that 150 MW of peak power. Even when the 400 MW Transbay Cable was approved, Cal-ISO insisted San Francisco would still need the peakers.

But in a June 2 letter, Cal-ISO suddenly had a different response for the Mayor.

“When Transbay Cable comes on line, the Mirant retrofits do not have to be in service for the CAISO to remove the RMR [Reliability Must Run] status from Potrero Unit 3. This is true even though the Mirant diesel units will have to be retrofitted one at a time, and work will have to be carefully phased," Cal-ISO's president, Yakout Mansour, wrote to the Mayor.

He also said we didn't need to build an additional 50 MW peaker at the airport – at all.

Though the need to build both the in-city plant (with three combustion turbines [CTs] equaling 150 MW) and the airport plant (with one CT generating 50 MW) has been repeatedly questioned by the SFPUC, they've always received the same answer. Yes – all four CTs are needed.

The SFPUC's Tony Winnicker told me he didn't know why things have changed. “Cal-ISO has consistently said in writing, in verbal instructions, and at meetings, that the CTs are the only specific project that was sufficient to remove the RMR from Mirant.”

He also said that the retrofit idea wasn't necessarily new, but that Cal-ISO was “not initially enthusiastic about it” when it came up in the past.

I asked Winnicker if he thought the Mayor's office played a role in the shift. “Every time they've stepped in on this project there's been a significant leap forward,” he said, pointing to an example last October, when the Mayor's Office of Workforce Development was able to secure a solid, written agreement from Mirant that they would close if the RMR was removed from Unit 3. In the past, there had only been verbal agreement.

Sup. Sophie Maxwell expressed frustration when I spoke to her after today's BOS hearing -- that the questions she, her staff, and other stakeholders have been asking for the last several years are suddenly getting different answers. “I think we're seeing a big movement by the Cal-ISO. This is huge. Before, we asked all these questions they weren't saying what they're saying now,” she said.

When asked why she thought this was happening now, she simply pointed to PG&E. “Who stands to benefit from us not generating our own power? Who sent out all that stuff?” She asked, referring to the fliers depicting filthy power plants that PG&E has been mailing to residents in an effort to drum up public sentiment against the peakers. “Have they been concerned about what's clean, about our people?”

To that end, why does PG&E support the Mirant retrofit if they're so against the city's peakers for environmental reasons -- which is what they state in their mailers and on their website?

Is there really a difference between the peakers and the retrofit? Megawatts are megawatts – the Bayview is still going to have a fossil-fuel burning power plant in its midst. Now, a private company, Mirant, will continue to own and operate it, rather than the city.

The argument could be made that the city is saving $250 million we would have spent building the peakers, but the Cal-ISO has said the $50 to 70 million cost to retrofit Mirant (which some have said is a low-balled figure) could be passed on to ratepayers (ahem, you.) So, in the end you'll pay for it, but you won't own it – Mirant will.

Other real questions remain. Though the Mayor asserts in his letter that the retrofits will be cleaner than the peakers the city was going to build, he bases this on the assurance that the old diesels will now have “best available controls technology.” The same assertion was made of the city's peakers, which are about 30 years younger than the diesels. Winnicker said the SFPUC is currently gathering a more specific emissions analysis of the retrofitted diesels.

And what really motivated this shift? We know, from documents SFBG received through a public records request, that the retrofit idea was pushed by SFPUC commissioners Dick Sklar and David Hochschild, and that it didn't really get much movement until seven PG&E staffers – including VP Nancy McFadden, had a sit-down in the Mayor's office on May 5 to discuss their opposition to the peakers and their alternatives. And the last meeting, on May 23, included PG&E's CEO.

For now, the BOS has continued the issue until a July 15 hearing, while more solid numbers and answers are pulled together. Maxwell also introduced a resolution today urging SFPUC to give Cal-ISO a transmission-only solution for consideration (which would mean no power plants at all.) It would also establish strict cleanliness criteria for any in-city power plants, should they continue to be a part of the city's future.

You can read letters from the Mayor, Cal-ISO, and Mirant here.

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Comments (2)

Eric Brooks:

Cal ISO Didn't Change It's Tune On Anything & Had Never Said Peakers Were Necessary -

All at the SF Guardian. We in the environmental and environmental justice movement who oppose the peakers have been vociferously stating for the last year that Cal ISO never once said that the Peakers were required to shut down Mirant.

What the Cal ISO said in response to the SFPUC staff's purposefully manipulative queries, was that 'Under the current Action Plan' the peakers were required to meet reliability. The Cal ISO also said repeatedly however that it had never been approached by the City with a -different- action plan; and that this was always its stated reason for simply reiterating the 'need' for the Peaker project. The SFPUC staff had its bureaucratic little heart stuck on their hopelessly archaic seven year old action plan, and so repeatedly asked insidiously leading questions that they knew would get the deceptive answers that they wanted -based- on that outdated action plan.

Indeed, as I revealed to you at the Guardian, and as you unacceptably failed to report, (because it rather inconveniently didn't fit into your fairy tale conspiracy theory coverage about PG&E's involvement in this issue) was that Barbara Hale and other staff at the SFPUC even took part in writing at least one of those supposedly independent letters from the Cal ISO stating that the peakers were necessary.

So what was actually going on in real life, is that SFPUC staff were purposely asking manipulative questions of the Cal ISO and then actively co-writing the Cal ISO's responses in order to unethically present to the public and the Board Supervisors a picture of the Peakers situation that was -completely- false so they could build their pet fossil fuel power plant project.

It is therefore no surprise whatsoever, that as soon as someone -else- asked questions of the Cal ISO that were actually designed to get at the truth; that the Cal ISO immediately made clear that the peakers were completely unnecessary.

The fact that your newspaper repeatedly failed to get this aspect of the story right, is a reflection of very poor journalism guided by an ideological bent, instead of a pure search for truth.

I'm all for going after PG&E with a vengeance and kicking it out of town, but not at the expense of truth, and to the very real detriment of the Bayview Hunters Point residents. Residents who have been saying almost unanimously for the last decade that the peakers would be an unnecessary and unwanted poison in their neighborhood.

Next time, you need to do better; instead of tilting at every PG&E windmill that presents itself (just because it's an attractive target), when the real story of electricity and abused utility agency power in San Francisco goes much deeper.

I still respect the SF Guardian, but y'all have lost a -lot- of credibility with me over this past year...

peace

Eric Brooks

Jack Sawyer:

Whoa Eric...what a great response. While I can't speak to whether or not the SFPUC co-wrote the Cal ISO's response to their "purposely manipulative" questions (I'll take your word for it), I can speak a little bit about SF Peninsula and overall electrical reliability.

First of all, a basic principal: Electricity is the only commodity that is produced, transmitted and consumed in the same instant in time. Constant balance of electrical supply and demand must be maintained. Ideally, generation supply is placed strategically nearby the areas of largest demand, or the "load centers". Without going into details, it provides for the greatest level of electrical reliability from an engineering perspective (and I'm not an engineer). Second, electricity is not produced out of thin air (windmills notwithstanding). It's made by generators: Conventional thermal (steam turbines from boilers heated by natural gas), geothermal, cogeneration (steam is produced as a byproduct of a manufacturing process, for example) combustion turbines ("peakers" that use jet fuel or diesel), hydro, nuclear, renewable resources (wind, solar). The San Francisco Peninsula is geographically limited in the type of generation that can be placed there. It's pretty much limited to conventional, cogeneration and combustion turbine generation with potentially a little wind and/or solar mixed in. No one on the San Francisco Peninsula wants a generating plant of any kind anywhere near them. You've heard of NIMBY, right? Not In My Back Yard? Well, people in California and, apparently, particularly in San Francisco, apply the BANANA principle. That stands for Build Absolutely Nothing Anywhere Near Anything.

While the ISO is responsible for overall ISO controlled grid reliability, PG&E and the ISO together are responsible for San Francisco Peninsula reliability. PG&E owns and physically operates that portion of the grid at all voltage levels; the customers served off of that portion of the grid are PG&E's. From a purely interconnected grid reliability perspective, whether San Francisco is connected to the grid or not has virtually no impact. The city could, electrically speaking, fall off the face of the earth and the interconnected grid would continue to operate reliably...maybe even more reliably without that 900MW or so of load hanging off that portion of the system that is the SF peninsula (it is also an electrical peninsula). The ISO has invested significant time and resources explaining ad nauseum to the SFPUC, the Mayor and SF-area customer advocacy groups the reliability risks associated with decommissioning all of the peninsula generation. If San Francisco and PG&E want to assume that risk, frankly, it should be their business.

It's not that the SF peninsula couldn't survive electrically on a day-to-day basis without the generation because the transmission system is fairly robust, but there is significant risk both post-contingency (i.e., sudden onset events, such as an airplane taking out all those lines that run together across the 101) and when accommodating scheduled and forced line and equipment outages for routine work, maintenance and system upgrades.

Alternatively, PG&E could install enough special protection and remedial action schemes, all of which result in the automatic shedding of electrical customer load, to maintain post-contingency area grid integrity and meet established reliability requirements for virtually any system condition. Unfortunately (or perhaps fortunately), one of the principal reliability criteria is thou shalt not put any customers in the dark as a result of a single contingency. The electrical engineering that goes into this is astonishing; the general public has no idea whatsoever of the reliability criteria utilities must adhere to. And therein lies the risk. Without a certain amount of in-area generation (refer to basics above) or significant additional transmission infrastructure supplying the area, the alternative is that continuous electrical service to customers will be at risk post-contingency, plain and simple. The ISO's concerns should focus on maintaining bulk electric system integrity, not continuity of service to end-use customers. I mean, the SFPUC and customer/public advocacy groups don't seem to give a crap about it, so why should the ISO or PG&E?

There's an old facetiously and apathetically stated utility expression: "Let 'em freeze in the dark". It's the result of years and years of utility workers' collective hard work to accomplish their prime directive of "keeping the lights on" through any and all system conditions, and the collective customers' general lack of appreciation for that effort. The first time the San Francisco Peninsula goes dark because all of the dirty nasty generators have been shut down and there's a major system event, where will the finger be pointed? Undoubtedly (and inappropriately) at PG&E and the ISO. The fault should lie directly on the shoulders of the SFPUC, the Mayor, and the misguided (on this subject anyway) advocacy groups.

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