Mike Martin, who's been handling the project for the SFPUC, said of the retrofit, “We’re thinking of this as a bridge to the future where we don’t need any fossil fuel generation,” predicting that bridge would only last five to seven years.

But Loretta Lynch, former president of the California Public Utilities Commission, scoffed at that argument during public comment and called on the Mayor and PUC to find any examples of retrofit power plants that only operated for a few years.

But we're getting ahead of all sorts of brilliant exchange between the supervisors, the SFPUC, Mirant, and the Mayor's office.

Prior to public comment, the hearing revealed that the retrofit would be on a grandfathered plant exempt from permitting and operations regulations that have any authority similar to the California Energy Commission.

Martin suggested the city would have a legal agreement with Mirant for liquidated damages for not meeting 97 percent emissions reduction, but Peskin called that “ridiculous on its face” because “If you want to build a power plant today you are subject to an incredible number of analyses, legal oversight, enforcement by the state of California, but because that act was passed some 20 years ago it doesn't apply to this plant that was built 32 years ago. And so all of these things, all of their promises are not part of a regulatory scheme. And, let's be honest, we don't have here locally the bureaucratic infrastructure or the level of knowledge...we don't have the local regulatory resources.”

Maxwell interjected to point out, somewhat tongue in cheek, that according to the SFPUC, a bevy of city and regional organizations like Bay Area Air Quality Management District, Regional Water Quality Control Board, BOS, and other city agencies would be part of a plant oversight committee. “Of course, we cannot coordinate to walk across the street together, but we would...be the group to have the oversight,” she said.

Peskin went on to criticize the SFPUC for its failure to adequately vet the CH2M Hill feasibility study of the Mirant retrofit idea. Speaking to Martin, who authored a Sept. 22 letter [PDF]with responses to questions raised by Maxwell and Peskin at a prior Aug. 11 hearing, “Many, maybe not all, but many of the answers are simply Mirant has provided the following response..."

"I guess what I'm disappointed in my own city agency is that you haven't gone out and done what we're about to do now with these experts who Supervisor Maxwell has brought from around the country....I guess my disappoint is that you're -- excuse the word -- you're regurgitating Mirant's responses rather than going out and finding gentlemen like this and saying, 'Wait a minute, 97 percent? You're blowing particulate matter up our skirts.'”

Martin countered that they did reach out to their consultant, Steve Brock of PB Power, who indicated to the SFPUC that he had never seen the kinds of emissions reductions proposed for the retrofit and hasn't been able to find another example.

The hearing, and Martin's letter, made clear that a retrofit of these kinds of engines had never before achieved the scale of emissions reductions called for by Mayor Newsom. At best, similar retrofits had NOX emissions of 9 parts per million (ppm) whereas the Mirant retrofit must achieve at least the city CTs level of 2 ppm. The SFPUC didn't verify information from Mirant about similar retrofits at four other power plant sites, but Martin wrote that a plant in Escondido which had been retrofitted was eventually replaced with the same combustion turbines that the city had originally proposed to build. And, he admitted, “I have not talked to any experts who have told me it can be done.”

To this, Maxwell expressed frustration. “All the information that we collected on the CTs, we had conclusive information. And now we come here and there's nothing conclusive, nothing that we can really look into,” she said. “And we're part of the regulatory body that you say is going to be overseeing the retrofit, but we're not even getting enough information so how can we know we're going to get this information from you that we need to regulate.”

Peskin characterized the Mirant retrofit as unworkable and the SFPUC as stuck having to prop it up for political reasons. “Let's be honest. You've been handed an untenable negotiation to preside over and you're supposed to make it work and I understand that's your job....I want you to do your job to the best of your ability and not be complicit in the unfortunate political dynamic that's taking place at City Hall. We know the political landscape. PG&E didn't like the CTS. They did their business there. The Mayor's office quickly came to the conclusion that they needed an alternative. Mirant came along and said, 'Boy, do we have a deal for you.'”

What's in it for Mirant? Well, it's a utility company, not a real estate developer, which would be the next fate for the 27-acre site were the plant to finally close. And, as Lynch told the Guardian after the hearing, “They’ll [California Independent System Operator] will give a Reliability Must Run (RMR) contract to Mirant with platinum prices. It’s a remnant from deregulation. From my point of view those kinds of contracts should be outlawed.” And, she pointed out, ratepayers finance those RMR contracts. “It’s a boondoggle, sweetheart deal.”

If the city were to move forward with building its own power plant, an RMR contract with Cal-ISO is a possibility that would need to be explored, Barbara Hale, the SFPUC's head of the Power Enterprise, told the Guardian. According to Hale, RMR contracts are typically granted when there isn't another buyer for the power. “ PG&E wouldn't contract with us,” she pointed out of the city's CTs.

The CTs weren't really the thrust of Wednesday's hearing, but the prior power plant plan provided a point of comparison for the retrofit.

Even when it came to the issue of cost, Maxwell pointed out that the city's plan had estimated $1 million for permitting expenses, but Mirant suggested $500,000. “If you ask me what I think, I think it's going to be more than $500,000,” Martin admitted, which raised more ire with Maxwell.

“If part of the reason we're going down this road is cost and there's no basis for this cost,” she said of that particular line item, that made the project even more questionable. She underscored that she was more preoccupied with people's health than the plant's pricetag, which segued into a discussion of exactly how pollution would be monitored.

Mirant has proposed a “predictive emissions monitoring” system (PEMS), which is cheaper and doesn't actually measure real emissions but makes educated guesses based on past data. “Continuous emissions monitoring” systems (CEMS) are installed directly into the stack and typically provide hourly numbers on what's spewing out.

Bruce Schaller, president of Sega, Inc., a utility company that has expressed interest in designing and building the city's CT project, told the committee that PEMS aren't typically installed with the SCR technology that's being proposed for the Mirant retrofit and added that with this project and the level of emissions reductions being called for, continuous monitoring “would be prudent.” He also outlined several reasons why he thought the $80 million pricetag was too low.

Sega's air quality expert, Brian Petermann, who has spent 27 years in the field of building and retrofitting power plants, also testified and cautioned the city against the retrofit. Asked to view the proposal from the perspective of the CEC, he said, “I'd have to conclude it's not a legitimate project.”

He added, “I would recommend that they not propose 97 percent reduction [of emissions.] That's a level you don't want to go near.” He further urged against predictive emissions monitoring with SCR technology because “SCR is very complicated and a lot of things can go wrong.” He said part of emissions reduction has to do with adding ammonia as a catalyst, which combines with the NOX pollutants and turns it into less harmful nitrogen. The more ammonia you add, the more you can reduce the NOX, but that means a lot of ammonia tends to “slip” out (called “ammonia slip.”) “The problem with excess ammonia emissions is it combines with other elements in the atmosphere and forms particulate, PM10,” he said, which is easier to inhale and more harmful to human health.

In short, trying to reduce NOX emissions by dumping on the ammonia can actually create more harmful pollution, all of which can slip under the wire with predictive emissions monitoring but can be more closely regulated and refined with continuous monitoring.

Petermann also likened the SCR technology to “putting a cork in the tailpipe” to slow down emissions, and it actually requires the plant to burn more fuel to maintain output, which makes it less efficient overall. “They're saying 2.5 ppm,” Petermann said of the retrofit emissions target, “At the expense of efficiency.”

Maxwell then called on Tom Flagg, a representative from Turner Envirologic, which sells energy products like SCRs, which he likened to giant catalytic converters. In the case of Mirant, he said to achieve such low emissions reductions would require an SCR of a size he's never seen, sold, or could even seem to imagine. “Theoretically, it would be possible but I don't think anyone would build that kind of equipment,” Flagg said as he showed the supervisors an image of a typical SCR and described it as at least as big as the City Hall hearing room. “I've talked with a catalyst manufacturer and they wouldn't touch it,” he said of the Mirant project. “The company I represent would not bid on a 97 percent reduction. I don't think we could find a catalyst manufacturer who could provide that kind of equipment.”

The supervisors then asked Mirant's two representatives at the hearing to explain how they expected to meet those emissions targets. “The only thing that leads me to believe that is we had vendors who would say they could meet that under contract,” said senior project manager Jeff Henderson. He cited ESI as one company that supplied data for the CH2M Hill study. He didn't know if it had ever been done before.

As for the pollution control, Henderson said they'd been advised to use PEMS over CEMS because the continuous monitoring requires that the plant be operated and tested monthly and that might drive the plant to operate just to be tested, thus polluting more. The Mirant retrofit is predicted to operate for 156 hours in the CH2M Hill study, though its permitted to run 877 hours and Cal-ISO has said they won't reduce that for energy reliability reasons.

Part of the pollution argument has hinged on Mirant's plant running less than the city's CTs, so even if they pollute more they'll be operated less, resulting in a net reduction of emissions. However, in 2001 the city sued Mirant for operating as many as 1,600 hours. The city won the suit.

At the end of the hearing, Newsom's director of government affairs, Nancy Kirshner-Rodriguez, got up to say a few words. “Right now we are in a process,” she started.

Maxwell cut in, “You have not had any process,” she said. “We knew nothing about this,” she said.

“This is the biggest behind closed doors deal in my eight years of office,” added Peskin.

Maxwell went on to outline the seven years she, community members, city staff, and other stakeholders put into the city's CT project that was ultimately undercut by the Mirant retrofit idea (which actually had been initially discussed and dismissed earlier in the CTs' evolution.) “The process we went through was a very public process,” she said. “Our process is not just the city family. It's the community. They're the ones who are going to live with it.”

Peskin called on Kirshner-Rodriguez to just withdraw the plan and the Mayor's legislation, pending at the Board, to unilaterally negotiate and execute a memorandum of agreement with Mirant to do the retrofit.

“I believe we feel very confident about the retrofit possibility,” Kirshner-Rodriguez maintained.

“Where do you have this confidence from?” asked Maxwell, incredulous. “It's never been done before. After hearing what you heard today you're still confident? You don't have questions. That's scary to me.”

Replied Kirshner-Rodriguez, “I feel comfortable saying the confidence I have is based on numerous conversations I've had.”

At which point Maxwell urged her to finish what she had to say, and quickly.

What's now clear is the case for the Mirant retrofit has to be rock solid and the Mayor's office still has a serious amount of work to do -- or they need to drop the idea completely. The Board has already passed legislation asking the SFPUC to outline a transmission-only plan to meet local energy needs and present it to Cal-ISO as a way to urge the state agency to rethink its current command that San Francisco generate some kind of baseload power within the city to meet reliability needs. That's something the Mayor has supported and a point on which the city family still agrees.

Perhaps it's time for the city to come together again and stand up against Cal-ISO. As former CPUC president Lynch told the Guardian after the hearing, “The ISO are ideologues, not engineers. They have no basis in fact that we need any peninsula power production.”

She said this “stupid project” is not where the Mayor should be taking a stand and suggested the city come together and sue Cal-ISO to demand better energy accountability.

The Land Use and Economic Development Committee will hear the Mayor's legislation [Word doc]to move forward with the retrofit at their next meeting, Monday, Oct. 27. Agenda here.