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. And JPower will be trying to recoup its money as fast as possible, and will have every incentive to keep the juice flowing.
The combined impact of three new fossil-fuel power plants, running at maximum capacity, and the exiting Mirant plant would be an unacceptable burden for southeast San Francisco - and the SFPUC and the supervisors have to do more than rely on Mirant's vague statements to prevent that from happening.
Ideally, we'd prefer no new fossil-fuel plants in the city at all, and we're not convinced that San Francisco even needs the peakers. Conservation, along with new solar, wind and tidal power, could easily fill the rather modest gap between what San Francisco has now and what it will need in a Mirant-free future. But that decision is in the hands of California Independent System Operator, which controls the grid, and the CAISO insists that Mirant will stay open unless the peakers are running. That agency needs to be reformed, and the state Legislature should take it up next session. The CAISO should be required to consider increased efficiency, conservation and alternative generation as a viable alternative to building and running fossil-fuel plants.
In the meantime, there's a simple solution here: The SFPUC should refuse to give the peakers a green light unless the city controls the on-off switch. Specifically, the contract should limit the number of hours the turbines can operate - and must state specifically that they can never be turned on until Mirant is shut off for good.
In a September, 2007, environmental assessment, the SF Department of Public Health noted that "it's imperative that the city ... obtains an agreement from Mirant to secure closure of the [Potrero] plant before the final approval of the SFPUC to site the new CTs." That may not be possible, since Mirant isn't cooperating - but the city has every right to set rules about when the CTs can run.
It's simple: When Mirant throws the off switch, and that plant is cold and dead forever, JPower and the city can turn the peakers on. Not one minute before.