Gray Skies

If Gov. Davis has his way, California soon will have dozens of new power plants -- a lot of them in the wrong places, some of them unnecessary, and very, very few of them based on renewable energy

Residents of the city's southeast side have long felt they've been polluted enough. They were hoping that a new, state-of-the-art power plant planned to replace the aged Potrero Hill station could help spark a cleanup of the area.

Back in July 1998, before electricity stories were on the front page every day, PG&E and San Francisco Mayor Willie Brown signed a contract guaranteeing the closure of the Hunters Point plant as soon as it was no longer needed for what is known, in power industry terms, as "reliability."

An area of the electric power grid is considered reliable if it can withstand a certain number of glitches -- a transmission line break, or a power-plant breakdown -- and still continue delivering power. Because San Francisco's transmission system has always been limited by its location on a peninsula, its reliability has long been an issue of concern for grid operators. The contract between Mayor Brown and PG&E spelled out two separate ways to close the Hunters Point plant and still conform to reliability standards: 1) a new, larger plant could be built at Potrero, or 2) significant upgrades could be made to the area's transmission system.

Public-power activists have urged Gov. Davis to have the state seize power plants, but so far he's used his political stroke to encourage private power-plant construction.
Paul Trapani
Public-power activists have urged Gov. Davis to have the state seize power plants, but so far he's used his political stroke to encourage private power-plant construction.

After the Hunters Point contract was inked, PG&E sold most of its Bay Area power generation plants to the Mirant Co., an Atlanta-based firm, as part of the state's deregulation plan for electric power. But PG&E kept, and still expected to close, the Hunters Point plant.

Then, this spring, amid the political nightmare of the power crisis, Gov. Davis signed a bill prohibiting the shutdown of any power plants -- no matter how filthy and unnecessary -- until 2006.

In May, Supervisor Sophie Maxwell, who represents southeast San Francisco, sent the operator of the state power grid, the Independent System Operator, or ISO, a letter inquiring as to what it would take to shut down Hunters Point. The director of planning, Armando Perez, responded that two issues had to be resolved before the plant could close. Predictably, the ISO wanted to be sure that the Peninsula would have reliable service without the plant. But Perez also wrote that ensuring "cost-effective" electricity was now an ISO concern.

In other words, the grid operator liked having a PG&E plant in San Francisco, to prevent Mirant from having a local monopoly on supplying power in the new world of power deregulation.

"I couldn't believe it," says Maxwell, whose heavily industrial district has the city's highest rates of asthma and cancer. "It's like they were using us for leverage."

The about-face on Hunters Point is just a small indication of the chaos and arbitrariness that seems to inhabit the state's power-plant approval regime.


When electric power was provided solely by tightly regulated electric utility monopolies such as PG&E, the process for approving new power plants focused on local need and reliability concerns. Under the state's deregulation law, however, the Energy Commission is explicitly forbidden to consider whether a plant is actually needed. Under deregulation, the market is supposed to regulate the number of power plants in operation. After all, the theory goes, if a power plant were not needed -- if the power it produced could not be sold -- no one would propose building it.

As it stands, then, the Energy Commission will examine the environmental impacts of a new, larger Potrero Hill power plant, but it cannot look at alternatives to Mirant's Potrero Hill proposal -- perhaps a smaller gas-fired plant, augmented from solar or wind sources -- without violating the law. So proposals by Supervisors Tom Ammiano and Mark Leno that could bring the city as much as 150 megawatts in solar and wind generation won't even be considered when the Energy Commission decides on the Potrero Hill power plant proposal.

"What you don't have now is what's called "integrated resource management,'" says Alan Ramo, an environmental law professor at Golden Gate University. "In the end, the best thing might be to have a smaller Potrero plant, with the older units shut down, and with reliability maintained with some wind and solar power. Instead, though, the Energy Commission plays this game. They hold up a 500-megawatt plant, and they hold up solar alone, and they ask, "Which is better?'"

Solar, obviously, cannot always provide power. Sometimes the weather is cloudy. So solar loses, and the 500-megawatt gas-fueled plant wins -- even if a combination of energy sources would provide much of the needed power and cut pollution.

If environmental reasons weren't enough to push the state toward using renewable energy resources to shrink the gas-fired plants now in the planning pipeline, there are economic reasons that should. Stanford economist Frank Wolak says consumers should be wary that nearly all of the new plants burn natural gas. "Gas isn't as volatile as electricity, but it's prone to supply shortages that can have that kind of effect [on prices]," he says. "In California, I don't think it's environmentally possible to consider nuclear or coal plants, so you'd probably want to do as much with renewables as you can."

As it considers a new and larger Potrero Hill plant, the Energy Commission is ignoring not just renewable energy sources, but also two other huge electric power plants may be built within 12 miles of Potrero Hill.

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