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Power plant plans debated in San Francisco
John Upton reporting for the San Francisco Examiner

In January 2003, San Francisco lawmakers accepted power plant equipment from a bankrupt energy company as settlement for a price-fixing lawsuit. More than five years later, when a construction contract was ready to be signed, energy companies and environmental groups blocked The City's plan to use the equipment to build its own power plant.
City-owned power plant carries polluted price tag  original / top
Aug. 11, 2008

New environmental figures could help settle a vexing debate, which has pitted environmentalists, Bayview activists and energy corporations against public power champions and real estate interests, over how best to burn fossil fuels.

A Mirant Corp. plan - which would add smokestacks and gas-powered turbines to three non-waterfront backup diesel generators at its Potrero Hill site - would spew more air pollution over San Francisco per operating hour than a proposed city-owned plant, according to a three-page San Francisco Public Utilities Commission analysis.

But the proposed city-owned plant, on the edge of the nearby Bayview neighborhood, would need to run more frequently than Mirant's three backup generators are currently allowed to run in order to repay construction-related debts.

As a result, the proposed city-owned plant would churn out at least double the soot and airborne nitrogen and sulfur pollution as Mirant's backup units, unless the company or a new owner changes or violates the permit. San Francisco previously sued Mirant for running its backup units more than it was allowed when power prices spiked.

The San Francisco Bay Regional Water Quality Control Board has indicated it is reluctant to renew Mirant's water permit, which is needed to operate its main plant, once it expires at the end of the year because of damage caused to the Bay. The plant currently is propped up with ratepayer subsidies because it is considered critical to protecting San Francisco against blackouts.

Only one of the two proposed power plant projects would qualify for ratepayer subsidies once the main plant shuts, said Sidney Davies, the assistant general counsel for California Independent Systems Operator.

"We need one or the other - not both," she said.

The Mirant retrofit is proposed on the company's 27-acre swathe of contaminated land next to the up-and-coming Dogpatch neighborhood and a planned billion-dollar city redevelopment.

The retrofitted units might run for five years before the site is redeveloped, Mirant California President John Chillemi said.

The city-owned plants would need to run for 18 years if millions of dollars in construction-related costs are to be repaid through electricity sales and ratepayer subsidies, according to SFPUC figures.

Rewiring plan never reached intended desk
A plan to rewire The City to offset the need for new or retrofitted power plants appears to have stalled.

The Board of Supervisors in June voted to present a Pacific Gas & Electric Co. proposal to state regulators that would see hundreds of millions of dollars in ratepayer subsidies spent rewiring The City.

The proposed rewiring plan could power San Francisco using homegrown renewable electricity along with fossil-fuel-generated power imported through cables from facilities outside of The City.

The latest steps toward developing 103 megawatts of solar power and 140 megawatts of wind power, which would be directly piped to consumers in and around The City through PG&E's transmission lines, were approved by city leaders in 2007.

But the California Independent System Operator, which assigns limited ratepayer subsidies, has not received the proposal from The City, agency spokeswoman Stephanie McCorkle said.

Instead, she said, the agency is negotiating with Mirant, which applied for subsidies to retrofit its backup power generators.

The San Francisco Public Utilities Commission is trying to woo potential customers for the program and then plans to search for power providers, spokeswoman Laura Spanjian said.

Mirant backup generators
8: Most hours the Mirant backup units can currently run each week
1.3: Tons of soot produced annually if the Mirant units run 3.5 hours per week (for comparison)
3: Tons of soot produced annually if the Mirant units run 8 hours per week
1.7: Tons of airborne nitrogen pollution annually if the Mirant units run 3.5 hours per week (for comparison)
3.9: Tons of airborne nitrogen pollution annually if the Mirant units run 8 hours per week
City-owned plant
37: Hours the city-owned plant is expected to run weekly to recover costs
77: Maximum hours the city-owned plant would be permitted to run each week
0.7: Tons of soot produced annually if the city-owned plant runs 3.5 hours per week (for comparison)
7.1: Tons of soot produced annually if the city-owned plant runs 37 hours per week
1.2: Tons of airborne nitrogen produced annually if the city-owned plants run 3.5 hours per week (for comparison)
12.5: Tons of airborne nitrogen produced annually if the city-owned plants runs 37 hours per week
145: Megawatts that would be produced by retrofitted Mirant units or by new city-owned plant
970: Megawatts used by city at peak times
Sources: SFPUC, PG&E Co.
Power plant casts shadow over pier's revival  original / top
July 20, 2008

A plan for the dilapidated Pier 70 shipyard south of Mission Bay seems simple: Clean up the contaminated 65-acre site; rebuild dozens of historic buildings; continue a growing ship repair operation relied upon by The City's growing cruise ship industry; create 20 acres of open space including two shoreline parks; and construct more than 3 million square feet of commercial building space.

However, recent political flip-flopping about the closure of the neighboring Mirant Corp.-owned power plant threatens the billion-dollar redevelopment that is expected to revive a waterfront that once was home to one of the largest ship-building operations in the West.

The waterfront Mirant plant was scheduled to shutter as soon as 2010 under a $2 million redevelopment agreement reached last year between company officials and Mayor Gavin Newsom. Mirant's redevelopment efforts would have coordinated with the proposed Pier 70 redevelopment.

However, political wrangling regarding an expensive and long-term proposal to build and operate replacement city-owned fossil-fuel-burning plants in the Bayview and at the airport recently prompted Newsom to backtrack. He and other city officials are now supporting the continued operation of the Mirant plant.

Newsom's new plan has the plant partly closed, partly refurbished, and operating until a new energy source is available.

The mayor's unexpected support to keep the Mirant plant open has "put a wrench" in Pier 70 redevelopment plans because the waterfront plant reduces economic development opportunities, said Supervisor Sophie Maxwell, who represents the area.

The presence of the plant decreases the property value of Pier 70 acreage, as well as the ability to attract private developers to build the commercial space, according to Maxwell and others working of the project. And lower property value translates into lower percentage of taxes collected, money that is redirected into the Pier 70 redevelopment.

A Maxwell-proposed ballot initiative to provide funding for some of the development of Pier 70, including environmental cleanup and infrastructure upgrades through bonds and taxes, is due before the Board of Supervisors on Tuesday.

If the plant continues to operate, the main generator and smokestack will be switched off, said Rich Hillis, a deputy director in the Mayor's Office of Economic and Workforce Development.

Joe Boss, a member of various neighborhood and power plant advisory groups, said The City would "hit a home run" if the power plant is closed and the land is developed in tandem with Pier 70 redevelopment efforts.

The economic impact if the plant continues operating is "hard to quantify," said Boss, who has served as a spokesman for would-be Bayfront developer Build Inc. on a separate project. "But it's at least a 35 percent loss of development opportunities."

Power plant hindering Pier 70 redevelopment plans.
65: Acres of redevelopment space at Pier 70
27: Acres of adjacent power plant site
48: Years the plant has been operating
9: Years Mirant has owned the plant
1: Power plant generator proposed to be switched off
3: Backup generators proposed to continue operating
$26 million: Mirant investment to reduce air pollution since 1999
$2 million: City incentive previously offered to Mirant to shutter plant
$273 million: Estimated cost of proposed new power plants
$1 billion: Estimated Pier 70 redevelopment costs
Sources: Port of San Francisco, San Francisco Public Utilities Commission, Mirant Corp.
SFPUC suggests rebuilding old power plant  original / top
July 9, 2008

The agency that oversees electricity in San Francisco withdrew its support Tuesday for a plan to build city-owned fossil fuel-burning power plants.

The San Francisco Public Utilities Commission voted unanimously in favor of an alternative plan to protect The City against blackouts by partly closing and partly refurbishing a privately owned fossil fuel-burning plant at Potrero Hill.

An environmental analysis was provided to commissioners that compared the proposal to retrofit the Mirant-owned plant with the proposal to build a city-owned plant south of the Bayside site.

"In every reasonable comparison of pollution, the retrofit is a better solution for the people of this city," Commissioner Dick Sklar said during the hearing. "This alternative was presented to our staff on February 13th and we were not even told about it."

Ed Harrington, who took up duties as general manager of the SFPUC in April, told The Examiner on Tuesday that Mirant hadn't formally proposed to retrofit its plant in February.

The Board of Supervisors is scheduled to vote next week on whether The City will borrow $273 million to build new natural gas-burning power plants, based on the SFPUC's 2007 approval of the project. The board's vote has been delayed since May, when Mayor Gavin Newsom asked for time to pursue alternatives.

Members of the Potrero Boosters Neighborhood Association during the meeting criticized the proposal to retrofit the Mirant plant. Mirant had previously proposed to close the plant and redevelop its land.
Plant retrofits could spark new life   original / top
 June 3, 2008

San Francisco does not need to build planned new power plants, state regulators told Mayor Gavin Newsom on Monday.

An aging and polluting power plant at Potrero Hill has long been targeted for closure by city officials who planned to replace it by building a cleaner, natural-gas-burning plant.

A vote on the plan to build a new plant at Potrero is scheduled for today at the Board of Supervisors. The vote had been postponed for several weeks at the request of Newsom, who said he wanted to explore more environmentally friendly alternatives.

The California Independent Systems Operator, or Cal-ISO, the agency that oversees the state's power supply, said in its letter to Newsom that an underwater Transbay cable expected to be built by 2010 to carry up to 400 megawatts of electricity from Pittsburg to San Francisco will sufficiently protect The City against blackouts if the owner of the existing Potrero plant, Mirant Corp., shut down its biggest and most polluting generator.

Mirant, however, would need to eventually upgrade three of the power plant's backup diesel generators if new power plants are not built, Cal-ISO President Yakout Mansour told Newsom, adding that ratepayer funding might be available to help meet those costs.

Newsom told The Examiner on Monday that the Mirant generators could be retrofitted with new technology to run more cleanly and that they could be changed to run on natural gas, which is a less polluting fuel than diesel.

The City still needs to explore longer-term solutions to entirely replace the Mirant plant, Newsom said.

"Its one thing to retrofit but it's another to shut it down, and the only way to shut it down is to replace its power or come up with a radical alternative-energy strategy," Newsom said.
Power plant plan is losing its steam   original / top
 May 21, 2008

A power plant in The City's southeast that has long been targeted for closure could remain open and be refurbished to reduce its air and water pollution.

On Tuesday, a majority of the Board of Supervisors, for the second week in a row, agreed to postpone votes on a city plan to borrow $273 million to build less-polluting natural-gas-burning power plants intended to replace the older plant in Potrero Hill.

Supervisor Sean Elsbernd made the request to delay for another two weeks and added new conditions to the proposal to build new plants.

Alternative plans could be adopted, under Elsbernd's amendments, such as the refurbishment of the existing Mirant Corp.-owned power plant, if a three-month study concludes a different plan would increase city control over electricity, improve the environment and create other benefits.

"Let's just focus on the policy," Elsbernd told his colleagues. "This has been an issue that unfortunately has been flooded with politics."

Mayor Gavin Newsom and Mirant have held discussions recently in an effort to avoid moving forward with the plan to build the new fossil power plants, according to Newsom spokesman Nathan Ballard.

"The option involves retrofitting the existing plant to provide an adequate, reliable and clean source of power," Ballard said in an e-mail.

The plan would see the power plant converted to run solely on natural gas and its dirtiest generator would be shut down, according to Ballard.

Officials, including Board of Supervisors President Aaron Peskin and southeast Supervisor Sophie Maxwell, have supported the plan for new power plants in the southeast as part of an effort to shutter Mirant's dirtier plant.
Decision on Potrero power plant delayed  original / top
 May 13, 2008

Mayor Gavin Newsom asked city legislators to delay a vote on a controversial plan to build a new power plant in Potrero Hill that will replace an older, more polluting plant, saying he needs another week to work on an alternative strategy.

The Board of Supervisors was scheduled to vote today on a proposal to borrow $273 million to build natural-gas-burning power plants in The City's southeast and at the airport, but Supervisor Sophie Maxwell, the legislation's sponsor, said Monday that she had agreed to the mayor's request for a postponement.

The state agency charged with ensuring that Californians have reliable electricity supplies, the California Independent Systems Operator confirmed in a May 1 letter to the San Francisco Public Utilities Commission that The City's plan for the new power plant was "the best mechanism" for retiring the old Potrero power plant. The plan to build the cleaner power plants and take other steps to replace the Mirant plant was approved by the agency in November 2004.

Opposition, to the plan, has grown in recent months, however, with groups including the Sierra Club, the San Francisco Planning and Urban Research public policy nonprofit and the Bay Area Ella Baker Center for Human Rights expressing a desire for a more renewable, less polluting option than a fossil-fuel plant.

Newsom, who agreed in November to fast-track development proposals on Mirant's land and waive millions of dollars in city fees if the company closed the plant, told The Examiner on Monday that while he wants to close Mirant, he is "desperate" to avoid building new fossil-fuel-burning plants.

"I don't want to live to regret this decision," Newsom said. "We may look like fools five years from now."

Newsom said he will try to come up with an "aggressive" alternative plan to install new technology at the Mirant-owned plant to reduce pollution, increase electricity imports from a plan in the works to bring power into The City through a Transbay Cable, create more electricity from renewable sources and reduce in-city electricity demand.

San Francisco Public Utilities Commission General Manager Ed Harrington told supervisors last week that SFPUC staff hadn't filed proposals with the California ISO to take different steps to replace the Mirant plant because discussions indicated they would have "no chance of success."
Potrero power-plant proposal sparks opposition legislation  original / top
 April 4, 2008

A new contract to build power plants in The City to replace a more-polluting plant in Potrero Hill is expected to be introduced to the Board of Supervisors next week - but one city legislator has drafted legislation that could nix or further delay the project, which has been debated for more than seven years.

In October, a contract with another company set to build the power plant was approved 8-3 by the Board of Supervisors, after being told that Mayor Gavin Newsom's office had reached a deal with Mirant Corp., the owner of the older plant, to close it down after the new power source was up and running.

The San Francisco Public Utilities Commission recently announced it reached a new $250 million deal with Ohio-based Industrial Construction Co. Inc. to build a 150-megawatt natural gas-burning plant north of the Islais Creek Channel in The City's southeast and a 48-megawatt natural gas-burning plant at the airport.

The California Department of Water Resources would funnel $32.5 million a year from utility companies' rates toward the project until 2015, according to department official Richard Grix. If the plants start operating by 2010, that could provide 80 percent of the project's construction costs.

Supervisor Sophie Maxwell said she's "very glad" that the supervisors will finally be able to vote on a deal that could shut down the air-polluting Potrero Hill plant, which is in her district. "We'll be generating our own power and we'll be able to market it," she said.

Supervisor Michela Alioto-Pier, however, said she will introduce legislation that, if passed, would force The City to re-evaluate the need and fiscal impacts of the project.

The City should develop alternative energy sources, Alioto-Pier said, adding that a planned power project called the Transbay Cable, would offset the need for new plants.

The Transbay Cable will deliver enough electricity from Pittsburg to San Francisco to more than offset the lost capacity from the Mirant plant in the coming years, according to figures provided by project manager Sam Wehn.

SFPUC general manager for power Barbara Hale said the California Independent System Operator requires The City to build new in-city power plants before the Mirant plant can be shut down.

California ISO spokeswoman Stephanie McCorkle told The Examiner that The City has not formally proposed any plans other than the new gas-burning plant to shut down the Mirant plant.

"We're always willing to look at something," she said.
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