[Metroactive News&Issues]

[ San Jose | Metroactive Central | Archives ]

[whitespace] PG&E Substation Plugged Out: Not a single policy maker or government agency in the state is examining the environmental and social costs of California's two dozen power facilities currently in the works. Pictured above is the aging PG&E substation on the corner of Curtner Avenue and Little Orchard Street in San Jose.

Photograph by George Sakkestad

Power Hungry

In its desperation to avoid impending energy doom, will California planners make careful, environmentally responsible decisions about where new power plants should go? Or will they just smile and nod at anyone who puts a plan before them?

By J.A. Savage and Elizabeth McCarthy

AS A HEAT WAVE BAKED the West Coast during the first week of August, Californians were startled to learn that the electrical grid was on the verge of overload. Any day could bring a "stage three emergency" where "rolling blackouts" would cascade through the state, shutting down cities wholesale. Here in Silicon Valley, business districts, industry and neighborhoods

came dangerously close to that emergency, which has never been declared in California. Energy demand peaked at 42,879 megawatts that first week, just short of the 45,884 megawatt record set July 12, 1999. During peak summer periods, energy consumers utilize 46,250 megawatts of power, just shy of the 46,400 megawatts available in the state. One megawatt powers 1,000 homes. California faced its greatest energy predicament on June 14, when nine power plants were shut down or relegated to limited use. Earlier that day, the Independent System Operator warned Pacific Gas & Electric Co. that its customers would need to voluntarily reduce power by 500 megawatts. Close to the end of the day, PG&E cut off power to 97,029 customers in San Francisco, Alameda, Contra Costa, San Mateo and Santa Clara counties.

Welcome to the current state of the electricity industry, where brownouts and blackouts are getting as common as visits from your relatives.

Companies that develop new power plants are anxiously waiting for states to permit new building. Some have broken ground in the last few months. These builders are not the ubiquitous U.S. utilities of yore--they are deep-pocketed companies that develop power plants in India, South America and wherever else capital flows and privatization is allowed. Developers also include a recent explosion of utility affiliates that are unregulated by state agencies and the federal government.

IN CALIFORNIA, a state which has gone far in deregulating its electric industry, five plants have been approved so far, with another 19 holding formal applications. If built, those would produce 15,000 megawatts of power, theoretically enough to plug in 15 million new homes. Dozens more developers wait in the wings.

The new plants could be a great step forward if you depend on air conditioning and uninterruptable Internet access, or are a manufacturer or other big business. They do not bode well, however, for environmental quality.

Being left out of the equation is the fact that power plant development is inextricably linked with water policy, air pollution mitigation experiments with emissions trading, cries for environmental justice and threats to endangered species.

In California, no policy maker or agency is investigating the huge environmental and economic effects of siting more than two dozen facilities. Instead, the new "merchant" plants are being approved on a case-by-case basis. Energy reliability concerns, real and perceived, are calling the shots, with the cumulative impact of development being given short shrift.

To make matters worse, the authority of the California Energy Commission (CEC), which is responsible for licensing new plants, was limited by lawmakers last year. Local water boards, air boards and state wildlife departments like Fish & Game may look at power plants individually or on a regional basis, but all the agencies feed into the energy commission, which can ignore or embrace their concerns, as well as those of local citizens.

THE NEW GENERATION of merchant plants is by all measures state-of-the-art as far limiting pollution and resource impacts, but with so many on the table, concern is growing about the lack of consideration of cumulative effects.

"The cumulative impact issue is not getting its just review," said Marc Joseph, attorney for a coalition of construction unions called California Unions for Responsible Energy (CURE). The coalition has objected to many development projects being reviewed by the energy commission, taking tough environmental positions often disputed by CEC staff.

Like the coalition of environmentalists and unions in Seattle protesting the World Trade Organization, in the case of new power plants, unions are finding that saving the environment actually means keeping jobs, not taking them away.

"For construction workers in California, long-term economic success comes from sustainable development," explained Joseph. When water is used up and air quality offsets no longer are available, "the first victims are the construction workers because they don't get to work on the next job."

As an intervenor in nearly every siting case, Joseph is probably most concerned about cumulative environmental and economic impacts. He said the massive amount of construction jobs on any one plant is not worth it if the environmental impacts are too offensive.

The commission has wide latitude in its decisions, according to Steve Larson, CEC executive director. Most agree, however, that the commission's decision-making has yet to be influenced by the total weight of all these proposed plants. The most recent analyses try to address some cumulative concerns, but staff is harried, faced with the abundance of cases that have one-year deadlines.

"There's some fundamental questions about where we're going with water policies and air offset availability," noted Bob Therkelsen, CEC deputy director, in charge of energy facilities siting and environmental protection.

Water--the crux of California's development--is often the most controversial issue involved in power plant siting.

Specifically, the most obvious cumulative concern in our semiarid state is the use of fresh inland water to cool power plants. The state has a long-standing policy on water use--that fresh water is the last choice for power plant cooling. However, it is not being enforced by the commission. The formal rule is called the State Water Resources Control Board Resolution 75-58.

The state attorney general's office and CURE's Joseph are questioning the lack of enforcement of that 1975 policy. "When clean, high quality water is consumed by a disfavored use, such as cooling towers, this is nothing but reckless waste," stated Deputy Attorney General Nicholas Stern in a letter to the state water board.

MOST OF THE WATER sucked up by power plants would come from the Sacramento Delta/San Francisco Bay, the heart of California's water supply network and largest estuary on the West Coast. For example, the cooling towers of a recently licensed project near the Mojave Desert, the High Desert Power Project, would consume 4,000 acre-feet of Delta flow a year. That amount of water would fill a city block to a depth of 1,060 feet. On top of that, an additional 13,000 acre-feet of water would be stored in the region's groundwater basin for use in dry years. A facility in Kern County, the La Paloma Plant, would use up 5,500 acre-feet of Delta origin out of the State Water Project's aqueduct.

Taking more water out of the Delta can impact water quality, and consequently supplies for cities, agriculture and ailing fisheries. A coalition of state and federal water resources and wildlife agencies known as CalFed recently released a long-awaited blueprint for addressing the state's future water quality and supply needs. CalFed's plan, which is estimated to cost more than $10 billion over a 30-year period, does not factor in the guzzling of fresh water by new power plants.

When water for cooling power plants is not coming from surface supplies, it is coming from groundwater. Groundwater can be pumped by new power plant owners from their own property or bought from water agencies. One big cluster of plants is slated for California's Central Valley, known for its agribusiness and its oil fields. There are six plants proposed for Kern County alone--that's a lot of power plants.

Most of these proposed plants will be using "banked" groundwater. The water is injected and stored in an aquifer with fresh surface water diverted from the long fought-over Bay-Delta.

High Voltage sign

DEVELOPERS IN THE Central Valley, however, do not feel squeezed by water concerns. "People were fighting each other to sell us water," said Roger Garrett, the lead developer for PG&E Generating's La Paloma Plant. Another project developer, Sempra (the parent company of San Diego Gas & Electric and Southern California Gas), with its Elk Hills project, noted no opposition for water use.

If large quantities of water are not being used to cool power plants, a process called air-cooling is installed. But it is not a cure-all. Cooling powerful turbines with fans uses a fraction of the water of evaporative cooling but is not as efficient. More noteworthy for developers is the fact that energy production losses at dry-cooled facilities occur during heat waves when power prices are highest. Vehicles are the primary cause of California's notorious smog, according to air pollution agencies but, power plants remain a significant source of pollution.

Some think that air might become cleaner due to the more stringent scrubber requirements for new plants. According to Chris Ellison, attorney for some of the developers, "There are counter-intuitive benefits from these projects when their cumulative impact on the operation of older, less efficient and far more polluting facilities is taken into account." But, that assumes old plants will be retired and not used for peak electricity demand on smoggy, hot days.

"There is some cumulative analysis, but any [air pollution] increases are hard to deal with," explained Sayed Sadredin, direct of permit services for the San Joaquin Valley Unified Air Pollution Control District--site of the Kern County developments. He added, though, that even if cumulative emissions were noted, the district would only deny a plant's permit if there was a new violation of law--but a denial would be unlikely.

NEW POWER PLANT development has initiated recrimination between air agencies that are supposed to have the same mandate. For instance, air agencies downwind from Kern County take a much harsher view of new power plant development and ask for a wide-lens focus.

"The cumulative air quality impacts statewide if these projects [in Kern County] are approved could be substantial," noted a coalition of regional air quality control boards including San Luis Obispo, Santa Barbara and Ventura calling themselves the South Central Coast Basinwide Coalition. They asked the energy commission to look at development in its totality. "Equally disconcerting is an apparent change in agency emphasis on permitting these projects, with less emphasis on energy conservation programs that could reduce the need for new power sources."

There are only so many air emissions credits in any one air basin, and that alone should limit plans for new power plant development. But it has not. The "bank" of air credits is rather murky, according to analysts.

Different credits have different life spans--a credit from making a diesel-fired water pump more efficient has a life span of a few years, a credit from shutting down a plant is never-ending.

In the cases of siting power plants in the Central Valley, CURE and the South Central Coast Basinwide Air Pollution Control Council question the validity of certain credits claimed by developers in the area. And Kern County is just one cluster of new plants.

"The air districts are not enforcing offsets," alleged CURE's attorney Joseph. He added that some of the offsets being claimed by power plant developers are so old they are no longer legal.

The Basinwide agencies cite Environmental Protection Agency disputes over some credits that the EPA says are unenforceable. Basinwide also contends that the total amount of credits are overblown due to calculations made by developers.

"Air credits are not as simple as they might seem on the surface," agreed PG&E's Garrett. He said, regarding the creation of credits, that it may turn out that the process was faulty and that one group of pollutants could be substitutable for another.

There's also the critter problem. Again, taking Kern County as a model, for many people, this region is a flat, hot, uninteresting landscape punctuated occasionally by crane-like oil drillers. But to the San Joaquin kit fox and the blunt-nosed leopard lizard, it is home sweet home. The energy commission is encouraging compensation of lands away from the power plants in the Lokern Natural Area--three acres for every acre that has permanent disturbance; 1.1 acre for every acre temporarily disturbed. That is, developers buy land at an increased swap ratio at a better site for animals than the already-destroyed oil fields on which they are, or want to be, building. "There is no habitat value [at the building site] to begin with," noted PG&E Gen's Garratt.

Plant construction is extremely stressful for animals, which are threatened with becoming road kill or having their habitat flattened by heavy machinery. But Donna Daniels, environmental specialist with the California Fish & Game Department, says she's "pretty happy" with mitigation on the potential sites. "A biologist will be present during construction if any habitat or animal is sighted, and construction workers will go through species' sensitivity training."

WHILE SENSITIVITY training might seem an anathema to the burly guys who normally push around heavy equipment, both government agencies and developers say it works. Wildlife issues in the central Kern County area are dealt with "simply by putting the power plant in the right place," noted Sempra's Rowley. That is, putting them in regional wastelands.

But then there is the "take" permit--another way of saying the government will allow a developer to kill endangered species. If the on-site biologist and the sensitivity training fail, and an animal gets squashed or its habitat destroyed, that means the government has to bless the accident with a "take" permit--small comfort to the dead kit foxes and blunt-nosed leopard lizards.

The issue of environmental justice is left to the people who live near the fossil-fuel fired plants, who are largely low-income or minorities.

Pressure to apply civil rights law to protect poor neighborhoods and communities of color from more polluting facilities is mounting from community activists and federal legislation. A 1994 federal executive order requires the EPA and all other U.S. agencies to develop environmental justice strategies.

"Environmental justice recognizes that we all have to bear our fair share of obnoxious facilities," said state Sen. Richard Alarcon (D-Van Nuys). Alarcon wrote a bill this year that would have required the energy commission to look at the cumulative environmental justice impacts, but it had its teeth removed while winding through the Capitol's corridors.

THE CUMULATIVE ECONOMIC impact of multiple power plant siting is simply not contemplated. While the environmental impact of these facilities is better understood--if not on a big picture basis--economic impact in the budding deregulated industry is not well grasped. Considering cumulative impact can make good economic sense for investors and benefit the economy. Cumulative economics can also mean sudden risk for both the specific investor and the state's economy as a whole.

The California Energy Commission is not looking at the plants in cumulative economic terms because the financial risk is borne by the developers, CEC deputy director Therkelsen explained.

With electric industry deregulation, plants that become essential to both the local economies and electricity consumers can simply sink out of sight with none of the usual regulators to demand that their owners stay in business as with the former utility-owned generation.

"It's the basic Faustian bargain. Policy makers said that the market will provide a reliable source of energy. But it may be [deregulation] is fatally flawed," CURE's Joseph said, adding that, given the long lead times for building plants, boom-and-bust economic cycles are inevitable.

Policy considerations of the deregulated market are just now being grazed by politicians--meanwhile overwhelmed energy commission staff is trying to get a grasp on what all these plants mean to the state as a whole, while new power plants seem to be approved with alacrity. Furthermore, drowned out in the cry for new power plants are calls for big boosts in energy efficiency, conservation, and greater use of renewable energy.

"Renewables are a hedge against high fuel prices and [are] an in-state source of reliable power," said John White, head of the Center for Energy Efficiency and Renewable Technologies.

If White had his druthers, plant developers with the cleanest and most environmentally sophisticated mitigation proposals would be sent to the head of the power plant licensing line.

"We are suffering the consequences of the rush to build nuclear plants and dirty power plants," said Bill Magavern, Sierra Club lobbyist, of the recent push for siting multiple plants. "It will be a scandal if poor siting decisions are allowed."

[ San Jose | Metroactive Central | Archives ]

From the August 10-16, 2000 issue of Metro, Silicon Valley's Weekly Newspaper.

Copyright © 2000 Metro Publishing Inc. Metroactive is affiliated with the Boulevards Network.

For more information about the San Jose/Silicon Valley area, visit sanjose.com.

Foreclosures - Real Estate Investing
San Jose.com Real Estate