Killing the Old T. rexes

Their names have a certain ring: Mandalay, Redondo, Ormond Beach, Scattergood. Since the Korean War, the huge power plants of Southern California have hovered over our finest beaches like steel T. rexes.

Too ugly to love. Too big to move. For half a century, we’ve been forced to accept them or ignore them. One more price for living in our defiled paradise.

But now, an amazing development. We will soon have the chance to rid ourselves of the beach plants. Not all of them, but some. And convert the land into promenades of small shops, resorts, or maybe even parks.

This is an opportunity we don’t want to miss. It has come our way by virtue of two converging developments:

First, the plants are old and dying. Their technology is outmoded and they cannot compete with new turbine plants already being built.

Second, the coming deregulation of the industry is forcing utilities to shed these facilities. Southern California Edison has already announced its intention to sell a dozen old power plants, including eight along the coast.

Los Angeles’ Department of Water and Power, owner of Scattergood and two other coastal plants, has not yet decided the fate of its properties. But most likely it will be forced into the same strategy.

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What deregulation taketh away from the utilities, it giveth to others. “I don’t see any reason why we shouldn’t think about returning some of these sites to public uses,” says John White of John White and Associates, a power consulting firm in Sacramento.

“Several of them are beautiful pieces of coastal property. And you could argue that the public has already paid for them through the rate base.”

That reference to the “rate base” simply means that ratepayers accumulate an interest--equity, if you will--in power plants and other facilities when they pay their bills. The longer they pay, the more they own.

And the ratepayers at Edison and DWP have paid on the coastal plants for a very long time. You could argue that the ratepayers already own the dominant share of many of the beach plants.

So why not tell Edison simply to turn over its beach properties to us? Because, as we all know, it’s never that easy.

The state’s deregulation scheme allows Edison to sell the properties to the highest bidder, whether that bidder is Disney wanting a theme park or Union Oil wanting a refinery. Edison then must divide the proceeds between the ratepayers and its shareholders.

Of course, cities or the state could also enter the bidding.

“There’s no restriction on who can bid, and the new owner can do anything he wants with the property,” says Peter Lersey, Edison’s chief officer for divestiture. But thus far, says Lersey, most of the potential buyers are other power-generating companies.

How come, if these plants are really expiring dinosaurs?

Because the old plants come complete with generous pollution credits from the Air Quality Management District, according to industry analysts. Such credits allow the plants to operate much dirtier than any new plant.

For a few years, the analysts say, the pollution credits alone might make the old plants competitive with the new plants because the operators could avoid installing new control equipment.

“The pollution credits are priceless,” says Gurbux Kahlon of the California Public Utilities Commission, the agency overseeing the deregulation process. “You can’t get those credits when you build a new plant.”

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Thus, we have a remarkable situation where old, dirty and inefficient power plants may continue to operate because of a clean air program sponsored by the AQMD. It reminds you of the Soviet Union.

Fortunately, the experts say, the inefficiencies of the plants would overcome the pollution credits after a few years, sinking them once and for all. After that, this primo beach property will be up for grabs.

And lest you think the park scenario too good to be true, understand that an equivalent transformation already has occurred in Portland. For reasons other than deregulation, a utility decided to donate some prime downtown land to the city in exchange for a sharing of toxic cleanup costs. Everyone ended up happy.

The job here also may require some cleanup, along with the work of solving the niggling problems thrown up by the deregulation process.

But at the end of that long tunnel awaits the land--hundreds of acres of beachfront property from Santa Barbara to Huntington Beach. For half a century the T. rexes had their claws wrapped around it, and now the opportunity is ours.

It’s a chance that will not come our way again.