Officials Go From Cold to Hot on Power Projects

In the seemingly long-ago 1990s, when California had electrons to spare and energy was the last issue on most people’s minds, San Diego Gas & Electric tried to expand a 700-megawatt power plant in Chula Vista--and met with stony indifference from local government types.

The attitude bespoke the not-in-my-backyard opposition that such projects typically have faced around the state. SDG&E; shelved the plan.

But the current is flowing the other way now: The state is in the midst of an electricity crisis, and the San Diego bedroom community is urging the plant’s new operator not just to keep the facility running but, indeed, to make it bigger.

From the governor’s mansion to city council chambers, officials are courting power plant projects and seeking ways to get them built faster--even as critics question the wisdom of promoting what they see as air-polluting eyesores that would be unnecessary if Californians could instead find the will to conserve energy and promote cleaner ways to generate it.

But with electricity rates having doubled in some parts of the state and the overtaxed power grid narrowly dodging blackouts this summer, greasing the skids for new power plants is seen by many officials as the one sure way out of the mess.

“It shouldn’t take us longer to permit a power plant than it took to win World War II,” said U.S. Rep. Duncan Hunter (R-El Cajon), whose constituents are among those paying the highest electricity prices in the state. “All it takes is someone with the political will to get it done.”

Prodded by Gov. Gray Davis, the Legislature on Thursday passed the California Energy Security and Reliability Act, which would shave months off the average gestation period for new power plants. The measure, AB 970, is designed to boost statewide generation by speeding up the construction of 13 major facilities and plant expansions that have been proposed in California. Construction has begun on five others.

It’s only natural that solutions are most urgently sought in San Diego County. Customers of San Diego Gas & Electric, the first utility to fully deregulate under California’s landmark 1996 legislation--and thus be allowed to pass increased costs for electricity on to ratepayers--have been jolted by bills that have doubled or worse. Southern California Edison and Pacific Gas & Electric rates are frozen for the time being. Customers of the Los Angeles Department of Water and Power, a municipal utility not part of deregulation, have not been affected by price spikes or electricity shortages.

Holding On to Existing Plants Is Paramount

With the realization sinking in that California has been made vulnerable by its status as an energy-sucking monster--one that consumes 20% more power than it creates--the last thing officials want is to lose a plant. Yet under terms of a 1999 deal in which Duke Energy Corp. took over the Chula Vista facility from SDG&E--which; under deregulation was required to divest most of its generating properties--the plant was to be demolished by 2009.

Just a few years ago, some civic leaders viewed the facility as a polluter and eyesore. Now Chula Vista wants “an accelerated replacement” of the plant on a site adjacent to the present operation. The city is attracted by a projected $3 million a year in additional tax revenue and cleaner-burning gas turbine technology--and the hope that it would keep a long-term source of cheap electricity.

“Power is an important issue to us,” said Assistant City Manager Sid Morris. Chula Vista has been seeking ways to improve energy efficiency for several years, he said, but higher energy prices have made it “a high priority to procure economically more feasible power.”

Chula Vista’s willingness to continue hosting the power plant is music to the ears of Mark A. Seedall, a Duke executive involved in negotiations to boost the facility’s capacity by about 40%, to more than 1,000 megawatts, or enough to serve about 1 million homes.

“Community support is fundamental. It’s hard to go against local constituents,” he said, adding that Sacramento and the Port of Oakland have been similarly open to power plant proposals from the North Carolina-based energy firm.

Other signs abound that the not-in-my-backyard attitudes are softening. Rep. Hunter proposed that the state or unspecified local governments acquire up to 40 General Electric jumbo jet turbines to build an ad hoc power plant at the Miramar Marine Corps Air Station that would give the San Diego area “total electricity independence.”

Whether novel or traditional, power plant proposals are sprouting in the state because of the double whammy fueling the crisis: surging Internet-fed consumption and a lack of enough new generating capacity to keep up. And the resulting high electricity prices now make such investments attractive.

No major plants were built in California in the 1990s. The utility monopolies were dissuaded by regulators, who were pushing the development of renewable energy, and by market realities of the time that made electricity cheaper to buy from neighboring states than to develop at home.

But since the 1996 deregulation law--which transferred the task of building and operating new power plants from the utilities to independent energy producers--about $7 billion in major new or expanded projects has been proposed. The plants would add 25% to the state’s electricity capacity, or enough to light about 11 million additional homes. But none of this electricity has been produced yet because of the mountain of red tape the projects face and their complicated nature.

Major power plants in California can take four to five years from drawing board to first flow of current, which is one reason the state’s largest independent power producer, Calpine of San Jose, is pursuing a project at a Palm Desert Indian reservation, where only federal red tape must be cut.

“The California permitting process is probably more rigorous than other states’,” said Calpine spokesman Bill Highlander, who added that in Texas, where Calpine has eight projects underway, the permit process takes one-third as long as it does in California.

By law, power plant licensing in California is supposed to take 12 months and include review by the staffs of the California Energy Commission and other agencies, public hearings and a formal commission vote. But the clock doesn’t start ticking until the developer’s application is deemed “data adequate,” and that can take several months, generators said. What’s more, the clock stops any time a problem arises.

AB 970, which Davis has yet to sign, would set a six-month limit on the review of big power plants that pose few environmental problems and four months for “peaking plants,” smaller generators that could be built in a few months and run part time during power shortages. The bill, which won the backing of some environmental groups, would establish a “green team” with representatives from several agencies to find more ways to expedite construction of clean electricity generation and would provide $50 million to promote energy efficiency.

‘This Is a Good Incremental Step’

Only two projects currently under review would be likely to qualify for the expedited process set up by AB 970, but three more that are expected to apply soon may qualify, according to the California Energy Commission.

“This is a good incremental step, and it may help,” said Jan Smutny-Jones, executive director of the Independent Energy Producers Assn., which represents most of the state’s power generators. Some of those corporations, however, are reconsidering future investment because of the uncertain regulatory climate in the state, said Smutny-Jones, who is also chairman of the board of the California Independent System Operator, a nonprofit agency set up under deregulation to operate the electricity grid for about 75% of the state.

The California Energy Commission studied how it does the job on orders from the Legislature and in March concluded that the process is “fundamentally sound.”

“California has a sophisticated and complicated Environmental Quality Act that everyone must comply with,” said Claudia Chandler, assistant executive director of the California Energy Commission. “If we don’t do it right, it won’t hold up in court. Even shopping malls take time to be permitted and licensed.”

Opposition Killed S.F. Bay Project

At the other pole of this debate are power plant opponents, who say they will not dim their efforts despite the harshness of California’s energy woes. In fact, keen opposition from these groups helped swamp a recent plan by PG&E; to ease the power crunch by anchoring a huge jet-fuel-powered electricity generator on a barge in San Francisco Bay.

These critics feel ill-served by the current licensing process and argue that an even shorter procedure would cheat the public of a chance to influence future projects.

“They’re trying to cut the public out,” said Joe Hawkins, who lives near eight power plants in the Northern California community of Pittsburg and has intervened on two proposed projects. “They’re playing Russian roulette with people’s health here.”

Even California Energy Commissioner Michal Moore, who heads the agency’s electricity committee, wonders about the risks of an expedited process.

What could be lost, he said, is a chance to air “environmental justice” and other concerns such as those already being raised by South Gate residents about a proposed plant in that city.

“Would that community want us to have this thing done in six months if it meant that all of their concerns didn’t get considered? Probably not,” Moore said.

J. Stuart Ryan, executive vice president in the San Francisco office of power plant developer AES Corp., said state law or even greater local political acceptance wouldn’t be enough to speed power plant construction.

“There are a host of legal avenues available to people who want to appeal these sorts of things. And no one is talking about denying opponents access to the courts,” Ryan said. Lawsuits are what “tend to make these things take years as opposed to months to get permitted.”

Indeed, power plant foes vow not to be expedited away.

Greenaction, one of the environmental groups that fought the PG&E; barge proposal, had paid little attention to power plant issues but now has been energized by the fight, said Bradley Angel, executive director of the San Francisco-based organization.

“It was a wake-up call,” he said, “to us and a lot of other people who are asking: Will the state pursue a path of ramming polluting power plants down the throats of Californians?”