SFPUC hears presentation on Potrero peaker turbines as residents press for Mirant closure

San Francisco — The San Francisco Public Utilities Commission on Oct. 19 heard a detailed staff presentation on a proposal to site three LM6000 combustion‑turbine “peaker” generators in the city and a single turbine at the airport, a package staff and the California Independent System Operator (Cal ISO) say is intended to replace the reliability role of the Mirant Potrero plant and allow its eventual closure.

Susan Leal, SFPUC general manager, opened the discussion and introduced Tony Irons, the commission’s deputy general manager, who described the project’s layout, operation and financing. Irons said the in‑city site would house three LM6000 turbines on an approximately four‑acre Potrero parcel while a smaller, similar unit would be leased at the airport. “This is a peaker plant,” Irons said, describing recycled water cooling and the plant’s relationship to nearby Muni operations.

Why it matters: The city, community groups and Cal ISO have long sought a way to remove the Potrero plant’s “must‑run” reliability designation and shut the Mirant facility because residents and public‑health advocates say it is a major local source of pollution. Cal ISO told the commission it would remove the must‑run designation only when a demonstrated alternative that meets reliability needs is in service.

Emissions, noise and operations: Irons said staff comparisons show the proposed peakers would produce substantially lower aggregate emissions than the full Mirant facility: “Currently in all of the Potrero plants that are operating … the significance is that the emissions from this plant, in 10 years, equal the emissions from the existing Potrero facilities in one year. It is 10 times cleaner,” he said. Commissioners pushed staff to ensure comparisons use post‑retrofit (post‑SCR) Mirant data; one commissioner cited Bay Area Air Quality Management District figures showing Mirant Unit 3’s NOx at about 7 ppm after a roughly $25 million SCR retrofit, and the peakers at about 7.5 ppm in some datasets.

On noise, Irons said the peaker sound level would be about 55 decibels at the property line — “less than the sound of a car.” Staff committed to provide a decibel‑level demonstration and clearer real‑world context for that figure.

Dispatch, hours and commercial use: Commissioners pressed who would decide when the peakers run. Irons said during the Department of Water Resources (DWR) contracted term Cal ISO and DWR would call units for reliability; each in‑city CT is permitted up to 4,000 hours. Commissioners also asked whether contract language could allow J‑Power (the proposed builder/operator) to run units for commercial sales (economic dispatch) beyond reliability calls; staff said the term would be addressed in contract negotiations and that the airport unit could be sold commercially by the operator under current contractual language unless protections are added.

Financing and city exposure: Irons described a proposed city contribution of about $27 million at commercial operation plus debt issuance (cited in presentation as a $25 million principal with a $35 million total servicing figure) and estimated city costs for the project at about $61.4 million. Staff said the city would also receive capacity payments under an agreed price of $105 per kilowatt‑year during a defined period, and consultants modeled a payback period of roughly 14 years on a suite of assumptions; commissioners requested more detail about timing, the scope of city liability if PG&E declines participation, and the risks if economic sales occur.

Cal ISO position: Julie Gill of the California Independent System Operator told the commission Cal ISO’s action plan committed the ISO to remove Potrero’s must‑run designation when alternatives providing the same reliability are in place. “The ISO has stood by its commitment to remove Potrero’s must‑run status once the city’s combustion turbines are put in place,” Gill said, adding that ISO must be satisfied that alternatives meet the reliability standard in its control room before taking action.

Community response: More than three hours of public comment followed. Residents, health professionals and community groups from Bayview‑Hunters Point and Potrero pressed the commission for stronger guarantees that Mirant will close before peakers operate, challenged the project’s environmental review and outreach, and urged exploration of non‑polluting alternatives such as reconductoring, the Transbay cable and energy‑efficiency or distributed renewable options. Legal and procedural concerns were raised regarding notice and participation; an environmental lawyer asked whether the SFPUC had secured Mirant’s signed commitment to retire Potrero before signing CT contracts.

Next steps: The commission did not vote on the CTs at the Oct. 19 open session. Commissioners directed staff to provide clearer, single‑page comparisons on key criteria (air emissions, noise, capacity, control and fiscal impact) for continued consideration; staff also promised definitive answers on operating hours, decibel context and contract protections against commercial operation beyond reliability calls. The item will return for further consideration at a subsequent meeting (commissioners referenced a possible vote the following Tuesday).