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SFPUC staff defends combustion-turbine plan as path to close Potrero Unit 3; commissioners and public press for alternatives
Summary
PUC staff told LAFCO the CT project is aimed at releasing RMR status on Potrero Unit 3 and that a DWR contract provides $32.5 million a year in capacity payments; commissioners pushed for ISO analysis of non-fossil alternatives and the public urged the city to pursue renewables and oppose new —peakers.—
PUC staff defended the city—s plan to build four combustion-turbine (CT) units as the path to release reliability-must-run (RMR) obligations on the aging Potrero Unit 3, telling LAFCO that the Department of Water Resources (DWR) contract includes capacity payments the city would forfeit if the project slips.
"Under the contract, we receive $32,500,000 a year when we're available," said Barbara Hale, assistant general manager for power at the PUC, describing the DWR capacity payments and the financial urgency staff said attaches to timely approvals. Staff told commissioners the DWR contract expires at the end of 2015 and that longer delays reduce the effective payment window.
Commissioners repeatedly pressed staff and asked whether renewables, repowering the existing Moran Unit 3 or a combination with the Transbay Cable transmission project could replace the proposed CTs. PUC staff said the California Independent System Operator (ISO) looks for dispatchable, controllable resources available around the clock and has told the city that the action plan calls for the CTs to meet the ISO—s reliability criteria. Staff also noted that alternatives such as repowering existing peakers or submitting alternative plans to the California Energy Commission would trigger licensing processes that can add many months to project timelines and that DWR funding is tied to developing the CT project.
PUC staff described an environmental mitigation package presented to the California Energy Commission that they said would reduce local impacts: technology upgrades, offsets intended to counterbalance emissions regionally, a high-efficiency street-sweeping program in adjacent neighborhoods, asthma and indoor-air education, tree planting and closed-loop cooling to avoid Bay discharges. "We have purchased offsets, to bring, 1 for 1 back to 0," staff said when summarizing mitigation commitments to the regulatory record.
Public commenters and environmental advocates contested the need for the CTs. Espanola Jackson of Bayview said the commission should adopt a resolution opposing peakers and argued the city did not need them. "I would like for you to put together a resolution saying no peakers because there's no need for peakers," Jackson said. Other speakers and advocacy groups asked whether the ISO had been asked to study comprehensive portfolio alternatives that combine transmission, renewables, efficiency and demand response in lieu of new fossil generation.
What happens next: PUC staff said hearings before Board of Supervisors committees and the full Board are likely in early May; no vote was taken at LAFCO and the item was continued, with public hearings expected to be part of the next-stage review.
