Quick and dirty

The energy crisis is waning, but why is California’s electricity market still being treated like a deathly ill patient? That’s a question being asked more and more by environmentalists and consumer advocates, who say it’s time to move the patient out of the intensive care unit.

Take the most recently licensed power plant, which not only got the benefit of being approved under the emergency rules, but which also broke the few remaining restrictions governing speedy plant certifications.

The Valero Refinery, a co-generation project in Benicia, applied for an accelerated power plant license from the California Energy Commission (CEC), and put to the test several of the statutory license boundaries, such as the fact that it will burn refinery fuel instead of natural gas, a far dirtier option.

During a mid-October hearing on the application, a community member said she had great difficulty getting access to information on the facility’s air and water impacts because of the condensed process.

“If you approve the project, we’ve compromised public access and participation,” Dana Dean told the CEC in mid-October.

A vote was postponed until just last week, when the CEC agreed the project did not qualify for an emergency four-month licensing process it offers to the smallest, cleanest proposed plants. A victory for environmentalists? Hardly.

Instead, the commission went ahead and unanimously approved the project using the criteria and standards for 12-month review process, despite the fact that this project lacks the detailed studies and public review usually associated with such projects.

What’s the rush?
There is a price for such speed. The compressed review applied here and to numerous other projects undermines environmental impact studies assessing a project’s impact to endangered species or on a community’s fresh water supply, or its air quality.

It’s been more than 10 months since California declared an energy emergency, thus weakening the rules protecting the environment and assuring the public has a say in energy decisions.

Under a decree from Governor Gray Davis, plant developers could now have projects approved in four months, or as quick as 21 days with some peaker plants, in place of the 12-month process developed in 1974. Critics say the changes hurt environmental review and public participation, and have proved unnecessary considering the state has already contracted for all the power it needs.

“To take facilities with less pollution controls and rush them through the process is outrageous,” said Alan Ramo, head of the environmental law clinic at Golden Gate University.

To make matters worse, the CEC recently voted to further chip away at the legal safeguards attached to the four-month project licensing, which applied to simple-cycle facilities. Specifically, it resolved on a 3-2 vote to no longer require qualifying projects to convert to a cleaner facility, known as a combined cycle plant, in three years or cease operating.

The simple cycle, or peaking, units emit twice as much nitrogen oxides—a precursor to smog—as other plants. In addition, the CEC also allowed projects considered major sources of air pollution in the accelerated certification door.

“We will now have plants that will stay in business for the next 30 years that are dirtier and less efficient,” warned Sandra Spelliscy, general counsel for the Planning Conservation League (PCL).

CEC Commissioner Robert Laurie is one of the dissenters. He called the CEC resolution shortsighted and contrary to public policy. Commissioner Michael Moore labeled it a “reactionary document,” devoid of a critical cumulative impact analysis. The two, who are Republican appointees, pointed to CEC energy forecasts showing the state no longer faces power shortages, noting the emergency rule waivers can no longer be justified.

Just after the CEC vote, two projects applying for an expedited license were given the OK to run as simple-cycle plants for a decade. Four more projects sit in the four-month queue and about a dozen more are expected to line up this year, all of which can take advantage of the easier rules, in spite of the toll.

The state’s new power agency, the California Power Authority, plans to invest in about a dozen peakers this year to further boost the state’s energy supply, and expects them to get speedy licenses. These and other projects, which critics say are not needed, are expected to be financed by a $5 billion bond.

Pushing the envelope
Even before the most recent regulation changes, the CEC was struggling to agree on the parameters of qualifying plants for the four-month process, in no small part because developers kept pushing the envelope.

The new CEC resolution and earlier licensing changes have so expanded the category of qualifying plants that it is a different beast from the one intended by the Legislature, Spelliscy said. Many of these peaking units are far larger than the 50-megawatt facilities envisioned, and they’ll run more hours.

Following the first major outbreak of the energy crisis, the Legislature passed a bill in August 2000 allowing a limited number of generating facilities to be licensed in four months. These peakers were meant to run only on steamy days when air conditioners are maxing out the power supply.

However, the governor authorized the CEC to waive the law’s parameters in order to get more juice into the grid. Subsequently, bigger plants were proposed and qualifying projects are no longer limited to meeting peak demand.

Late last month, a coalition of environmental and consumer advocates urged the commission to undo its resolution because lawmakers created the license limitations to protect public health and the environment.

“[E]xcessive reliance on gas-fired power plants for the state’s energy needs, especially higher-polluting simple cycle plants, creates unnecessary environmental harm and negatively impacts fuel price and supply,” the group said.

The matter will be taken up at the November 14 CEC business meeting, but the commission’s Chief Counsel Bill Chamberlain said, “I disagree with the conclusion that we did anything wrong.”

Elsewhere, David Freeman, the Power Authority executive director and former head of the Sacramento Municipal Utility District, said environmentalists objecting to faster siting were interfering with air quality improvements. He asserted the new plants, which are preferable to the old ones that foul the air, will replace the spewing clunkers. There are, however, no guarantees that the dinosaur plants will be put to rest.

“If you have all this stuff lying around there will be a great temptation to use it as [power] prices go up,” said Rich Ferguson, Sierra Club’s energy chair.

Missing deadlines
The relentless push to get more gas-fueled plants up and running at a clipped pace also created a 21-day license for peaker units that could power up in time to help alleviate the expected summer supply crunch. The track record of these super-duper fast projects, however, leaves quite a bit to be desired.

Of the 10 approved three-week licenses, only six made the requisite September 30, 2001, on-line deadline. As for the delinquent projects, one fired up end of October, two will come on-line in December and the last one plans to be operational next March. Those missed deadline carried no penalty from the CEC.

“From the ordinary person’s perspective, if conditions are placed on access to a goody and you don’t meet the condition, you don’t get the goody,” said Ann Simon, senior attorney for Communities for a Better Environment. She called the express certification “legally, politically and environmentally wrong, “ adding that it appears these facilities are being disproportionately placed in communities of color.

The rules of the game will continue to be contorted in the name of more energy supplies, unless Davis cancels the electricity emergency that is due to expire at the end of the year.

Meanwhile, the known and unknown costs of ignoring the standard safeguards continue to mount, including the crowding out of renewable power.

“We won’t know what the environmental and economic long-term impacts will be,” PCL’s Spelliscy warned, “until they hit us in the face.”