Saturday, August 5, 2000

Pollution Rules Tighten Squeeze on Power Supply

By NANCY VOGEL, Times Staff Writer

SACRAMENTO--California's already severe electricity squeeze could tighten further this summer if regulators don't ease up on air pollution rules, power company officials said Friday. The state's 1,000 power plants--many aging and burning natural gas--have been running so hard and long in this summer of electricity scarcity that many are close to spewing as much pollution as they are allowed for the year under their permits.

Without flexibility from air pollution regulators, the plants could be forced to shut down or face fines. This summer California cannot afford the loss of any of those plants at times of peak demand, said the state's last-resort buyer of electricity. "I can't tell you whether we are in big trouble or medium trouble," said Terry Winter, who oversees the nonprofit agency that buys last-minute supplies when electricity consumption spikes so high that it threatens to disrupt the state's high-voltage grid. "If it stays really hot and we've got to run every unit," said Winter, "then we've got a problem. If it cools off a little bit, we could turn off those units exceeding their permits and we won't have a problem at all. My sense is, by late August we'll be seeing the problem more severely. But we're working on it." Local and state air pollution regulators say they recognize the problem and will do their best to help avoid outages. "I was flying by the seat of my pants," said Richard Baldwin, head of the Ventura County Air Pollution Control District, who hurriedly struck a deal last week to keep a gas-fired turbine running on the Ventura County coast. The plant, which would have otherwise been shut down for the rest of the year because of air pollution rules, is owned by Houston-based Reliant Energy, one of the major players in California's recently deregulated electricity market. Under the deal, Reliant will pay the air district $4,000 for every hour it runs the relatively dirty plant the rest of the year. The money will go toward replacement of heavily polluting diesel engines.

The agreement means that California's grid operators can now count on the plant to produce enough electricity to supply 125,000 homes. On a hot day in late July they desperately needed that electricity, but could not get it because Reliant's air pollution permit allowed 100 hours of operation each year and only five remained.

"Those air quality districts could just throw up their hands and say no, not our problem," said Winter, executive director of the California Independent System Operator, the nonprofit entity that runs most of California's electric grid, "but they have all been very responsive."

He said his Folsom-based staff foresaw the problem and has been talking with the U.S. Environmental Protection Agency, the California Air Resources Board and the local air districts that set pollution limits for individual power plants.

"They have been very, very cooperative in trying to figure out ways to allow us to continue to generate but at the same time not add more pollutants to the air," he said. One way to do that, Winter said, may be to not run power plants in the evenings, when demand dips. "We don't want to put the lights out in the state," said Bill Kelly, spokesman for the South Coast Air Quality Management District, which issued a letter to power producers two weeks ago warning that many will soon bump against their air pollution limits. "We asked them, if they're going to be above their caps, to come in and work with us on compliance plans," Kelly said. "These plans would be developed through public hearings."

What can be done will vary with every plant in the state, said V. John White, who sits on the Cal-ISO board and directs the Center for Energy Efficiency and Renewable Technologies in Sacramento. Air quality will not suffer significantly, White said, "with some creative application of rules and the principle that you've got to pay for the pollution somehow." The root of the current conflict between air pollution and energy production lies with California's failure in the last 10 years to build any major power plants. Demand for electricity in the state's humming economy has soared higher than anyone anticipated, while new supplies are not expected to reach the grid for at least a year.

Several times this summer, grid operators have had to frantically purchase electricity elsewhere in the West to save the state from outages that can endanger lives and cost high-tech companies as much as $30 million a day in lost production. The shortage of electricity compromises air quality. When businesses voluntarily disconnect from the grid at times of highest demand, they often turn on diesel generators to maintain computer and phone systems. Such generators spew toxic air contaminants, particulates and higher levels of nitrogen oxides than most power plants. The tight supplies this summer also mean that California's old, inefficient power plants are running harder than ever and those built just for backup are running steadily. Duke Energy's power plant in Oakland helped keep lights on in the city after a disastrous 1989 earthquake. Typically, the costly plant operated 30 to 50 hours a year; its air pollution permit allows no more than 870 hours annually. So far this year, said Duke spokesman Tom Williams, the plant has run more than 500 hours. "The turbines date to late 1970s," he said. "They're being called on more and more." North Carolina-based Duke purchased or leased several major power plants from utilities such as Pacific Gas & Electric Co. and San Diego Gas & Electric after the Legislature deregulated the state's electricity market in 1996.

One plant, in Chula Vista, generates enough electricity for 700,000 homes in San Diego, where transmission problems leave the city especially vulnerable to power sags and surges. That plant is rapidly approaching its limit on nitrogen oxide pollutants, Williams said. "We're evaluating our options about how to address this problem."

http://www.latimes.com/news/front/20000805/t000073364.html

-- Martin Thompson (mthom1927@aol.com), August 05, 2000