Last year the City and County of San Francisco and the State of California settled a legal case with the Williams Companies, that arose from a dispute over alleged manipulation of the California wholesale electric market. As a result of that settlement, the San Francisco Public Utilities Commission (SFPUC) has been given the opportunity to develop four new gas-fired combustion turbine generators into operating electrical power plants that will allow for the permanent closure of the Hunters Point power plant.
The SFPUC is now in the process of siting these combustion turbine-generators. The siting is challenging given the scarcity of industrially-zoned property in San Francisco and stringent milestones imposed on the City by the State.
These milestones are included in a Power Purchase Agreement (PPA) between the city and the California Department of Water Resources (DWR). The agreement is structured so that the City will recover the costs of building and operating the power plants over a 10 year period, regardless of how much power the plants produce. While this agreement protects the City from financial risks associated with power plant development, it also requires that the SFPUC move quickly and effectively to site and develop the four combustion turbine-generators. Lack of progress could result in the loss of the PPA and the return of the combustion turbines to the State.
Major schedule milestones for the project include obtaining land control by December 31, 2003; submitting a complete application for plant development to the California Energy Commission (CEC) by January 31, 2004; and obtaining commercial operation by June 1, 2005.
Improving Air Quality in Southeast San Francisco
The SFPUC intends to integrate one of the combustion turbine-generators into a cogeneration power plant to serve the downtown district heating system and to site the remaining three combustion turbine-generators as simple cycle power plants. Air quality in southeast San Francisco will be substantially improved by incorporating the best available emission control technology into the design and construction of these plants. Not only will air quality in the Bayview-Hunters Point area be better because of the shutdown of Hunters Point Unit 4 (see the Figure on page 4), but air quality in the Potrero neighborhood will also be improved due to a reduction in the hours of operation of the existing Potrero power plants. Because these existing power plants are less efficient and more polluting than the new combustion turbine-generators, the emissions from the new units are far more than offset by the reductions in emissions from the older power plants. The charts on page 15 show the reduction in emissions for the two most important regulated pollutants, oxides of nitrogen and small particulates.
Siting the Combustion Turbines
The SFPUC developed criteria for siting the combustion turbine-generators considering the goals of the Electricity Resource Plan, the policy objectives expressed by the Board of Supervisors in settling the legal dispute with the Williams Companies, schedule constraints imposed by the DWR power purchase agreement, and general power plant siting requirements. The criteria state that the siting should:
1. facilitate the shutdown of Hunters Point Power Plant in 2005
2. improve San Francisco's air quality
3. include full and direct mitigations for neighborhoods affected by new combustion turbine operations
4. support the siting of solar and other clean-power technologies
5. be consistent with city zoning and planning
6. minimize noise and visual impacts
7. meet requirements of DWR power purchase agreement
Applying the Criteria--The Combustion Turbine Siting Process
The siting process first looked at the availability of industrially zoned land within the city. As illustrated on page 4, the industrially zoned land is all on the eastern side of the city. Although the shaded area represents approximately 14% of the city's land area, the area that can be considered for power plant development is significantly less because the Hunters Point Shipyard is owned by the federal government, and because some of the industrially zoned land borders residential areas.
Next, the four 115 kV substations were overlaid to determine the proximity of points of interconnection with industrially zoned land. Note that there is no industrially zoned land adjacent to the Larkin substation. Of the three 115 kV substations located near industrially zoned land, Potrero and Hunters Point are outdoor substations while the Mission substation is enclosed in a building. In discussions with PG&E, it was estimated that reconfiguring the Mission substation to accommodate the interconnection would cost approximately $5 million.
The natural gas supply lines that have adequate capacity for the combustion turbines are routed adjacent to the Hunters Point and Potrero substations and terminate at Seventeenth and Missouri, approximately 1.9 miles from the Mission substation.
Multiple sites were considered in the site evaluation process. Examples of sites that were rejected early in the process include the Caltrans property near the Embarcadero substation (A), property next to the United Cogeneration power plant at SFO, and a site near the Southeast Wastewater Treatment Plant (F).
The Caltrans site is located near the Bay Bridge on land that Caltrans currently intends to use for freeway off-ramp seismic improvements. A plant at this site would have to interconnect at the Mission substation. Interconnection costs for both electric and gas at this site would be very expensive. In addition, due to the lack of construction "lay down" space, installation costs would be very expensive.
The airport site, located near the United Cogeneration facility at the United Airlines Maintenance Facility, is considered a promising site in many respects. However, PG&E has indicated that without the installation of additional transmission capacity from the Martin Substation into the city, generation at the airport will not facilitate the shutdown of Hunters Point.
The Southeast Sewage Treatment Plant (F) offers a site on land that the SFPUC owns. The site is close to the natural gas pipelines and could be electrically looped into the new 115 kV transmission line that will be built between the Potrero and Hunters Point substations. The major drawback with this site is an environmental justice consideration, given the impact the sewage treatment plant and other industrial facilities already have on the community.
In the vicinity of the Potrero substation, three sites were investigated: the Western Pacific site (E), located on Port of San Francisco property just north of Islais Creek, a site at the Potrero Power Plant, directly adjacent to the Potrero substation (D), and a Port of San Francisco site, located on Pier 70 (C).
The Western Pacific property is a brownfield site adjacent to the Port of San Francisco's container terminal. The eastern edge of the property borders the bay, while directly to the west MUNI has plans to build a new streetcar maintenance facility. The major drawback to this site relates to State Land Trust issues that prevent the use of this property for a power plant site.
The Potrero power plant site is also an excellent brownfield site that offers very low interconnection costs. Since the land has been used as a power plant site for over 50 years, it has some community acceptance. However, the city has been unable to purchase the property from the Mirant Corporation.
The Port of San Francisco's Pier 70 site is a brownfield site directly north of the Potrero power plant and directly east of Irish Hill. In addition to its proximity to natural gas and a 115 kV substation, Irish Hill provides both a visual screen and a noise barrier to shield the plant site from observation points both in the local neighborhood and on Potrero Hill. While this land is also in the State Land Trust, Trust issues are significantly less than for the Western Pacific property due to the length of time that the Pier 70 site has been held in trust. The site, considering its low visual and emissions impacts, represents a reasonable environmental compromise and is viewed as the best Potrero site.
Another site that is under review is the NRG thermal plant at Fifth and Jessie Streets (B). The NRG steam plant currently operates around the clock to produce steam to meet the needs of the buildings served by the downtown steam loop. Steam demand varies from 40,000 up to 340,000 pounds per hour. The steam is generated from four old boilers. Other than the existing power plants at Potrero and Hunters Point, these boilers, which produce approximately 20 parts per million of nitrogen oxides (NOx), represent the largest stationary NOx emissions source in the city. There is adequate space at this site for building a power plant, but due to the height of buildings nearby, the plant would have to be enclosed for noise and visual considerations. Further, to adequately follow the steam load, the plant would have to be configured as a combined cycle facility. This plant design, combined with the high interconnection costs at the Mission substation and a 1.9 mile gas pipeline run, indicate that the Fifth and Jessie site will have high capital costs.
The Fifth and Jessie site satisfies the other siting criteria. It will facilitate the shutdown of Hunters Point Unit 4. Visual impacts are minimal due to the presence of the existing steam plant and the site's location in an alley. And, it locates a gas turbine away from the Bayview--Hunters Point and Potrero areas. Additionally, approximately half of the NOx emissions produced by the new combustion turbine will be offset by displacing emissions from the existing steam plant, further minimizing impacts. Although land control presents some challenges, improving steam plant efficiency can potentially benefit all parties. The biggest challenge for this site is to justify the high capital costs.
To offset these costs, the facility must operate at a high capacity factor, thereby spreading the capital charges over more hours of operation. Fortunately, the steam load also requires operation at a high capacity factor. The California Independent System Operator (ISO) currently operates either the Potrero or Hunters Point 4 units around the clock to provide operational flexibility for managing the grid and voltage support for the peninsula. The ISO indicates that continuous generation in the city will be desirable for the foreseeable future. Economically, the viability of the site depends upon whether, in combination, the energy value, location value, and steam benefits will justify the high capital costs.
It is obvious that new power plant development in San Francisco will be challenging. The SFPUC has methodically developed criteria and screened the available sites. Property adjacent to the Potrero substation offers the most potential. Of these sites, the Port of San Francisco Pier 70 site has the greatest promise, given the tight schedule and difficulties in obtaining land control. The Fifth and Jessie site is also promising for the siting of one combustion turbine. However, for that site to be successful, economic challenges must be overcome.
The next step in the process of siting the combustion turbines will be to obtain site control of the preferred sites. For City-owned land this would entail a memorandum of understanding between City agencies. For a privately-held property it would require an option to lease or purchase between the City and the landowner. Once site control is obtained, the SFPUC would begin the process of preparing a comprehensive plant design and environmental assessment. That document, called an "application for certification," would be submitted to the California Energy Commission after consultation with communities of interest in San Francisco. The Energy Commission would then begin its review of the application and hold public hearings before granting a permit to construct the power plant.