The energy crossroads SFBG News | February 14, 2001 | The energy crossroads > [http://www.sfbg.com] State leaders want more power plants and "streamlined" regulations. But what California – and the planet – really need is sustainable energy. By Rachel Brahinsky CALIFORNIA'S ENERGY CRISIS was political manna from heaven for President George Bush. Seizing the moment, he crowned Vice President Dick Cheney, a true oil industry man, as his energy point person, setting a defining tone for his administration. What better political cover for gutting environmental regulations – and quickly plundering Alaska for oil – than an energy crisis? Gov. Gray Davis is but a few small steps behind the cowboys in the White House. With the nation watching, the governor has stepped up the development of fossil fuel-burning power plants and created a "streamlined" regulatory process designed to skirt opposition and get the plants up and running as soon as possible. That means more nonrenewable, polluting energy factories and more global warming. Critics say Davis is banking on the notion that Californians simply want the juice turned on, no matter where it comes from. By doing so, he's missing a unique opportunity for the Golden State to lead the nation toward a renewable-energy future. Davis's response to the deregulation crisis has in fact extended a precarious, toxic precedent for the future of energy in California. By focusing on a fossil fuel-driven policy, Davis is repeating proved mistakes of the past. It's a plan that may not even be necessary: California is already teeming with power plants that have been shut down temporarily for undisclosed reasons (on Feb. 8, 30 units were down). Two lawsuits have been filed alleging that those plants were taken off-line specifically to create an artificial shortage that would raise costs. There is an added environmental effect: to help make up for the California shortfall caused in part by off-line plants, the dirtiest power sources, like coal-fired generators in Nevada, have been pumping out more power than normal. Some of the governor's sharpest critics say that solving the off-line power plant mystery should top his agenda. "Before the state starts suspending sensible public health and environmental standards, before they start circumventing the rights of citizens to protest huge projects in their communities, they need to start investigating the plants that are off-line," Tyson Slocum, senior researcher for the Washington D.C.-based Public Citizen Energy and Environment Program, told us. The debate over power plants is igniting a battle over the state's future energy-generation policy. Will California continue its long-held emphasis on fossil fuels and nuclear power? Or will it lead the rest of the nation by making major investments in cleaner, sustainable technologies? It's a battle with international ramifications. As the world's sixth-largest economy, California makes energy decisions with global significance, and the state could provide the example and leverage for sustainable-energy initiatives in other states and nations. Expanding fossil fuels – and reviving talk of building new nuclear power plants, as some legislators are now doing – delays fundamental shifts to renewable and other sustainable energy sources, shifts that experts say are essential to sustaining life on the planet. (Renewable energy sources generally include solar, wind, small hydroelectric, geothermal, and biomass.) Of all fossil fuels, "natural gas is clearly the most benign," Ross Gelbspan, former Boston Globe reporter and author of The Heat Is On: The High Stakes Battle over Earth's Threatened Climate, told us. "It has about half the amount of carbon as coal. [But even with that] we're increasing the impact on the atmosphere." Gelbspan noted that last year a United Nations panel of more than 2,000 scientists released a report on climate change predicting that unless the world's fossil fuel consumption is cut in half by 2018, carbon dioxide levels in the atmosphere will quadruple. "The prediction is really clear: more carbon means much more protracted heat waves; the sea levels will rise [which would threaten the California coast]. We'll have more extreme weather, continued melting in the poles, migration of species north, and the spread of infectious diseases," Gelbspan said. Davis's emphasis on more fossil fuels, Gelbspan said, is reckless. "Given the fact that this is really known, and given the fact that this represents the opinion of the United Nations, it strikes me as extremely irresponsible to be building new fossil fuel plants." While it would seem that Davis and the utility industry hold the power in their hands, the crisis has also revived long-dormant public support for energy conservation and sustainable resources like sun and wind. "We could turn this energy crisis into a positive thing by focusing on wind and efficiency," argues energy writer Peter Asmus, author of Reaping the Wind. "Instead of streamlining all of these [fossil fuel plants], we should be streamlining solar, wind, and energy efficiency." Pumping gas Davis's various energy initiatives all hinge on his executive order to rapidly construct a raft of new power plants statewide. But, as Public Citizen's Slocum pointed out, with energy imports from other states and with the productive potential of the off-line plants, the state may already have just about all the power it needs, even for peak summer days. A Jan. 30 Public Citizen Report argues there nay not be a shortage after all. Yet at a Feb. 8 press conference, Davis made it clear that he's hitching the fate of California's energy supply to natural gas. After acknowledging that a natural gas shortage has been a major contributor to California's high energy prices, he then reemphasized his commitment to the fuel. "Increasing reliance on natural gas is driving up the price, and that is reflecting itself in the cost of natural gas bills that people are receiving. I expect that system will stabilize itself over the next three or four years," Davis said. "Natural gas is the most environmentally friendly, clean, appropriate fuel," he added. "So you'll see a good deal of reliance on natural gas." The governor's faith in a single, finite resource has drawn sharp criticism. "If the prices for electricity are volatile today due to natural gas price swings, they will only get more so if an increasing percentage of your electricity comes from more natural gas plants. That's just simple logic," said Karl Rabago, managing director of the Colorado-based Rocky Mountain Institute, which specializes in alternative energy. Since natural gas already serves a third of the state's electricity needs, he says, this policy exacerbates "the impacts of fuel price volatility, and you miss the opportunity to genuinely diversify the portfolio with different fuel resources like wind and solar." To push plant production forward, Davis is planning to provide million-dollar bonuses for developers who bring power plants on-line by July 1. Applications for new power plants will get "streamlined" treatment. Under the current rules, it can take more than a year to approve an application. A lot of that time is set aside for citizens to participate in the process through public hearings; it also allows for studies on the projected impact on the health of nearby residents. Davis is cutting this timeline to as little as 120 days, or four months. For smaller plants, called "peakers," designed only for use at peak times, the review has been cut from four months to as little as one week. We asked Davis's deputy press secretary, Roger Salazar, what gets cut out of the process. "Time," he said. "We're asking them to make their review in an expedited way." Salazar and Davis's newly anointed "permitting czar," Winston Hickox, insists that this new streamlined process will not come at the expense of the state's environmental controls. But if they don't see how the plan will slash environmental controls, Bush clearly does. Davis sent a letter to Bush last week, asking that he ensure that all relevant federal agencies, like the U.S. Fish and Wildlife Service and the U.S. Environmental Protection Agency, help move the permits through quickly. Afterward Salazar found himself running spin control. "The White House said on Friday that inherent in the governor's move is to waive environmental regulations," he said. "That's not true. We have the ability to speed up the process without relaxing regulations." But the Sacramento Bee reported Feb. 9 that to move things along, state environmental officials plan to cut the requirement that power plants be fitted with smog-control equipment. Salazar refused to confirm this. He did say that Davis is allowing operators at existing facilities to increase their production hours. Companies that exceed legal air pollution limits can pay into a fund that supports future cleanup projects, or they can agree to install better emissions controls in the future, Salazar told us. That's an order that could affect San Francisco, where the PG power plant in Bayview-Hunters Point remains a major source of generation – two years after the city cut a deal with PG to shut the plant down. This deal came after evidence showed the plant's pollution contributed to asthma in the neighborhood surrounding it. But until the city has a sufficient alternative, the Hunters Point site remains active. Davis is setting aside some money for energy conservation and green power. He proposes spending $50 million to increase the state's renewable rebate program and $50 million in business loan guarantees for renewable-power systems, as well as instituting a 50 percent tax credit to encourage businesses and homeowners to install these systems. These funds would build on the $540 million that the state has already set aside to support independent renewable-energy development under the 1996 deregulation law, and an additional $135 million through 2012. Davis has also released $404 million in new funds for energy conservation, adding to an existing pot of $424 million. It may sound like big bucks, but critics say these efforts amount to token gestures when compared with the funds the state has devoted to dirty power. And it's not nearly enough money for what's really needed. "Consider the fact that $10 billion has been earmarked for buying long-term power from basically existing fossil fuel generators," energy writer Asmus said. "A fact to keep in mind is that one billion would get you about a thousand megawatts of wind power capacity." That's enough to light up the whole city of San Francisco during peak wind hours. And new wind turbines have a long shelf life: they're expected to last 20 to 30 years, without increasing air pollution. Others fear that Davis's rushed plan, under the cloak of repairing the "crisis," will result in more power plants located in low-income communities of color, whose neighborhoods are already disproportionately targeted for power plant development. These communities, they worry, could be pressured to table any concerns they may have, in the name of bringing the state more energy. That's what happened last summer, when Davis first issued an order allowing "peaker" plants to be built quickly. Among the seven proposed projects was one planned for the PG substation next to Daly City's Midway Village housing project, where residents are already dying of cancer and other illnesses that may be linked to ground poisoning from the PG site. Pollution at that site is already so bad that it has been named a state Superfund site. Bradley Angel, executive director of the nonprofit Greenaction, told us that he discovered the power plant proposal by accident. "The only reason we found out was because we went to a meeting about power plants and happened to ask about the peaker projects," Angel recalled. "They mentioned [PG's] Martin Service Center. It was going to be a [truck-mounted] power plant, sponsored by Calpine, brought on to the PG site – built on and next to a Superfund site. The community was not notified." Nearby residents immediately launched a phone campaign, Angel said, informing Calpine's CEO that "if they tried to bring the truck in, they would be greeted by a blockade. The project was shortly thereafter dropped." The Midway Village example is particularly chilling, because of the toxic history of the site. Ironically, if activists weren't already focused on the health problems of the area, they might not have heard about the project early enough to have an impact. With Davis revving up plant development all over the state, watchdog groups will be hard-pressed to catch all the potential disasters like the Midway project. It comes down to a choice between making aggressive efforts to use less power and continuing the pattern of environmental injustice, Rocky Mountain Institute's Rabago told us. "There's a lot of good evidence that poor people, people of color, suffer the adverse impacts of power plants," he said. "So the real question is, are we going to make it easier to build power plants in the backyards of poor people just so everybody else doesn't have to get efficient about their use of energy?" A green future? It's been nearly 30 years since energy took center stage in the United States. After the oil crisis in the 1970s, Americans began talking about alternative fuels out of necessity. The crisis propelled President Jimmy Carter and then-California governor Jerry Brown to fund serious conservation measures and alternative technologies. California became a national model for clean energy. But the administrations that followed only rolled back their reforms, and today these alternatives are relegated to the sidelines. Lawmakers sold California's 1996 deregulation law to environmentalists by including some money for conservation and by arguing that greater competition in the marketplace would enable small energy companies, including producers of green power, to emerge and thrive. But that never happened. The utilities had no real incentive to urge customers to conserve – that would reduce their profits – and the competitive marketplace that fully collapsed last month never truly emerged. Of the approximately 12 small "green power" companies in the market at one time, 4 remained by the summer of 2000, according to Kirk Brown of the Center for Resource Solutions. This winter, one by one, the green firms stopped doing business in California when the utilities stopped paying their power bills. When Davis's $10 billion plan for power purchasing passed Feb. 2, the lone marketer, Green Mountain, was knocked out of the picture. So the state's renewable resources are at a standstill, while dirty power remains the dominant source of energy. Since 1990, renewables have nudged up slowly from 11 percent to 12 percent of the state's power. Meanwhile the state depends on coal for 20 percent and nukes for another 16 percent of its energy. Hydroelectric power and natural gas make up the rest. But clean-power advocates say that California should – and could – be doing better. There are proved alternatives that continue to get cheaper, and these alternatives should be central to any new energy policy that emerges from the current crisis. "The key to making it work is getting out of wholesale power, to reduce dependency on centralized generation," Paul Fenn, of the Oakland-based Local Power Project, told us. That move, he said, requires government commitment. "Say you need a 10-year payback on a large solar facility; it's no different than a natural gas facility. It's just saying we'll give our debt to natural gas. Instead, why not put money into solar debt?" A new wind system would be comparatively cheap, according to energy expert Dan Berman, costing just 4¢ to 5¢ cents a kilowatt-hour (10,000 of those kilowatt-hours would service San Francisco). Berman, coauthor of Who Owns the Sun?, is an analyst in the state's Office of Ratepayer Advocates, although his views do not necessarily reflect the opinion of that office. "Five cents – that's cheaper than natural gas when you account for the price of fuel. That's cheaper than what the governor is saying he's going to spend on these contracts. Why aren't the governor and the legislature thinking of these things?" Berman proposes massive investments in solar and wind projects. "If you put a billion a year into wind and a billion a year into solar installations, you could put in 12,500 megawatts of renewable peak capacity (enough to serve more than 25% of the state on a hot summer day) in 10 years." That level of investment still pales in comparison to what ratepayers have spent to underwrite the state's nukes: $14 billion under the deregulation law alone. Beyond the immediate importance of clean-power technologies for California, these measures could spawn similar plans nationwide; mass requests for new solar panels by such a large state could reduce the costs of the technology quickly. Energy experts say this is essential, because the economic and ecological effects of California's failed experiment in deregulation have already rippled through the rest of the nation. Now, a few states that were following California in lockstep have paused their own deregulation efforts. In some states there are signs of resentment about California's growing energy needs. This anger could be used as political pressure to change the direction in which Davis is taking the state. "With Bush at the top, it's hard to see that changing," Asmus told us. "But maybe this is what's going to get citizens so enraged that they're going to take back their own power supply." [http://www.sfbg.com/searchit.html]