The Morro Bay Power Plant: Past, Present and Future - Part 3
by Jack McCurdy
(To refresh your memory, you might want to re-visit Part One and Part Two of this three part series)
It should have been pretty obvious how the California Energy Commission was going to rule on whether it would license a new Morro Bay Power Plant after all the hearings, briefs, reports, and filings were wrapped up in early 2003.
As hearing officer Gary Fay put it as the regulatory review of Duke Energy's application to build a new plant was just starting in early 2001, "As you may have heard, we have something of an energy crisis going on in the state." The message, intentional or not, was clear.
The Energy Commission (CEC) was under enormous political pressure from then Governor Gray Davis and others, the media reported, to build more power plants in the wake of the so-called "energy crisis" in 2000 and 2001, a contrived shortage of electricity which state and federal authorities determined was caused by market manipulation by Enron, Duke Energy, and other power producers. For example, some plants were shut down without good reason in the midst of the "crisis," which created the shortage and allowed virtually-unregulated plant owners like Enron and Duke to charge astronomical prices for what electricity there was.* Duke, Enron, and other power producers were hit with numerous law suits, including one by the state of California, demanding penalties for illegal overcharging after the state went through rolling blackouts and PG&E filed for bankruptcy.
The number of new plants being built in California dwindled to zero in the 1990s because of uncertainty about investing in the state's energy market due to state deregulation of electricity generation in 1996, which also required regulated public utilities like PG&E to sell their existing plants to the merchant renegades like Duke.
The CEC's intention of getting as many new plants on line shone through during the hearings. Duke's attorney, a former CEC staff attorney, was treated like an old friend, while the CEC staff of experts, which was against licensing the plant that Duke was proposing, other state and federal agencies that sided with the CEC staff, and Coastal Alliance on Plant Expansion (CAPE) attorneys Bonnie Churney and Babak Naficy and its experts were all cast as something approaching intruders. Duke never got challenged on its claims about how near-perfect its new plant would be for air quality and aquatic life in the Morro Bay National Estuary. Those who showed how flawed those claims were, especially the CEC staff, were treated with badly-disguised skepticism and stone faces.
The CEC chairman and presiding member on the case, William Keese, let his personal prejudice slip out one time when he told a June 30, 2003 hearing that "dry cooling is inefficient . . . wet cooling is efficient." He never explained his contention or evidence behind that statement. The CEC staff, CAPE, the California Coastal Commission, California Department of Fish and Game, and the U.S. Fish and Wildlife Service had all advocated dry cooling, in which a limited amount of fresh water is circulated in the plant. This operates much like in a car radiator, in whick only a slight amount is lost to evaporation. None is used from the estuary, which means no marine life would be destroyed, compared to the estimated 17% to 33% loss of fish and crab larvae that biological studies showed would be in the estuary water carried into the proposed new plant and killed in the process called "once-through cooling" or wet cooling.
The year after the CEC decision on the proposed Duke plant, Keese resigned from the CEC and joined the board of directors of the Calpine Corporation, which has 20 power plants in California. All were approved by the CEC - some while Keese served as a member for eight years.
But, even given all those signs of what was coming, how could the CEC ignore all the hard evidence in the record - most of it put there by its own respected staff - that the plant designed by Duke would pose a significant health risk to Morro Bay residents and others downwind from particulate matter in its smokestack emissions (Environmental Protection Agency / Particle Pollution Facts)? And that it was also a threat to the vitality - and possibly even cause the collapse - of the estuary, on which the property values, businesses, and tourism of Morro Bay and even the county depend so heavily?
But the CEC did.
In its final decision in Sacramento on August 2, 2004, the full CEC voted unanimously that "we have independently evaluated the evidence, provided references to the record supporting our findings and conclusions, and specified the measures required to ensure that the Project is designed, constructed, and operated in the manner necessary to protect public health and safety, promote the general welfare, and preserve environmental quality."
On the overall issue of the plant's smokestack emissions and their effects on public heath, the decision said: "Applicant, Staff and the Air (Pollution Control) District testimony all found the Project acceptable with the FDOC (Final Document of Compliance) requirements and Conditions of Certification included." (Their conclusions were strongly challenged by CAPE and others.)
On the issue of particulate matter (PM) in emissions, it said: "Staff considers the Project's potential PM impact to be significant if left unmitigated and therefore required Applicant to provide emission offsets. As a result of the offsets required in the FDOC and Conditions of Certification, Staff believes that the PM impact will be less than significant." (These offsets would not have actually reduced or limited emissions to protect public health, CAPE showed.)
On the issue of additional air quality violations during construction, it said: ". . . modeling shows an impact of the daily and annual PM emissions during construction which will violate the standards. . . . the area of violation is close to the Project site, most likely within the existing PG&E transmission switchyard. However, no new violations of the state PM standard are predicted at residential locations in Morro Bay. . . .Staff emphasizes that the modeled violations are temporary impacts that would only occur during the construction phase of the Project." (A staff report stated that emissions could spread "several hundred kilometers" from the construction site but noted, "Although several of the modeling assumptions combine to overestimate impacts..., other assumptions serve to underestimate impacts." The report also showed that far from being "temporary," the construction period was estimated to be more than five years.)
On the issue of controlling emissions, it said: "Once the Project enters its operational phase, Applicant proposes to mitigate any emission increases from the Project using a combination of clean fuel, emission control devices and emission reduction credits. . . .The remaining emission increases from the Project are then mitigated by the surrender of ERCs (emission reduction credits) generated at the site of the existing plant and by other ERCs purchased from offset holders within the vicinity of the Project." (CAPE emphasized that the emission reduction credits were nothing more than paper credits and did nothing to actually limit emissions.)
On CAPE's argument (quoted in the decision) that "even the slightest increase in local PM caused by the Project will have a significant adverse impact on the public health of the citizens of Morro Bay, especially children and the elderly," it said: "The Staff witness testified that at such low levels, 'we don't expect . . .any significant health impacts would occur if just a very small addition were made.'" (That was the opinion of Duke's expert witness. Scientific evidence submitted to the CEC supported CAPE's point.)
With respect to the proposed new plant's impacts on the Morro Bay National Estuary, it said: " . . .the proposed Project will have less impact on the aquatic environment than the existing power plant. Based on the requirements of the California Environmental Quality Act, (CEQA) the proposed Project will have no significant adverse impact on the aquatic environment." (The CEC staff went to great lengths to document that this is false because the new plant would use more water containing more larvae and therefore have a greater environmental impact on the estuary.)
On the issue of Duke's own study showing between 17% and 33% of crab and fish larvae in the estuary would be killed in water diverted into a new plant for cooling purposes, it said: " . . .the proposed Project will cause a maximum 16.2 percent proportional mortality of susceptible aquatic species as a result of these organisms being entrained in the Project's once-through cooling water system. Though less than the impacts of the existing plant, such an adverse effect must still be addressed under the
provisions of the federal Clean Water Act. Section 316(b) of the Act requires the use of 'best technology available' (BTA) to avoid impacts." (The CEC provided no scientific basis for claiming the 16.2% mortality rate instead of the 17% to 33% figure, which both the CEC and Regional Water Quality Board staffs supported. Duke had claimed 10%, which even the CEC ignored.)
On the issue of dry cooling, it said: " . . .even if dry cooling were feasible and cost free, it would not offer the environmental benefits to the Morro Bay Estuary that a successful HEP (habitat enhancement program) will provide. The record is clear that even without operation of the existing or the proposed new power plant, the Morro Bay Estuary is on a path of rapid decline, largely due to sedimentation. The HEP proposals associated with Duke's Project offer the most promising opportunities available to slow sedimentation and help preserve the estuarine environment of Morro Bay." (Dry cooling would eliminate the killing of aquatic life because no water containing it would be diverted into the plant. HEP's mitigation of larval losses was purely speculative, as the staff pointed out. Duke's money was not needed to limit sedimentation; it was readily available from other sources, so on that count HEP was of no use.)
(* The San Francisco Chronice reported on June 2, 2001 that "Duke Energy Inc. acknowledged yesterday that it charged nearly $3,900 per megawatt hour for some electricity it sold in California earlier this year, making it the highest known price any out-of-state power company has charged during the state's energy crisis. " To charge $3,800 for something it costs them under $50 to produce is just outrageous," a spokesperson for Governor Davis said. "There's profit and then there's gouging." Duke reported record profits of nearly $1.3 billion during the first quarter of 2001, a 48% increase over the same period one year earlier.)
Belted Kingfisher image on banner by Cleve Nash
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