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Enron Mail |
Here is information on the ability of CA generators to run in excess of the=
ir=20 orginal offset NOx quantities. Alan Comnes -----Original Message----- From: Schoen, Mary =20 Sent: Monday, June 18, 2001 3:23 PM To: Comnes, Alan Cc: Guerrero, Janel Subject: Re: FW: Davis Eases Power Plant Pollution Rules The following is more explanation about the recent Executive Order (EO)=20 signed by the Governor of California on June 11, 2001. In order to avoid= =20 future blackouts, Governor Gray Davis is waiving limits on hours of operati= on=20 and the associated emissions for natural gas-fired peaker units if they=20 adhere to certain conditions. He is requesting local air districts to allo= w=20 natural gas-fired peaker power plants to operate in excess of their hourly,= =20 daily, quarterly and/or annual emission limitations if they do the followin= g: 1. Agree to sell power to the California Department of Water Resources or t= o=20 a utility located in California=20 2. To serve an operating utility=01,s own load 3. Agree to sell to another California-based utility The gas-fired peaker units must also pay a mitigation fee to the local air= =20 districts of $7.50 per pound of oxides of nitrogen (NOx) and $1.10 per poun= d=20 of carbon monoxide (CO) emitted. (The Governor set this number - it is,=20 however, the same amount the South Coast AQMD is charging for NOx offsets i= n=20 the modifications it made to the RECLAIM program.) These mitigation fees wi= ll=20 be used to clean up or retire other sources of pollution in the same air=20 basin. The Governor is ordering the California Air Resources Board to work= =20 with the Environmental Protection Agency to ensure that power plants willin= g=20 to operate under this order obtain the necessary approvals. As you know, there are many peaking plants that are close to exhausting the= ir=20 allowable operating hours. Once these facilities exhaust the amount of=20 allowable hours they would have to either shut down the units or negotiate = an=20 agreement with the local air agency to continue to operate. With the=20 exception of Mirant Potrero in San Francisco and Reliant Energy Mandalay in= =20 Ventura County, no facilities have negotiated such agreements. The EO issu= ed=20 by the Governor gives the peaker facilities a blanket approval to operate= =20 beyond the restrictions. The Governor believes that waiving of the=20 requirements will also minimize reliance on backup diesel-fired generators,= =20 which have even higher emissions than the natural gas peakers. In my=20 previous discussions with the US EPA Region 9, they did say they were willi= ng=20 to work with the state to provide variances to power plants' operating=20 limits. However, in the two instances mentioned above, the EPA required t= he=20 plants to agree to install pollution control equipment at a specific future= =20 date. This aspect of the agreement was critical to EPA, because the=20 increased emissions from the peakers with increased hours are now significa= nt=20 enough (major source status) to trigger New Source Review which requires=20 installation of Best Available Control Technology (BACT). The EO by the=20 Governor makes no mention of future controls. According to municipal utilities and other generators, the Governor's actio= n=20 could provide up to 1,200 Megawatts of additional power this summer by=20 expanding the number of hours of operation at natural gas-fired plants. T= he=20 EO will expire on October 31, 2001, unless revoked, modified or extended by= =20 further executive order. The air director of the Ventura air board has=20 already sent comments opposing this order due to its negative air impacts. = =20 Environmentalists will also no doubt object. The EPA has not yet responded= . =20 Despite the potential negative environmental effects, the political pressur= e=20 will be strong to let these plants operate. I will keep my ears open for= =20 additional developments on this matter, please let me know if you have any= =20 questions. From: Alan Comnes/ENRON@enronXgate on 06/12/2001 11:57 AM To: Mary Schoen/NA/Enron@Enron cc: =20 Subject: FW: Davis Eases Power Plant Pollution Rules=20 Mary, Any insight into this latest change would be appreciated by the traders. I= s=20 this order any different than the SCAQMD $7.50/ton program already=20 implemented? Will EPA allow that state to do this? Thanks, Alan Comnes -----Original Message----- From: Comnes, Alan =20 Sent: Tuesday, June 12, 2001 9:55 AM To: Alonso, Tom; Alvarez, Ray; Badeer, Robert; Belden, Tim; Calger,=20 Christopher F.; Dasovich, Jeff; Driscoll, Michael M.; Fischer, Mark; Foster= ,=20 Chris H.; Guzman, Mark; Hall, Steve C.; Heizenrader, Timothy; Kaufman, Paul= ;=20 Mainzer, Elliot; Mallory, Chris; Mara, Susan; Motley, Matt; Perrino, Dave;= =20 Platter, Phillip; Richter, Jeff; Scholtes, Diana; Swain, Steve; Swerzbin,= =20 Mike; Williams III, Bill; Wolfe, Greg Subject: Davis Eases Power Plant Pollution Rules=20 =20 Tuesday, June 12, 2001=20 Davis Eases Power Plant Pollution Rules=20 Electricity: Order will allow more production from heavily polluting=20 'peaker' facilities.=20 By DAN MORAIN, Times Staff Writer SACRAMENTO--Gov. Gray Davis agreed Monday to lift air emission limits = on=20 heavily polluting power plants and allow them to run at capacity this summe= r=20 as long as the electricity they produce is sold in the state.=20 State officials said the plants must be pressed into use to avoid=20 blackouts.=20 Davis' executive order lets the generators build the cost of air=20 pollution fines into the price the state pays for electricity produced by= =20 natural gas-fired power plants, said Catherine Witherspoon of the Californi= a=20 Air Resources Board.=20 Municipal utility districts--including the Los Angeles Department of= =20 Water and Power--and independent power companies could supply as much as=20 1,200 megawatts from so-called peaker plants, facilities that generally are= =20 permitted to operate for only a few hundred hours a year because they pollu= te=20 so heavily. That is enough power for more than 1 million homes.=20 Other gas-fired power plants that have been shut down because of air= =20 pollution restrictions also could be started up as a result of the order.= =20 In a news conference Monday, state officials said the order will have= =20 the effect of lowering air pollution by limiting the use of far dirtier=20 diesel generators, which industry could use if power supplies are threatene= d.=20 "If we don't get every last megawatt we can [from natural gas-fired=20 plants]," said Witherspoon of the air board, "we will see people turning to= =20 diesel more frequently."=20 Added Kellan Fluckiger, a top energy advisor to Davis: "If you don't r= un=20 these, you're either going to have outages or you're going to run something= =20 dirtier."=20 Fluckiger said the order expands "the number of hours these things can= =20 run and the amount of energy they can produce."=20 New natural gas-fired power plants emit about half a pound per=20 megawatt-hour of operation of ozone-producing pollutants. The plants affect= ed=20 by the order emit between two and five pounds of oxides of nitrogen per=20 megawatt-hour.=20 If the plants are pressed into operation for 200,000 megawatt-hours th= is=20 summer, there will be between 400,000 and 1 million additional pounds of=20 oxides of nitrogen emitted into the air.=20 The state probably will end up paying the fees associated with the ext= ra=20 pollution through higher electricity prices. The fees amount to $7.50 per= =20 pound of oxides of nitrogen--or $7.5 million if the plants operate for=20 200,000 hours--and $1.10 per pound of carbon monoxide emissions. The money= =20 would be used to reduce air pollution from other sources.=20 "Under this order, dirty power plants can run as long as they want and= =20 pollute as much as they want so long as they pay into a fund," said Gail=20 Ruderman Feuer, senior attorney with the Natural Resources Defense Council.= =20 "Our concern is that there's no guarantee that the fund will result in=20 emission reductions any time soon."=20 A Ventura County air pollution control official said that running one= =20 peaking power plant operated by Reliant Energy for one hour is the equivale= nt=20 of adding 20,000 new cars to Ventura County highways for an hour. Reliant= =20 Energy could not be reached for comment Monday night.=20 "To the extent that they run when not needed for an emergency, it's=20 going to put more air pollution into Ventura County skies and it's going to= =20 make our air dirtier," said Dick Baldwin, air pollution control officer for= =20 Ventura County.=20 Los Angeles DWP Director David Wiggs hailed the order, saying it was= =20 needed so the city can sell the state as much as 1,000 megawatts of power= =20 this summer.=20 "This was the issue we had to have solved or we could not offer any of= =20 our excess capacity to the state," Wiggs said.=20 He added, however, that the city and state have not yet agreed on a=20 price for the power. Wiggs said the city is "negotiating to get our cost as= =20 low as we can legally charge" so that customers of the city utility distric= t=20 are not subsidizing consumers in the rest of the state. Municipal utility= =20 districts elsewhere in the state also are expected to benefit from the orde= r.=20 Though the order was aimed at spurring municipal utilities to sell pow= er=20 to the state, it also applies to independent power producers such as Relian= t=20 Energy of Houston and Duke of North Carolina--both of which have called on= =20 Davis to ease air pollution restrictions on their old natural gas-fired=20 facilities.=20 "This puts more money in the Texans' pockets and more air pollution in= =20 Ventura County residents' lungs," said Baldwin of Ventura County.=20 Doug Allard, a Santa Barbara County air pollution control officer, als= o=20 said it seems as if the governor is giving private power generators much of= =20 what they had sought.=20 "We have serious concerns about the order," said Feuer of the Natural= =20 Resources Defense Council. "It's taking the discretion away from local air= =20 districts to regulate power plants in their region."=20 * * * Times staff writer Nancy Vogel contributed to this story.=20 RELATED STORY=20 Utility: Edison plans to raise $1 billion in debt restructuring. C1=20 Copyright 2001 Los Angeles Times =20 =20 =20 =20 =20
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