|
|
Enron Mail |
How about forward ing this article to legal / finance / accounting, with the
theme being that our Pompano site on a relative basis is a cake walk. I'd like to see Duke's financial model... -----Original Message----- From: Mann, Kay Sent: Thu 5/24/2001 1:19 PM To: Jacoby, Ben; Carnahan, Kathleen; Sole, Carlos; Engeldorf, Roseann; Gray, Barbara Cc: Subject: Wonder if its off the balance sheet? Duke Energy, Environmentalists Strike Deal over California Plant Tom Knudson May. 16, 2001 Knight Ridder Tribune Business News - KRTBN Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM) Days after state regulators gave Duke Energy the go-ahead to expand its Moss Landing Power Plant near Monterey Bay last fall, documents show four environmental groups made their own deal with the utility giant. The four signed an agreement not to "participate in any lawsuit (or) regulatory challenge" that might slow or stop the project in exchange for a financial concession: $1 million from Duke for environmental "monitoring and research." Balancing power generation and environmental protection always has been difficult. But today, as power-starved California scrambles to find and permit new energy sources, some fear the Moss Landing agreement shows that money can sway even environmentalists -- and tip the scales too far in favor of economic development. Environmentalists who signed the agreement, though, said that despite their concerns about the plant expansion, they had little chance of stopping it, especially after it was approved by the California Energy Commission and Central Coast Regional Water Quality Control Board. So they took the potentially controversial step: entering into an agreement with Duke for financial resources to pay for studies of the plant's impact on the marine environment. Other environmentalists, though, criticized that approach. Duke Energy's efforts to modernize the Moss Landing Power Plant resulted in mitigation payments to environmental and other groups, including: $7 million to the Elkhorn Slough Foundation to mitigate the plant's use of seawater. $425,000 to the Monterey Bay Sanctuary Foundation over three years to monitor heated seawater discharge in the ocean. $1 million to the Monterey Bay Sanctuary Foundation over five years to monitor water quality through a program sponsored by Save Our Shores, the Center for Marine Conservation, the Friends of the Sea Otter and the Otter Project. $100,000 to the Marine Mammal Center to relocate its triage center for injured animals onto power plant property. $3.4 million to the Moss Landing Chamber of Commerce over 20 years for infrastructure improvements in the Moss Landing community. $100,000 to design and construct a boardwalk for additional beach access in Moss Landing. $60,000 for an environmental assessment for a proposed Elkhorn Slough Circle Trail. If approved, Duke would provide an additional $250,000 endowment to maintain the trail. "It is very disheartening," said Carolyn Nielson, a retired teacher who along with some other local residents is waging a battle against what they consider an environmentally harmful power plant cooling system. "These environmental groups have the expertise, the biologists, the attorneys," said Nielson, who has taken her case to the State Water Resources Control Board. "We could have been much more successful with their help. But there wouldn't have been any financial reward in it for them." Such criticisms are off-base, according to Warner Chabot, regional director for the Center for Marine Conservation, a national environmental group that was among those to sign the deal. He said environmentalists got the best deal possible in the current energy climate. "Look at what's happening with power plant approvals in California right now," said Chabot, referring to the state's push to bring new energy sources on line. The Moss Landing project -- which is scheduled to add 1,060 megawatts in 2002, enough to serve one million homes -- is a key part of that energy expansion plan. No money will go to the four environmental groups -- the Center for Marine Conservation, along with Save Our Shores, Friends of the Sea Otter and the Otter Project. It will be routed, in five yearly installments of $200,000 each, to the Monterey Bay Sanctuary Foundation, a nonprofit organization that helps support sanctuary programs, including scientific research. Chabot helped found the sanctuary foundation and sits on its board. He said the money will be used to monitor the health of Elkhorn Slough, a biologically rich estuary that borders the plant and is linked to Monterey Bay. "Not a dime comes to the Center for Marine Conservation," he said. "Not a penny comes to me." Duke representatives said the controversy about the arrangement has been stirred by a handful of people. "It's a million dollars worth of water quality studies," said Duke spokesman Tom Williams. "Our whole effort wasn't to try to buy anybody off. It was designed to help increase people's comfort level where there wasn't a comfort level." The $1 million agreement signed in November is part of a package of more than $12 million in Duke payments to civil, government and environmental groups in connection with the plant modernization. The heftiest award -- $7 million to the Elkhorn Slough Foundation, a nonprofit environmental organization -- was negotiated by state agencies to "mitigate" environmental impacts of the plant. Formed in 1982, the slough foundation exists to promote "the wise use and conservation of Elkhorn Slough and surrounding wetlands," its Web site says. However, some environmentalists say the state-approved mitigation plan is inadequate. "If you want to say, 'Who did Duke roll with a big chunk of money?' I would say they rolled the California Energy Commission and the Regional Water Board for the price of mitigation," Chabot said. "The agencies got bought off cheap. And the environment got taken to the cleaners." Duke's Williams strongly disagreed. Environmental mitigation "must be based on science, not on buying anybody off," he said. "That is inappropriate, and we would not participate in that. "That suggestion is offensive to us. And it should be offensive to any environmentalist." Bob Haussler, head of the Energy Commission's environmental protection office, said the mitigation plan is biologically sound. "We are confident it will improve the slough ecosystem," he said. Madeline Clark, a local businesswoman and founder of Monterey Parkway -- a citizens group that scrutinizes local public works projects -- called the recipients of Duke's payments a "shopping list" of government agencies, environmental groups and civic organizations. She was particularly critical of the $1 million deal with environmental groups. "You know what bothers me?" Clark said. "Environmental groups get tons of donations. Their purpose is to protect and defend the environment. If a big corporation like Duke can come in and buy them off, I have a real problem with that." Construction began in November on Duke's project to add 1,060 megawatts of natural gas-fired electrical capacity to the Moss Landing plant, purchased from PG&E in 1998. If the expansion is finished next year, as scheduled, it would account for more than 30 percent of all new generation in California in 2002. "This is a big deal," said Williams, the Duke spokesman. "It will be the largest plant in California. If that plant is delayed a month or two, we lose the summer of 2002. And that affects not only Duke Energy, but the state of California." Opponents say it's not the power they oppose, but the plant's cooling system, which will pump about 1.2 billion gallons of seawater each day from Moss Landing Harbor. Such pumping, they say, will degrade Elkhorn Slough. They argue for an alternative cooling system, such as towers that re-circulate water. "Basically, what that plant will do is take 25 percent of the volume of the harbor and slough, run it through a pipe and dump it back into the ocean with much of the marine life cooked and dead," said Steve Shimek, executive director of the Otter Project. For Shimek and other environmentalists, scientific studies commissioned by Duke during the permitting process left key questions unanswered about the plant's impact on the environment. "There was no scientific evidence that would literally point to Duke causing harm to the environment," said Vicki Nichols, executive director of Save Our Shores. "We felt we didn't have strong standing to sue." Instead, the environmentalists began negotiating with Duke for financial payments for studies of environmental impacts of the modernization project. The process "gave me tremendous pause and great concern," Nichols said. "I knew there was going to be some perception that we were doing the wrong thing." She was right. "As far as I'm concerned, with the price-gouging going on by the energy wholesalers, they are just receiving stolen goods," said Clark, of the citizens group. Her skepticism was sharpened by the recent disclosure that Duke Energy approached Gov. Gray Davis with a secret deal offering financial concessions if the state dropped lawsuits and investigations into the power generator. Chabot, with the Center for Marine Conservation, discouraged any comparison between the two offers, calling it "grossly unfair and inaccurate." Regardless of what was intended with the payments, Nielson said they stain the process. "It is so destructive in terms of making everyone cynical," she said. Shimek took a different view. "We convinced Duke to spend $1 million toward monitoring that, frankly, five years from now could very well come back to haunt them," he said. "Did we do the right thing? I have no idea. Did we try our best? Yes, we did."
|