POTRERO POWER PLANT CITIZENS ADVISORY TASK FORCE

Resolution: Siting of Four Combustion Turbine Units

(Adopted on November 13, 2003)

WHEREAS, Mirant Corporation's ill-conceived Potrero Unit 7 Power Plant expansion proposal is now suspended; and

WHEREAS, ensuring immediate closure of all of PG&E's aging and inefficient Hunter's Point Power Plant is a priority for the citizens of Southeast San Francisco, members of the Potrero Power Plant Citizens Advisory Task Force, and San Francisco City officials; and

WHEREAS, the California Independent System Operator ("Cal ISO"), the state agency that regulates the power grid, has recently confirmed to City officials that all four combustion turbine power plants acquired by San Francisco in a settlement with the Williams Corp. (or a similar level of new power generation) must be sited within the City and County of San Francisco in order to close all of the Hunter's Point Power Plant; and

WHEREAS, Cal ISO, the Mayor, and other city officials have committed to developing a plan to close Mirant Corp.'s aging and inefficient Potrero Unit 3 Power Plant as soon as possible; and

WHEREAS, the Potrero Power Plant Citizens Advisory Task Force recognizes that the process to create a cleaner and more reliable energy future must continue, and that the City will soon provide more specific information on the siting plan and potential offsets and mitigations; now, therefore, be it

RESOLVED, that, with the following conditions, the Potrero Power Plant Citizens Advisory Task Force endorse the City's efforts to continue negotiating with Mirant Corp. for siting up to four (4) combustion turbine units at Mirant's Potrero Power Plant site.

The Task Force does not by this action endorse the siting of any combustion turbine units at Potrero. We strongly encourage the City to re-enter negotiations with NRG Thermal to site at least one of the four units at the targeted 5th Street and Jesse Street location, to be operated as a co-generation plant.

Due to the excessive burden of power plant pollution in our community, and without more specific assurances, the Task Force may ultimately reject the City's plan to site more fossil fuel generation at Potrero. Before we can consider endorsing actual siting of any of the combustion turbines at Potrero, the City must provide to the Task Force, through the SFPUC, within the next 30 days, the following plans and information:

a) A specific and immediate plan for ongoing monitoring of ambient air quality in the area surrounding the Potrero Power Plant. This plan should provide more specific air quality data than is currently available, including an indication of the most significant emission sources in the area. This data must be suitable to be used as the basis to help address cumulative air quality impacts in Southeast San Francisco.

b) A proposed plan for air quality offsets for NOX, SOX, and PM10s, and all other targeted air emissions.

c) A proposed draft mitigation package that includes ongoing funding of clean air efforts in Southeast San Francisco, tied to operation of the CTs. In order for the Task Force to fully consider the equity and justice of siting of any CTs at Potrero, additional information is needed about the relative financial value of mitigation efforts, and fiscal potential to improve the local environment, separate from the costs associated with air quality offsets. The Task Force expects mitigation to be an ongoing component to the cost of plant operations, and we encourage the City to propose an appropriately generous mitigation package. Further, the Task Force encourages the City to develop creative solutions to achieve mitigation funding. For example, the funding source could be a share of the cost of capital; a share of the revenues once the plant has been fully paid; and/or the City could explore the potential to accelerate funding of mitigation measures based on borrowing against the future revenues the units will generate when fully paid for. The Task Force requires that the City provide an estimated dollar value for mitigation so that the trade-offs can be adequately weighed.

d) The mitigation package should include a proposal for development of a Southeast San Francisco Clean Air Plan, as well as the establishment of a Clean Air Summit which would bring together citizens, health experts, elected officials, and staff representing all relevant City Departments to determine how to best work together to improve air quality in Southeast San Francisco and other heavily impacted parts of the City.