MINUTES
of the
POWER PLANT TASK FORCE
Potrero Closure Subcommittee
SPECIAL MEETING
Wednesday, February 2, 2005 at 4:00 p.m.
Goat Hill Pizza Restaurant
300 Connecticut Street
San Francisco, CA
1. CALL TO ORDER, INTRODUCTIONS, ROLL CALL
The meeting was called to order by Task Force Chair, Philip DeAndrade at 12:15 p.m. He welcomed the guests, among which were representatives of the San Francisco Public Utilities Commission (SFPUC), the Independent System Operator (ISO), Pacific Gas & Electric Company, Mirant and the San Francisco Power Cooperative.
Present: John Borg Toby Levy
Absent: John Kosinski Dana Lanza
2. CLOSURE OF THE POTRERO POWER PLANT
Chair DeAndrade: appears that closure of Hunters Point Units 1, 2, 3 and 4 will occur. What remains is Potrero Unit 3. If certain transmission upgrades are completed, and the
Potrero Closure Subcommittee
Minutes
February 2, 2005
Page 2
four CTs are sited north of San Mateo, possibly one at the airport and three at Potrero, HP 1 and 4 could close and the RMR contract on Potrero 3 could be or would be removed. The community is concerned that there is no clear closure of Potrero 3 since Mirant owns it and the City and the ISO have no control of it. Questions remain: could price of power make it feasible for Mirant to continue to run Potrero even if RMR is removed; if RMR removed and it is financially unfeasible to run the plant, will Mirant close it? Retrofit of Potrero has been approved by the Air Board. All of these questions have created uncertainty in the community.
Gary DeShazo, ISO: Discussions with all of the City groups culminated in November 2004 and ISO developed an action plan to get to point where if certain things were accomplished, i.e., the transmission investment, could get to point where existing generation at Hunters Point and Potrero could be retired. Full retirement of Potrero could be accomplished if City were able to site the four CTs. Plan defined the key milestones needed for retirement of both power plants. ISO met in January and wants to be apprised of action plan.
Presently everything is on schedule: Jefferson Martin and AP1 cable between Hunters Point and Potrero is another. Transmission between Ravenswood and Ames is key to removing the RMR needs from HP. PG&E is supporting the plan. If all transmission completed, can expect RMR released from Potrero 3 at end of 2006 to be effective 1/1/07. Anticipated that the City's peaker project will be in place December, 2006, can expect release from RMR for Potrero 4, 5 and 6 in effect 1/1/08.
Ron Kino, Mirant: Mirant currently installing NCR (NOX improvement project) at Potrero 3; unit will come back on line middle of this year. Will come back with low NOX. Re loss of RMR, Mirant has decision it has to make. If can't cover it's fixed costs, Mirant will have to shut plant down.
Chip Little, Mirant: market conditions will be reflected in the way the plant is operated; big issues to be resolved-how to cover costs, number of employees if plant operated fewer months per year after CT's sited. Mirant has filed a reorganization plan under its Chapter 11 bankruptcy; probable it will emerge from bankruptcy in end of third quarter of this year..
Gary DeShazo, ISO: if transmission project completed and CTs sited, ISO will release the RMR.
Ron Kino, Mirant: once the plant shuts down, Mirant would probably give up the permit.
Potrero Closure Subcommittee
Minutes
February 2, 2005
Page 3
Steven Moss: attended a meeting where Direct Current underwater cable was mentioned as a replacement for the CTs.
Gary DeShazo: while proponents of DC cable are moving it through the process and has legitimacy, the ISO has established the action plan based on the siting of the CTs; DC cable still creates many questions.
Julie Gill, ISO: per action plan, when planning for serving a load, what is prudent thing to do? SF, critical load center located on a peninsula, is it wise to make the investment that you have no local generation should you be isolated per an earthquake? Cannot rely solely on generation; action plan maintains that best way to serve load in San Francisco is a balance of transmission and generation.
Gary DeShazo: need to adhere to the action plan; PG&E is building transmission today and is committed to completing the elements of the action plan as agreed to; City is proceeding with the CT project; ISO has accommodated City in the plan; ISO has to make decision and that is the action plan.
Karen Kubik, PUC: City hopes to have everything calendared by end of 2006 to have the 3 CTs in the City and the one at the airport running by June, 2007; the financing has to be in place and the design/build has to occur.
Jesse Blout, MOED: City looking at CT project as part of a layered strategy with Jefferson Martin, CT's, accommodating load growth; collective goal to have CTs run at minimum and eventually acts as a peaker. Underwater cable seems intriguing but we know that we have a path for the CT project with goal of shutting down Unit 3 with reliability there. Ultimately, project has to go to Board of Supervisors to underwrite the construction process. Need to have a policy decision that has to be made by Mayor/Board of Supervisors/PUC, based on best information available.
Julie Gill, ISO: once ISO removes the RMR, the plant must shut down within six months in order to get back its money; if Mirant wants to restart the plant, it would have to apply for permits.
Philip DeAndrade: the Task Force will finally make the decision at its next meeting whether or not to support the CT plan.
3. ADJOURNMENT
The meeting was adjourned at 2:00 p.m.
