November 13, 2003

MINUTES
of the
POTRERO POWER PLANT CITIZENS ADVISORY TASK FORCE

November 13, 2003

City Hall
1 Dr. Carlton B. Goodlett Place, Room 408

1. CALL TO ORDER AND ROLL CALL

The meeting was called to order by Chair Philip DeAndrade at 4:20 p.m.

2. REPORT FROM THE CITY ATTORNEY'S OFFICE

Deputy City Attorney Joe Como reported that Mirant requested a suspension of the application for Potrero 7.

3. TASK FORCE POSITION ON THE SITING OF THE COMBUSTION TURBINES (CTs)

Mr. DeAndrade declared a certain level of victory regarding the suspension of Potrero 7. The original Task Force goal was to deal with the expansion of Potrero 7. In association with members of the community, he congratulated and thanked the Task Force, City staff, community groups, for contributing to Mirant's suspension of the application.. He also lauded the PUC, Health Department, Supervisor Maxwell and the Board of Supervisors.

Mr. DeAndrade also stated that the next goal should be the closure of Potrero 3, 4, 5 and 6.

Ed Smeloff of the PUC reported that on October 22, Supv. Maxwell received a response the ISO telling her that all of the Hunters Point Power Plant can be shut down when certain things happen, including the siting of City's four electric generators and PG&E completing five projects, the most significant of the five being the underground, two-mile cable that connects the switchyards at Hunters Point and Potrero. There are some new projects, two down in the Peninsula that allows more electricity to flow into the Bay Area and reconductoring of another set of wires near the City of Palo Alto.

ISO says that if all of the projects are completed, they will release Hunters Point from its reliability must-run contracts and that plant can be shut down. PG&E has committed to doing before the end of 2005.

City has initiated negotiations with Mirant regarding an options contract for four and one-half acres at the Potrero Power Plant. Initiation of these negotiations resulted in Mirant requesting suspension of the licensing proceeding. If City receives a license from the CEC for the City-owned power plants, Mirant would be required to give up its transmission queue position and allow us to proceed without them being in the way to hook up to the grid. Is a very important concession because without that we would have certain contingent liabilities that would make the development of the City-owned plants much more difficult.

The options contract is still not finalized. When it is, PUC would like the Task Force's support.

PUC is going to initiate the licensing of all four CTs at the Mirant site.

Mr. Smeloff answered questions about the peakers, offsets, community benefit packages and the contract regarding capacity and energy payments.

Mr. DeAndrade asked if the Task Force wanted to take a vote.

Ms. Drefke suggested that the Potrero might accept one peaker plant but that other areas in the City should bear responsibility for siting the others. The Task Force discussed the number of plants that might be acceptable sited in the Potrero. Mr. Boss stated that the Task Force might agree to site all four peakers but with conditions.

Mr. DeAndrade asked for language for a Task Force motion regarding the CTs. Mr. Moss offered the following language: we endorse the City's aggressive negotiations with Mirant to obtain options for as many as four CTs at the existing Mirant site: we encourage the City to reenter into negotiations with NRG Thermal to place one of those CTs as a cogeneration unit at the Jessie site; and we need to know about mitigation; the City needs to come back with a generous package of mitigation beyond the offsets on the table, financed by revenue from the CTs, now and in the future; and the City needs to propose an aggressive air monitoring plan for the southeast San Francisco. Mr. Smeloff suggested adding language to the motion saying that the City convene a task force to work on a plan for significant and ongoing reductions in air pollution in the southeast as part of the siting of the power plant.

The Task Force agreed on ideas and authorized the chair to finalize the motion.

5. ADJOURNMENT

The meeting was adjourned at 6:00 p.m.