Snag in plan: Power plants may not be available

Peak-time generators key to Davis' proposal BY JOHN WOOLFOLK Mercury News

A problem emerged Friday with Gov. Gray Davis' plan for rescuing California from blackouts this summer: The small ``peaker'' plants key to the proposal may be unavailable.

With power shortages hitting other states, demand for the temporary power plants has boomed, and one key supplier says delivery could take 18 months.

A day after Davis unveiled a host of initiatives to streamline power plant approval and boost the state's strained supply, critics worried the effort would sacrifice the environment for electricity. Others questioned whether the effort would eliminate rolling blackouts this summer.

Many in the energy industry called Davis' plan to get 1,000 megawatts of new power from ``peakers'' by July highly optimistic.

``I'm being generous when I say it's unlikely,'' said Gary Ackerman, executive director of the Western Power Trading Forum, which represents several major electricity businesses. ``I wouldn't want the public to get their hopes up too high.''

A California Energy Commission official heading the effort agreed it will be difficult but said the state has had encouraging offers.

``I will admit the goal the governor laid out is a challenging goal,'' said Bob Therkelsen, a deputy director at the Energy Commission. ``I can't tell you right now that we know there's enough for 1,000 megawatts by July. But in the short time we've been looking at this there appears to be a much greater number of turbines out there than some folks expected.''

Peakers -- so called because they're used to boost electric supplies during peak demand instead of running continuously -- are portable generators about the size of a big-rig truck that produce up to 100 megawatts of power.

Davis announced his proposal Thursday among several emergency measures aimed at closing an expected 5,000 megawatt shortfall this summer. He plans to add 5,000 megawatts to the system each of the next four years -- enough for about 5 million homes and about 10 percent of the state's supply.

Most of the 5,000 megawatts the governor expects this summer have long been in the works. Included are three major power plants totaling 1,200 megawatts and about 1,100 megawatts from peakers that were sought by the electric grid operator last fall.

But the 1,000 megawatts from new peakers are ``a necessary component,'' said William L. Rukeyser, spokesman for the state's Environmental Protection Agency.

Scrambling to fill orders

A sales representative for General Electric, a principal manufacturer of peaker plants, said getting that many megawatts on short order would be difficult. The company has been scrambling to fill orders because power shortages in the Northeast and industrial growth nationally has caused a run on them.

``I think it would be tough,'' said Mark Nichols, a GE regional sales manager in Houston. ``The demand has been so strong we're really getting strung out on delivery.''

The California Independent System Operator, which runs most of the state's electric grid, had difficulty securing peakers when it put out bids last fall. The agency got only half the 2,200 megawatts from peakers that it sought in October for operation by June.

GE has several models ranging from about 11 to 50 megawatts and costing anywhere from $2 million to $14 million. But the larger models could take up to 18 months to deliver because of high demand, Nichols said. Smaller models could be available by the end of summer.

``We probably have in the smaller machines 300 megawatts we could sell for delivery by the end of the year,'' Nichols said. ``On the big engines I doubt seriously if we have any until probably some time a year and a half out.''

But the commission's Therkelsen said many of the peakers the state is looking at have already been purchased by various small energy companies and industrial users now offering to sell them. The companies, not the state, would pay for the machines.

Davis is sweetening the pot for companies by offering a 21-day approval process and an award of about $1 million to companies that can meet the July 1 deadline. Projects with any local opposition, however, would not be approved in three weeks, said Energy Commission spokesman Claudia Chandler.

The ``performance awards'' for builders of power plants available by July 1 would be borrowed from the budget of the state parks department, said Davis spokesman Roger Salazar. He could not confirm reports that $30 million of the department's budget was being made available.

Environmental concerns

Air emissions from the peakers could further limit the state's choices. While Davis' orders this week called for streamlining the approval bureaucracy, administration officials said no environmental rules have been relaxed to accommodate power plants.

But the peaker plants could operate by borrowing pollution credits from other companies. That concerns some critics, even though administration officials say the air will get cleaner as modern power plants come online.

``It's hard I think to tell some mother whose kid has to be rushed to the hospital with an asthma attack, `Trust us, it'll be better next year,' '' said Jerry Meral, executive director of the Planning and Conservation League.

Finding suitable locations for the plants is considered the smallest hurdle. The Energy Commission expects to present a list of about 20 sites to the governor by Feb. 21, including military bases, industrial sites, transmission stations and existing power plants, Therkelsen said.

``We have a fair number of sites that can meet our expectations without compromising the environment or public health and safety,'' Therkelsen said.

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-- Martin Thompson (mthom1927@aol.com), February 10, 2001