Saturday, July 21, 2001

Generator may cut back Pittsburgh plant's output BY STEVE JOHNSON Mercury News Two weeks after Gov. Gray Davis switched on Calpine's new 555-megawatt Pittsburg power plant, Mirant says it may permanently take off-line a greater amount of power because it can't meet new air pollution limits.

If Mirant pulls the plug on 600 megawatts at its massive Pittsburg plant, it would effectively nullify the Calpine generator, one of three major plants that have come on-line in recent weeks. Davis has touted the plants as his administration's response to the state's energy crisis.

Mirant, which wants to be excused from the tougher pollution limits, said it had told the state of its plans as early as April. But some state officials, who have been scrambling for months to speed up power plant construction to help keep the lights on in California, were stunned.

``That's pretty big news if they're going to shut it down indefinitely,'' said Stephanie McCorkle, a spokeswoman with the California Independent System Operator, which monitors the flow of power throughout most of the state. ``I haven't heard this. Obviously, we wouldn't want to see any megawatts go away.''

The revelation also surprised Davis' spokesman Steve Maviglio, who noted that even with the improving power situation in California, it would be a disappointment to see such a large amount of power taken off-line.

``It's significant, no doubt about it,'' Maviglio said. ``We're going after every megawatt we can get. As a broad policy, as much power as we can keep on-line is beneficial until we can get new plants up and running.''

If Mirant carries through with the threat, only part of its 1954-era, 2,022-megawatt Pittsburg plant would be affected. Of its seven generating units, three should have no problem meeting the new pollution limits, company officials said. But they don't want to spend the $80 million or more that it would cost to install equipment on the other four to reduce the emission of nitrogen oxides, which contributes to smog.

Firm under orders

The company, which generates power at two other Bay Area locations, has been ordered to cut by nearly half the average hourly nitrogen oxide emissions at all three locations on Jan. 1. Even greater reductions are required by 2005.

Given the relatively high operating costs involved in running the older Pittsburg units -- coupled with the expense of installing the new pollution controls -- Mirant officials said it may be more economical to shut down the four units.

While stressing that Mirant wants to do everything it can to help the state get through its energy crisis, officials said they can't keep the units operating without an air quality exemption.

``We're very serious about shutting them down'' unless the company gets permission to exceed the emission limits, said Mark Gouveia, vice president and chief operating officer of Mirant's California division. ``We're not going to violate the law to run them.''

Mirant received an exemption in April from the Bay Area Air Quality Management District that lets its six small generators in San Francisco's Potrero Hill district operate for longer periods than the district previously had permitted. That was granted under a Davis executive order that relaxed some pollution limits to help avert blackouts.

Under that deal, Mirant agreed to pay $20,000 per ton of excess nitrogen-oxide emissions. But local residents and city officials have filed a lawsuit in U.S. District Court to force the company to install new pollution control equipment on the Potrero Hill plants.

Guarantee sought

As a result of that case, Mirant officials say they not only want an exemption for the Pittsburg units, but also a guarantee that they won't be sued if they keep those four units running next year.

Teresa Lee, a spokeswoman with the Bay Area air quality district, said handing out exemptions for power plants is not something the district takes lightly. Still, considering how much power Mirant is thinking of taking out of service, some accommodation for the company might be in order.

``They are really the backbone of the electricity generating capacity in the Bay Area,'' she said of the Pittsburg units. ``The governor is very motivated to keep the electricity flowing.''

But Gail Feuer, a senior attorney with the Natural Resources Defense Council, is troubled by Mirant's threat to shut down the units unless it gets an exemption. She argued that agreeing to the company's demand could trigger similar threats from other plant operators.

``They've been on notice for the past decade that they need to install controls on their power plant and they've taken the cheap route,'' by trying to avoid having to do so, she said. ``It's hard to tell if they are bluffing or if they will really shut down the plant. It sounds like blackmail to me.''

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-- Martin Thompson (mthom1927@aol.com), July 21, 2001