Blackout blackmail returns: PUC revives dirty power plants
More than a year ago, beachgoers and surfers in the areas around four aged California natural-gas-burning power plants were promised they would be closed by this time. But they’re all still operating.
The four power plants — three owned by Virginia-based AES Corp. and one by GenOn Energy, a spin-off from Texas-based NRG Energy — suck billions of gallons of water from the Pacific to cool their turbines, eventually returning hot water to the sea, where it negatively affects marine life that thrives in cool areas.
The four can produce as much as 5,400 megawatts of power, a small share of the state’s 132,000-plus MW daily capacity, about one-quarter of which now comes from reliable renewables like wind, solar, hydroelectric and geothermal. By comparison, about 7 percent of California’s power now comes from the state’s lone remaining nuclear plant, Diablo Canyon on the Central Coast. These figures do not include power produced by rooftop solar installations.
One megawatt typically is enough power to fuel a typical home for just over 1.25 years.
The four obsolescent power plants that were to close got a reprieve this fall because of a new form of the “blackout blackmail,” which has previously seen the Southern California Gas Co. — backed by the state Public Utilities Commission — warn that summertime supply shortages and blackouts were inevitable if it could not continue pumping natural gas into notoriously leaky storage fields. Those blackouts never came close to reality.
This time, the PUC and power companies predict rolling blackouts could occur as early as summer 2021 if the four plants in Huntington Beach, Long Beach, Redondo Beach and Oxnard are shuttered by next summer. Their reasoning is that juice from the plants will be needed on hot summer days when demand soars and remains high after sundown, when large solar farms stop generating electricity.
The problem: Power from those plants is probably not needed, and even if they don’t operate but are only held in reserve, their owners get anywhere from $40 to $60 per kilowatt year from consumers, billed via an obscure line on most electricity invoices. These are called “resource adequacy” payments, and AES, for one, would pocket at least $150 million in each year its obsolete water-heating plants are kept open, even if they are never used. GenOn would get more than $30 million yearly.
One problem: The four plants together produce far more than the 2,500 MW that the PUC staff has said might be needed in a pinch.
“It’s a boondoggle,” says Bill Powers, a San Diego engineer who advises consumer groups and was instrumental early in this century in keeping California from becoming permanently dependent on hyper-expensive imported liquefied natural gas. The LNG turned out to be completely unneeded, with the USA now a major exporter, rather than an importer of sub-freezing liquefied gas.
In fact, the California Independent System Operator, a Folsom-based agency that supervises the state’s electric grid and manages supplies, opposes keeping the plants open. In testimony before the PUC, that agency said that if a supply problem exists — and CalISO doesn’t concede there is such a problem — it would be due to poorly constructed market rules for imported power. And San Diego Gas & Electric Co., in a rare case of a utility opposing keeping plants open, testified that it “does not believe increasing the levels of imports (which could substitute for the plants’ power if a shortage did occur) poses any reliability problems.”
Power said market manipulation by electric generators may also be at work, as it was during the energy crunch of almost 20 years ago. “Market manipulation resulting from ineffective market rules cannot be solved by excess procurement of capacity,” he said. The underlying rules must be fixed, instead, he said.
The bottom line: This is yet another case of the PUC favoring big utility companies — this time AES and GenOn — over consumers, further evidence that despite changes in personnel and rhetoric, the commission continues to use obscure processes and cases to fatten utility profits.