By Steven J. Moss
A few years ago Babcock & Brown, an Australian financial company, floated the idea of constructing a 57-mile electricity transmission cable from the City of Pittsburg under the Bay to San Francisco’s Dogpatch neighborhood. Unlike most transmission lines, which can convey electricity in both directions, this would be a one-way cable, pumping direct current (DC) power to San Francisco. The cable would be “gently dropped” into a three to six foot trench on the Bay floor, “without harm to the eco-system.” It would then emerge into a non-emitting, if slightly noisy, facility in Dogpatch, where the DC power would be converted into alternating current before being distributed to the City’s homes and businesses. As part of the deal Babcock & Brown arranged to transfer ownership of the project to the City of Pittsburg, which is served by a small municipal utility.
It was a clever idea. At the time, the Pacific Gas and Electric Company’s (PG&E) Hunters Point Plant was widely considered to be “dead plant walking,” but had not yet been shut-down. Likewise, under severe community pressure, City officials, including prominently Mayor Gavin Newsom, had committed to closing Mirant’s Potrero Power Plant, which in recent years has produced more polluting and greenhouse gas emissions than the Hunters Point Plant ever did. Along with the installation of 150 megawatts (MW) of City-owned power, also to be located in the Dogpatch neighborhood, the “Transbay Cable” (TBC) would supply the City with the power it needed to insure closure of both plants.
What’s more, because the transmission line would ultimately be owned by a municipal utility, it escaped California Public Utility Commission jurisdiction, thereby removing an expensive and risky regulatory process. All Babcock & Brown had to do to obtain the government’s go ahead would be to finalize an environmental impact report – that would be certified by the City of Pittsburg – receive low level scrutiny from the States Land Commission and, potentially more seriously, from the Bay Conservation and Development Commission, and make a deal with the San Francisco Port Authority for leases and rights of ways.
For their troubles, Babcock & Brown would be guaranteed full payback, plus profit, on their $300 million+ investment. PG&E ratepayers – you and I – would pay all project costs regardless of whether the transmission line was fully, partially, or used at all. A large chunk of change, no doubt, but pennies a month spread across millions of customers. Capitalistic self-interest harnessed to painlessly solve a pressing public problem.
Unfortunately, the facts got in the way of this otherwise lovely story. The California Independent System Operator (Cal-ISO), the nonprofit agency responsible for insuring that the state avoids electricity outages, endorsed the plant as a needed asset to ensure electric system reliability. But it did so by ignoring a number of considerations most of us would find pretty compelling. First, Cal-ISO, which had already committed to removing its reliability-must-run contract from the Potrero Power Plant once the City’s “peakers” were operational, found that the TBC would have little impact on the need for the Potrero Power Plant. Said different, TBC would not ensure closure of the Potrero Plant; and the Hunters Point Power Plant was shuttered last Spring.
Second, Cal-ISO found that the TBC’s benefits – principally in the form of additional reliability – would never exceed its costs. In a previous day this would be called buying a “white elephant.” In even older times it might be considered potlatch: the burning of valuable goods to please the gods, in this case, of electric reliability. Today, when outages can cause governors to be terminated, it’s called purchasing an adequate amount of insurance against (political) black-outs.
Third, Cal-ISO found that San Francisco will likely have plenty of power until at least 2012, and even then any emerging gap would be related to our reliability “cushion;” we’d have enough electricity, we’d just start eating into our reserves. Under status quo conditions the City’s demand might not exceed available supplies until 2018. Under most circumstances, this would be good news, allowing regulators to take the time to make the right decision. After all, energy technology is constantly improving; five years from now Apple might offer a solar generator bundled into its iPod. But rather than waiting and seeing, Cal-ISO abruptly decided to put its money on the TBC horse.
Fourth, Cal-ISO chose to ignore the potential ability of small-scale power sources and energy management approaches to meet San Francisco’s energy needs. Despite the constant public chatter about, and huge investment in, solar, wind, energy conservation, demand management, and, more recently, tidal and food-to-waste generation, Cal-ISO took these potential assets as seriously as a five-year looks at yesterday’s toy. Absent a serious examination, we’ll never know whether or not environmentally-attractive “distributed generation” and better energy management could cure what might ail us in the future at a lower financial and environmental cost than the TBC.
A high-cost white elephant; which would be built in complete disregard for potential alternative, lower financial and environmental cost alternatives; which we don’t need yet; but that we’d all have to pay for. Oh, and that would take up to five acres of valuable space at the Central Waterfront. That’s why I don’t like the TBC.
Ultimately, the San Francisco Board of Supervisors will have to approve any Port agreements with Babcock & Brown. Before they do the project should be subjected to higher-quality policy analysis and be given a better public hearing than it has so far. San Francisco succeeded, after years of effort, in closing the Hunters Point Plant. Let’s continue to shape a sustainable energy future by firmly closing the Potrero Power Plant, and moving forward with green power sources. Then, if we need another extension cord, they’ll always be someone around to sell it to us.
Check out the PDF of this article:
Why I Don’t Like the Transbay Cable Project
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