September 1, 1998
Mr. Bruce Kaneshiro
CPUC EIR Project Manager
c/o Environmental Science Associates
225 Bush Street, Ste. 1700
San Francisco, CA 94104-4207

Dear Mr. Kaneshiro,

The Office of Ratepayer Advocates (ORA) presents its comments and questions regarding the Draft Environmental Impact Report (DEIR) for Pacific Gas and Electric Company’s (PG&E) Application for authorization to sell certain generating plants and related assets. (Application 98-01-008). Essentially, ORA is concerned that the Hunters Point Agreement will result in significant environmental impacts at Potrero or in other parts of San Francisco that are not analyzed in the DEIR.

Chapter 2, Project Description: Initially PG&E proposed to divest Hunters Point, but has since changed its position on that.

PG&E now proposes as part of this overall divestiture to:

The above is relevant because items 1 and 2 will probably lead to an increase in the generation from Potrero resulting in increased air emissions at that power plant site. These are not analyzed in the DEIR. Item 3 is relevant because it affects the reliability of the electric system, and may create a need to increase generation (and associated emissions) at the Potrero site and/or a new transmission line corridor. All of these impacts are the direct cumulative impacts associated with PG&E’s divestiture proposal. Under CEQA Guidelines section 15378, "project" is defined as "the whole of an action which has a potential for resulting in physical change in the environment..." Clearly, PG&E’s actions re: the Hunters Point plant are part of the whole of the action and have a potential for resulting in physical change in the environment.

[End C1]

Cumulative Scenario, page 3-3: The DEIR states "In light of the July 9, 1998 agreement between PG&E and the City...the cumulative analysis assumes that the Hunters Point Power Plant...is no longer operating by 2005. In order to successfully model the Analytical Maximum capacities of the plants to be sold, the cumulative analysis assumes that new generating facilities (totaling 480 MW) have been constructed and are operating somewhere north of the Martin Substation (in San Mateo County) in order to replace the Hunters Point plant and to meet anticipated increases in electricity demand." (emphasis added)

This statement assumes away precisely the impact that the EIR is supposed to measure. If PG&E’s action to shut down Hunters Point permanently and prematurely as part of this Application triggers the need for the rapid construction of a large power plant in the northern part of the S.F. peninsula, that construction and operation is a significant impact of the agreement with CCSF, not part of the baseline.

[End C2]

1999 Baseline Scenario, section 3.6.1: This scenario is defined at pp. 3-9 to 3-11 in a confusing and unsupported manner. For example:

• Item 1 states that PG&E continues to own and operate Potrero, Pittsburg, Contra Costa and Geysers plants. It is not clear whether PG&E continues to own and operate Hunters Point since it is not mentioned.

[End C3]

• Table 3.1 is described as the projected 1999 annual capacity factors. Hunters Point is not listed on this table, yet under the baseline scenario and all the alternates it will be operating in 1999. This is an error and must be corrected.

[End C4]

• A new 480 MW plant is listed, but is shown as not operating in 1999. Isn’t Hunters Point filling in this gap in generation? If not, what generation is?

[End C5]

• Foot "d" states that sometime between 1999 and 2005, Hunters Point would be retired and replaced with a new 480 MW plant.

• When?

[End C6]

• What is the difference in forecast closure date of Hunters Point between the base case and any of the other cases?

[End C7]

• Does the DEIR make any analysis or assumptions about the difference in the closing dates of Hunters Point if the Commission approves the CCSF-PG&E agreement or if it doesn’t?

[End C8]

Future Plant Development, Section 5.2.2: The DEIR states that "In light of the [PG&E-CCSF] agreement, it appears reasonable foreseeable that, by 2005, generation and/or transmission facilities to serve the City of San Francisco will have been approved and constructed, and the Hunters Point Power Plant will no longer be operating." The DEIR argues this assumption is justified given the 4-5 year lead time for a new power plant (footnote 1, page 5-3)

• Does the DEIR make any assumption that the CCSF-PG&E agreement will affect how soon new generating capacity will be built that would allow PG&E to retire Hunters Point?
• Why wouldn’t new generation be built at the same speed even without the CCSF-PG&E agreement?

[End C9]

The DEIR identifies (at p. 5-4) the "San Francisco Energy Facility" as the only project which has been publicly proposed which would provide even part of the local generation requirements that would result from the closure of Hunters Point. The project has been proposed for many years, but has never been able to get all the necessary permits.

• Is the EIR assuming that this project will be built by 2005?

[End C10]

• If not, does the EIR assume that future development is most likely or almost certain to occur at or near the Potrero plant site?

[End C11]

• What evidence is there to believe that there are other suitable sites available for a 480 MW generating plant, other than the Potrero or AES/San Francisco Energy Facility sites?

[End C12]

• The DEIR assumes that to replace the functions of Hunters Point, a new power plant will be needed within a small geographic area which will be connected to a PG&E substation, perhaps by underground cable, and will emit air pollutants. The DEIR should describe the likely impacts to urban and suburb neighborhoods from such development.

[End C13]

• The EIR talks generally about the need to locate the plant "somewhere on the San Francisco peninsula north of the Martin Substation in San Mateo county". (p. 5-4) Would a new substation and/or transmission lines need to be built?

[End C14]

• Are there constraints on which existing PG&E substations this new power plant could connect to in order to maintain or increase system reliability?

[End C15]

• Could a new generating plant adjacent to Potrero connect to the existing substation, or would it need to connect to the Hunters Point Substation? What other existing substations could it connect to?

[End C16]

• The DEIR identifies the new power plant as a cumulative impact, but does not state how it is related to the current application. The DEIR should state how it is related to the current application. The DEIR should state that the intent of PG&E’s agreement with the City is to (1) deny the use of the Hunters Point site for such a plant and (2) accelerate the construction of such a plant.

[End C17]

• The DEIR states "Such facility improvements will likely occur only following extensive system planning studies and with coordination among generating plant owners (including the new owner of the Potrero Power Plant), the City of San Francisco, PG&E...and the ISO." (p. 5-4)
• What is the evidence supporting this statement?
• Where is there any indication in the record that there is a requirement for "coordination among generating plant owners"?
• What agency or firm has committed to performing these "system planning studies"?
• Will the results of such studies be public?
• Who will be bound by the findings of such studies?
• Regarding new generating plants, is it correct that the ISO lacks the authority to order an energy generating firm to construct new plants?

[End C18]

• Where in the DEIR is their any identification and description of any incremental effect(s) on the environment caused by the CCSF-PG&E agreement?

[End C19]

Referring to Table 5.2 on p. 5-18 footnote "c", the DEIR states that this scenario assumes that PG&E will operate its Hunters Point plant at minimum capacity per the agreement with CCSF. Yet Hunters Point is not shown at all on Table 5.2. This is an error. Projected capacity factors for Hunters Point should be included in Table 5.2.

[End C20]

Chapter 6, Alternatives Evaluated: The alternative proposed by PG&E in its Amendment regarding immediate change in the operation of the Hunters Point plant, and its early retirement must be considered if it is likely to change the environmental impacts relative to the no project alternative. The DEIR should add and analyze the proposed changed operations at Hunters Point as Alternative #4.

[End C21]

Sincerely yours,
/s/
Truman L. Burns
ORA Project Coordinator
415/703-2932