Cutting Through the Red Tape: Local Implications of Energy Policy

January seems to be a sign of a much cleaner future for residents of San Francisco’s Southeast.

This month, Mayor Gavin Newsom received a letter from the California Independent System Operator (CAISO, pronounced Cal-ISO) that it anticipates allowing Mirant’s power plant at Potrero to close at the end of the year. The closing of the power plant would mark the end of fossil-fuel plants in San Francisco; the other at Hunters Pointhaving closed in 2006. Closing the two plants have been environmental justice goals of the City since the 1990s. Pollution from the plants has contributed to record-high rates of asthma, cervical cancer and countless other ailments confronting a historically African American portion of the City.

The CAISO was created by federal regulatory authorities to plan and manage California’s high-voltage transmission grid, minimize black outs and keep utilities and merchant generators from exploiting the markets used for sale of energy. The ISO prevents generators and transmission line owners from manipulating market prices while ensuring electrical reliability in local areas.

For privately-owned facilities such as those at Potrero, CAISO determines whether power generation is necessary for local reliability and whether it is appropriate to implement Reliability Must-Run (RMR) contracts that legally bind the power plant owners. CAISO conducts studies annually about how contingencies in the electrical grid could affect stable delivery of electricity and designates must-run status for generating units accordingly. Mirant has even expressed that it would close the plant at Potrero once the ISO removes its must-run status.

Conceptually, I’ve found transmission to be an illusive component of electric power. As electricity goes from power plant to power outlet, transmission is a critical infrastructure in between. Generators feed power into the transmission grid across long distances—sometimes across entire states—until the power is delivered into a community’s distribution system, the series of power lineslining its streets.

Located at the top of the Peninsula, San Francisco is resource-constrained in that there is simply not enough transmission capacity to reliably import its entire electrical load. This explains why, after over 10 years of staunch oppositionto the power plants, only one has successfully shut down.

The City’s strategy to close both power plants and get a cleaner electrical portfolio relies on both renewable energy and reduced electrical demand, in addition to more transmission capacity. However, the level of renewable energy and reduction in demand alone has not matched the generating capacity provided by the plants.

This is in part because of the difficulty in integrating many renewable resources. Solar and wind, for example, are intermittent resources whose hours ofoperation are controlled by environmental factors. The ISO cannot turn on the resources at-will as it can with fossil-fuel plants, or even hydroelectric or geothermal plants. Technological innovation and adoption will hopefully address this weakness of renewable energy in the near-future.

In the end, it appears that increased transmission capacity will be largely credited with eliminating the power plants in San Francisco. New transmission lines and upgrades are what primarily led to the 2006 closing of Hunters Point and are also cited in this month’s letter to Mayor Newsom about Mirant’s plant. In particular, a public-private partnership produced a new underwater transmission cable that connects San Franciscoto the East Bay.

The San Francisco Power and Utilities Commission (where I am spending my Fellowship) has played an important role in implementing these equity-driven energy priorities of the City, and it is this leadership that hopefully will see the release of Potrero’s must-run designation at the end of this year and the closing of the plant in the following year.

Copenhagen may not have achieved what many would have liked, and even our own Congress appears to have lost the urgency of confronting energy reform. However, as this example in San Francisco shows, local governments are stepping up to the plate, thinking globally about the effect of climate change, and acting locally to help their own residents who have suffered from poor environmental stewardship for far too long.

Originally published on the City Hall Fellows blog, when I was in the fellowship program in San Francisco.