Sierra Club slams California commission for making gas-fired choices

The Sierra Club on Nov. 19 slammed California Public Utilities Commission (CPUC) decisions from that day that the club says will serve to “double-down” on fossil fuel-centric energy policies.

With California now requiring that 50% of energy needs to come from renewable sources by 2030, the decisions of the commission are serving to instead put the state on a path towards a redundant and expensive energy system that continues to rely on fossil fuel sources, said the club.

It said the commission approved “cosmetic changes” to the Self-Generation Incentive Program (SGIP). In a particularly troubling move, the commission approved the program on consent, preventing any discussion on the controversial program, the club added.

The program, which provides taxpayer-funded subsidies for emerging technologies that cut carbon emissions, will continue to hand out subsidies to polluting fuel cell technology, the club charged. Over the last decade, SGIP has funneled nearly $400 million to fuel cell maker Bloom Energy to subsidize a technology that primarily relies on polluting natural gas, the club added. The changes adopted by the CPUC will continue the practice of giving fossil fuel powered fuel cells subsidies. A recent evaluation by the CPUC found that SGIP-funded projects, like the natural gas fuel cells made by Bloom, do not meaningfully reduce greenhouse gas emissions, the club said.

“The time to end SGIP’s perverse practice of providing handouts to polluting fossil-fuel dependent technologies is long overdue,” said Matt Vespa, Senior Attorney for the Sierra Club’s My Generation campaign. “With the climate crisis growing more acute with each passing day, we simply do not have the luxury of squandering limited incentive funding on counterproductive subsidization of fossil-fueled resources at the expense of the much cleaner technologies. If the Commission is unwilling to significantly lower the emission factor, they should explicitly exclude electric only natural gas fuel cells from SGIP as part of its future considerations of program modifications.”

The commission also voted on an application by Southern California Edison (SCE) for approval of over 1,800 MW of contracts for new generation to replace the now-retired San Onofre Nuclear Generating Station and once-through-cooling coastal power plants. Sierra Club focused on two aspects of the commission’s proposed decision on SCE’s application.

  • The first was commission approval of the Stanton Energy Reliability Center, a 98-MW plant that SCE did a deal with over objections from environmentalists and ratepayer advocacy groups. During the vetting process, SCE acknowledge the power plant was significantly more expensive than alternatives like energy storage. The polluting facility is also at odds with the state’s climate and energy objectives, which require more energy storage to integrate higher levels of wind and solar, the club added. “With every power plant approved, Californians’ air gets dirtier and our electric bills go up. The Commission’s stated goals of providing clean, reliable, and affordable power are at odds in every single way with their actions,” said Vespa.
  • The club said that in a much more positive aspect of the decision, the commission rejected SCE’s attempt to count 70 MW of contracts for polluting back-up generators (BUG’s) as clean energy. BUGs are powered by natural gas, and the 70 MW of BUGs that SCE had tried to get approval on would have further contributed to the region’s poor air quality, the club said. “This decision to exclude BUG’s from being counted as a source of clean energy is an encouraging win. Southern Californians can breathe easier knowing that polluting fossil-fueled back up generation will not be scattered through their communities under the auspice of clean energy. We hope that the Commission will extend this ruling to ban BUG use in all demand response programs in California,” said Vespa. 

Decision involved 1,382 MW of gas-fired capacity within three projects

A suggested decision from a PUC administative law judge for the Nov. 19 meeting said that Stanton Energy Center Reliability LLC has proposed a project with two General Electric simple cycle combustion turbines, with a total expected contract capacity of 98 MW. SCE will not control the dispatch rights under the contract and does not receive any energy or ancillary service benefits. The Stanton project will be located in Stanton, California, and interconnect to SCE’s Barre substation.

The Stanton development company argued that its project will be able provide voltage support and contribute to the California ISO’s mandatory frequency response obligation. It will also have a storage battery system, of a size not mentioned in the company’s brief.

Noted the ALJ-written resolution: “By choosing Stanton over additional Energy Storage, Sierra Club argues that SCE is prioritizing a polluting technology of limited grid value over a highly flexible resource that will be increasingly needed to cost-effectively achieve California’s GHG and clean energy objectives. … While Sierra Club raises strong arguments, we find that under the circumstances as they existed at the time SCE made its selections, this contract was a reasonable means of meeting the Commission’s procurement directive.”

The resolution also said that SCE entered into separate Gas-Fired Generation (GFG) contracts with AES Alamitos Energy LLC and AES Huntington Beach Energy LLC for two combined cycle gas turbine (CCGT) projects. Both projects are brownfield developments, with one being constructed at the existing Alamitos site and one CCGT being constructed at the existing Huntington Beach site. Each location has a current gas-fired facility with existing interconnection and transmission infrastructure.

The Sierra Club argued that the Alamitos or the Huntington Beach or, alternatively, both GFG plants, be reduced to 360 MW. The resolution noted: “Sierra Club’s argument is based on the fact that SCE’s procurement assumed future requirements at 33 percent [Renewable Portfolio Standard], and did not study the sensitivity of the resource value for GFG at higher renewable levels. Therefore, according to Sierra Club, the economic benefit of a combined cycle was overstated in the SCE [request for offers] process and the economic value of in front of the meter Energy Storage was understated. It would make more sense, states Sierra Club, given the state’s increasing interest in a higher requirement for renewables resources, to procure the minimum required GFG or 1,000 MW.

“SCE defends the results of its RFO, noting that it has procured GFG within the bounds of the Commission’s procurement authorization [in two cases] and, therefore, its GHG procurement is reasonable and proper. According to SCE, Sierra Club’s recommendation would essentially rewrite the procurement to have a 1,000 MW maximum, which is procedurally improper and untimely. SCE argues that it was entirely appropriate to study a 33 percent renewables scenario since the current requirement is 33 percent. Additionally, SCE asserts that GFGs can facilitate the integration of higher levels of renewables, so it is not clear how a higher standard would affect the analysis.”

Stanton says its project meets several needs

Said a Nov. 2 brief from Stanton Energy Center Reliability LLC (SERC) in response to the Sierra Club’s criticism: “SERC is not a conventional gas fired resource. SERC uses patent-pending, state-of-the-art technology to act as an integrated hybrid reliability services facility. It will comprise fully integrated systems including synchronous condensing and battery storage that allow it to provide GHG-free reliability and operating services, virtually instantaneous frequency response in either ramping direction, reactive power for voltage support and energy, when required for reliability in the local area or greater system.”

Stanton added: “The importance of reliability along with the uncertainties and risks identified by the Commission with energy storage at this time means that storage’s priority in the Loading Order will depend on a demonstration of its feasibility and cost effectiveness in solving reliability issues while reducing GHG emissions. As a result, the argument by Sierra Cub that the approval of the SERC contract should be rejected because it is inconsistent with the loading order finds no support in the record or the Commission’s decisions.”

The Nov. 2 brief lists this project contact: Kara Miles, W Power LLC, President and CEO, 650 Bercut Drive, Suite A, Sacramento, CA 95811, Telephone: (916) 492-9486, Facsimile: (916) 880-5318, kmiles@wpowerllc.com.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.