Published Sunday, August 20, 2000, in the San Jose Mercury News

Power shortage could be affecting air quality BY JOHN WOOLFOLK Mercury News The power shortage that is pushing California to the brink of blackouts this summer may be fouling the air as well.

Old, polluting power plants and diesel backup generators intended for rare emergencies are running like never before to keep the state's power grid from crashing.

Air quality officials aren't sure how much pollution that's causing, but they're worried it's getting out of hand. They already face extending pollution limits for older plants to avoid blame for blackouts. Now they're trying to rein in backup generators that often are loosely regulated.

``There's a lot of concern in managing the situation, to figure out how to not have the lights go out but not do damage to the environment,'' said Matt Haber of the U.S. Environmental Protection Agency's Pacific Southwest office.

In the past week, the EPA and other regulatory agencies have stressed those fears to the California Independent System Operator, which runs most of the state distribution network.

``We are working with local air quality districts on all aspects of how we can best meet the needs of the system and at the same time preserve the environment,'' said Ali Amirali, senior ISO operations engineer. ``However, we can't lose sight of the fact that over the next two years we do have supply concerns in the state.''

Electricity has grown scarce because the state's 1996 deregulation move created market uncertainty that stalled power plant construction. No major power plant has been built in a decade. New plants are years away from completion.

That's left the ISO scrambling for electricity, and given air districts two big worries:

With the ISO pleading for electricity and with scarcity causing wholesale power prices to soar, energy companies are using whatever they've got. Often, that means ``peakers'': old power plant generators that no longer meet pollution standards. Kept for use during peak demand, dozens of them are now running routinely.

Many large companies are using diesel backup generators to reduce demand on the power grid under incentives from the ISO and utilities. Air quality experts concede that these sources produce a fraction of the pollution caused by cars. But because the pollution is relatively dirtier, a little goes a long way. Diesel generators are 10 times more polluting than 1960s-vintage power plants, which are 10 times dirtier than their modern successors, Haber said.

Their pollution could be enough to push smog levels over legal limits, said Steve Hill, permit compliance manager at the Bay Area Air Quality Management District. It's too early to say whether that's happened, he said.

Making matters worse, most of the generator use occurs on days that are already hot and smoggy because those are the days that trigger electricity shortages.

``They're being operated at the worst possible time,'' said Larry Greene, president of the California Air Pollution Control Officers Association.

If smog exceeds federal and state standards, it can lead to costly regulations, Hill said. Los Angeles already has been forced to impose mandatory ride-sharing and diesel fleet conversions to natural gas, he said.

The Bay Area district has exceeded air quality standards since 1997, a trend that already was expected to continue this year, Hill said. But adding pollution makes it harder to bring those levels down, he said.

This summer has seen clashes between energy and environmental concerns. Last month, Pacific Gas & Electric Corp.'s National Energy Group tried to bring a floating peaker plant to San Francisco Bay.

The 95-megawatt plant would have provided enough power for 95,000 homes. But PG&E Corp. dropped the plan after environmental groups protested that the plant, powered by jet fuel, would pollute too much.

Air districts say they'd rather negotiate deals that allow peakers to run in exchange for environmental improvements later.

They point to a deal in July between Reliant Energy and the Ventura County Air Pollution Control District. Reliant's Mandalay Generating Station, a 1950s-era peaker, had reached its 100-hour annual operating limit on the district's permit. The district agreed to extend that limit to 300 hours, said compliance manager Keith Duval. In exchange, Reliant agreed to install emission control equipment on the plant within a year, at a cost of up to $2.5 million, he said. Reliant also will pay $4,000 for each hour of operation over its original limit. The money will go toward a program that converts dirty vehicles to cleaner fuels.

The issue of standby generators is even more complicated for air districts, which have different rules governing their use.

Some don't require permits for emergency generators. The Bay Area exempts generators used fewer than 200 hours a year, with the understanding that they're for rare power outages. But that's proved difficult to monitor.

``These engines are everywhere,'' Hill said. ``We have rules, but the fact that we don't have these sources of registration means we don't have the means of enforcing them.''

Air districts believe incentive programs to reduce power use are causing generator use to soar.

The ISO this year launched a demand relief program that pays businesses to curtail use from the grid during ``Stage 2'' emergencies when electricity reserves fall below 5 percent. Historically a rare event, it's happened more than a dozen times this summer, more than three times the 1998 record.

To curb use of emergency generators, the EPA in a letter to the ISO last week proposed allowing them only when electricity reserves fall to 2 percent. That's just short of the 1.5 percent level that triggers rotating blackouts. The ISO will consider the request, Amirali said

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-- Martin Thompson (mthom1927@aol.com), August 20, 2000