CA Waives Air Emission Restrictions for Peak Power

California Monday lifted air pollution limits on many of its peaking natural gas-fired generation plants to free them up to supply critically needed extra megawatts this summer. Gov. Gray Davis and his administration, strong environmental protection advocates, rationalized the move, noting that the alternative --- firing up more on-site diesel back-up generation units --- would be even more detrimental to air quality.

"We are doing everything possible to keep the lights on this summer," Davis said. "This order will significantly increase the number of megawatts online this summer while maintaining our commitment to the environment."

Under an emergency executive order signed Monday, an additional 1,200 MW could be produced, and the state will pay the power plant generators' fines for the extra emissions from their plants at the rate of about $7.50/pound of nitrogen oxides (NOx). The average clean baseload natural gas-fired power plants produce about a half-pound of NOx per MWh of electricity produced, but the more polluting peaking plants emit between two and five pounds/MWh.

The nation's largest municipal utility, the City of Los Angeles Dept. of Water & Power (LADWP), estimates the governor's action will allow it to sell to the state an average of 1,000 MW this summer of excess supplies it can generate from its natural gas-fired power plants in the Los Angeles Basin, which has the nation's most stringent air quality restrictions.

"Relying on natural gas peakers is our best option for getting through this summer with minimal air quality impacts," said Alan Lloyd, head of California's Air Resources Board. "In addition, the mitigation fees (paid by the state indirectly) will ensure that the environment is held harmless, consistent with Clean Air Act requirements." The California Municipal Utilities Association head, Jerry Jordan, also called the governor's air emission move "a huge improvement," adding "every bit of relief helps during this critical period."

The executive order allows natural gas-fired power plants, which are restricted in their total annual hours of operation for air quality reasons, to operate in excess of those normal restrictions. The plants will be required to pay mitigation fees for the hours run over their limits at the rates of $7.50/pound of NOx and $1.10/pound of carbon monoxide (CO) emitted, but it is expected that ultimately the extra emission costs will be paid in the form of lower wholesale power prices from generators.

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