News from California: power plant permit includes first-ever limits on greenhouse gas emissions

We have received very exciting news from California, where the local Bay Area Air Quality Management District has issued an air pollution permit with what we believe are the first-ever mandatory limits on greenhouse gas emissions from a power plant.

This is a very significant development – all the more important because action in Congress on global warming has stalled. This could become an important precedent. It shows that the current Clean Air Act can be used to limit greenhouse gas emissions from power plants.

The permit is detailed here on the website of the local air pollution control agency:
http://www.baaqmd.gov/~/media/Files/Engineering/Public%20Notices/2010/15487/PSD%20Permit/B3161_nsr_15487_res-com_020410.ashx

The Bay Area Air Quality Management District (“Air District”) is issuing a Federal Prevention of Significant Deterioration (“PSD”) permit to the Russell City Energy Company, LLC, for construction and operation of the Russell City Energy Center. The Air District is issuing this Federal PSD Permit in accordance with the requirements of 40 C.F.R. Section 52.21 and 40 C.F.R. Part 124, and under authority to issue PSD Permits delegated by EPA Region IX.


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The main company involved, Calpine, has issued the following release which includes favorable comments from our good friends with the Natural Resources Defense Council.



CONTACTS:
NEWS RELEASE



Media Relations:
Investor Relations:

National, Industry Media Bay Area Media
Andre Walker

Norma Dunn Jason Barnett
713-830-8775

713-830-8883 415-227-9700
andrew@calpine.com

norma.dunn@calpine.com

Calpine Obtains Permit to Build Nation’s First Power Plant with Federal Limit on Greenhouse Gas Emissions


HAYWARD, Calif. – February 4, 2010 – Calpine Corporation (NYSE: CPN) today received approval to build the nation’s first power plant with a federal limit on greenhouse gas emissions – putting both the plant and the company at the forefront of the fight against global warming.

As national and world leaders continue to move toward regulation of global warming pollutants, Calpine, long a leader in generating environmentally responsible renewable and natural gas fired electric power, has worked to establish a first-of-its-kind limit on emissions of carbon dioxide (CO2) and other greenhouse gases from the company’s planned 600-megawatt Russell City Energy Center located in the City of Hayward in Alameda County, Calif. Construction of the natural gas-fired power plant is expected to begin later this year.



Today’s action by the Bay Area Air Quality Management District (BAAQMD) to grant a Prevention of Significant Deterioration (PSD) permit is the final federal regulatory approval needed for the project to move forward. This action comes the day after the U.S. Environmental Protection Agency’s senior policy advisory committee voted on guidelines for issuing permits to major sources of greenhouse gas emissions that contribute to global climate change, such as power plants and oil refineries. At the committee’s meeting in Washington, DC, the groundbreaking PSD permit for Russell City Energy Center was presented as a “case study” for how the existing Clean Air Act can be used to regulate emissions of heat-trapping pollutants.


“Since our inception in 1984, Calpine has been an environmental leader investing in power plants that use modern emissions control technology and consistently outperform conventional fossil-fueled plants in curbing emissions that contribute to global warming,” said Jack A. Fusco, president and chief executive officer of Calpine. “By utilizing these environmentally responsible technologies, at plants such as Russell City, Calpine will help meet California’s growing demand for electricity while dramatically decreasing emissions.”

The Russell City facility will be designed to operate in a way that produces 50 percent fewer greenhouse gas emissions than even the most advanced coal-fired plants and 25 percent fewer greenhouse gas emissions than the standard set by the California Public Utilities Commission.

“Once again California is demonstrating leadership on greenhouse gas related issues. We applaud the BAAQMD and Calpine for going beyond existing federal law and being the first in the nation to require an enforceable greenhouse gas limit,” said Linda Adams, California State Secretary for Environmental Protection. “This action furthers efforts at a statewide level to balance our economic needs while meeting our environmental challenges. Aggressive and early action like this is needed to fight global warming and is critical to our economic recovery.”

Using the most advanced emissions control technology available today for a natural gas-fired power plant, Russell City Energy Center will be an energy efficient supplier of electricity to the Bay Area. The facility is expected to play a critical role in helping to meet the region’s growing demand for cleaner energy as older, emissions-intensive power plants are shut down.

“Carbon emissions have clearly emerged as a critical indicator of environmental performance for power plants, and we commend Calpine for acknowledging as much by securing the first plant-specific mandatory limits on greenhouse gas emissions,” said Ralph Cavanagh, Energy Program Co-Director for the Natural Resources Defense Council (NRDC). “We look forward to the not-too-distant day when all power plants will operate under greenhouse gas performance standards.”

The California Independent System Operation (CAISO), the nonprofit public benefit organization that operates the state's electric transmission grid, has been enthusiastic and supportive of the project.

“CAISO is encouraged by plants such as the Russell City facility which help ensure the reliable and efficient delivery of power to hundreds of thousands of consumers in the Bay Area,” said Jim Detmers, CAISO’s Vice President of Operations. “In addition to the plant’s environmental benefits, Russell City Energy Center will assist with successful integration of California's ambitious renewable portfolio.”

Powered by cleaner burning natural gas, plants like the Russell City Energy Center that use advanced combined-cycle technology are significantly cleaner than older power plants currently in operation. By providing a reliable backstop for intermittent renewable generating resources, such as wind and solar, these plants will help meet Governor Schwarzenegger’s aggressive goals that, by 2020, 33 percent of California utilities’ power be generated by renewable sources and statewide greenhouse gas emissions be reduced by 15 percent from current levels.

In addition to the environmental benefits, Russell City Energy Center will produce significant economic benefits for the City of Hayward and the Bay Area, creating 650 union construction jobs, injecting millions into the local economy and generating approximately $30 million in one-time tax revenue and more than $5 million annually in property tax revenue to help fund local government services.

The facility also will use 100 percent reclaimed water from the City of Hayward’s Water Pollution Control Facility for cooling and boiler makeup. This environmentally responsible process conserves water and prevents nearly four million gallons of wastewater per day from being discharged into San Francisco Bay.

Russell City Energy Center also will donate $10 million to help build a new library for Hayward and is working with stakeholders to make improvements and support programs that enhance the enjoyment of the San Francisco Bay shoreline.


The California Energy Commission granted a license for the plant in September 2007, and the California Public Utilities Commission approved a 10-year power purchase agreement in April 2009 under which PG&E will purchase the electricity generated by the plant.



The Russell City project is jointly owned by Calpine Corporation, which holds a 65 percent equity interest and serves as development manager, and an affiliate of GE Energy Financial Services, which holds a 35 percent equity interest.


For more information about Russell City Energy Center, visit www.russellcityenergycenter.com.



Details about PSD permit can be found at www.baaqmd.gov.



Calpine’s Commitment to California

Calpine has built and operated power plants in the State of California for 25 years and prides itself in developing innovative and environmentally responsible energy solutions for the people of California. Taken as a whole, Calpine’s projects produce enough electricity to satisfy the power needs of more than six million California households.



Calpine remains committed to California by providing clean, efficient and renewable power generation. With 5,800 megawatts in operation, including the newly commissioned, state-of-the-art 600 MW Otay Mesa Energy Center in San Diego, additional development projects include the 600 MW Russell City Energy Center in Hayward discussed above, the Los Esteros Critical Energy Center upgrade project and continuing expansion at The Geysers.



About Calpine

Calpine Corporation is helping meet the needs of an economy that demands more and cleaner sources of electricity. Founded in 1984, Calpine is a major U.S. power company, currently capable of delivering nearly 25,000 megawatts of clean, cost-effective, reliable and fuel-efficient electricity to customers and communities in 16 states in the United States and Canada. Calpine owns, leases, and operates low-carbon, natural gas-fired, and renewable geothermal power plants. Using advanced technologies, Calpine generates electricity in a reliable and environmentally responsible manner for the customers and communities it serves. Please visit www.calpine.com for more information.

Murkowski: Clean Air Act should not be used to regulate emissions (!!)

From yesterday’s polluter-inspired diatribe from Alaska Senator Lisa Murkowski:


“…But I think much of the rest of America—including State officials, businesses, farmers, and taxpayer advocates—all share our belief that the Clean Air Act should not be used to regulate emissions.”

[Congressional Record, page S 86]

Uh, that’s the whole point of the Clean Air Act.

Maybe someone ought to start proofreading the work of her ghostwriters.

Polluter lobbyists caught ghost writing for Murkowski on climate

http://views.washingtonpost.com/climate-change/post-carbon/

POSTED AT 3:55 PM ET, 01/11/2010
Murkowski and her lobbyist allies
By Juliet Eilperin

Sen. Lisa Murkowski (R-Alaska) is likely to postpone offering an amendment next week that would bar the Environmental Protection Agency from regulating carbon dioxide as a pollutant under the Clean Air Act, according to sources familiar with the matter.

The delay would give Democrats a little bit of breathing space on the politically sensitive issue of whether the Obama administration can take the lead on curbing greenhouse gases if Congress fails to act this year. Murkowski first attempted to offer the measure back in September, but as part of a leadership deal between the two parties, she had postponed the move until Jan. 20.

The maneuvering comes as The Washington Post has confirmed that two Washington lobbyists, Jeffrey R. Holmstead and Roger R. Martella, Jr., helped craft the original amendment Murkowski planned to offer on the floor last fall. Both Holmstead, who heads the Environmental Strategies Group at Bracewell & Guiliani, and Martella, a partner at Sidley Austin LLP, held senior posts at EPA under the Bush administration and represent multiple clients with an interest in climate legislation pending before Congress.

In an interview, Holmstead said of the Murkowski amendment, "I certainly worked with her staff" on the exact phrasing of the measure in September.

"I was involved," he said, adding that Martella also helped advise Murkowski's aides on the matter. "The line out of the White House and the administration was that the amendment would block the car and truck rule" setting the first-ever greenhouse gas limits on emissions from vehicles, which are set to become final in March.

Holmstead represents industry interests including Southern Company, Duke Energy, Progress Energy and the Electric Reliability Coordinating Council on climate matters, according to congressional lobbying registration forms, while Martella represents the National Alliance of Forest Owners and the Alliance of Food Associations on the same subject...

Emily Figdor, who directs the federal global warming program at the advocacy group Environment America, said the fact that Murkowski continues to explore different legislative options shows the uphill battle she faces in attacking EPA's Clean Air Act authority.

"Striking at the heart of the Clean Air Act isn't a popular thing to do," said Figdor, adding that as of last month Murkowski ranked as the top congressional recipient of donations from electric utilities.

And Frank O'Donnell, president of the advocacy group Clean Air Watch, said, "It's not a total shock that ex-Bush administration officials are ghostwriting for Murkowski on climate, though she ought to come clean and admit it so we can understand that big polluters are behind her initiative."

Rep. Pomeroy: Clean Air Act could block new coal plants

From the office of Rep. Earl Pomeroy, Democrat of North Dakota:

http://www.pomeroy.house.gov/index.asp?Type=B_PR&SEC={820ACC56-0438-4323-9649-1F5FC2D3C563}&DE={D25117D9-B5E7-4097-BE18-A61C9A15C2A3}

Washington, D.C., Congressman Earl Pomeroy today announced introduction of H.R. 4396, the Save Our Energy Jobs Act, legislation which would prohibit the Environmental Protection Agency (EPA) from regulating greenhouse gases. This legislation has been introduced in response to a recent EPA announcement that it was moving forward on new rules to regulate greenhouse gas emissions under the Clean Air Act. This action, if not prevented, could dramatically increase energy rates as well as end up costing North Dakota jobs...
...current control technologies and measures are either unproven or incredibly expensive and could in effect, make new coal facilities impossible to build.
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I think old Earl just pointed out exactly why it's important for EPA authority under the Clean Air Act to remain intact!

Clean Air Watch Hails EPA Smog Proposal

(Washington, D.C., January 7, 2010) – The non-profit Clean Air Watch today hailed the Environmental Protection Agency’s new smog proposal as a “breath of fresh air.”

The EPA today proposed to set tougher national standards for ground-level ozone, commonly referred to as smog.

“Smog is the nation’s most widespread air pollutant and one of the most dangerous,” noted Frank O’Donnell, president of Clean Air Watch. “Smog can make us sick. It can send us to the hospital. It can literally kill.”

O’Donnell called today’s announcement “a breath of fresh air from the government.” He added “it could translate into fresher air for every American.”

Technically, the EPA is proposing to reconsider a decision made in 2008 while President Bush was in office. At that time, the EPA rejected the unanimous recommendations of EPA’s science advisers and set standards that were too weak to protect public health and the environment. It was disclosed that President Bush personally intervened to weaken part of the EPA standards.

By contrast, the new EPA plan would follow the recommendations of the science advisers. The agency proposed a range of possible public health standards – all of them tougher than those put forth by the Bush administration. EPA also proposed special smog protection for the environment, including plants and trees.

EPA deferred a final decision until August, and O’Donnell predicted that “big polluters will mobilize in opposition.” He noted that oil industry lobbyists have already been to the White House to protest tougher standards.

“This EPA decision will determine the quality of the air we breathe in America for the next decade, and probably beyond. If EPA follows through, it will mean significantly cleaner air and better health protection,” O’Donnell added.

Clean Air Watch will join the American Lung Association and other health advocates to press for the best possible standards.

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New Year's predictions: tougher clean air standards on the way

Happy New Year to you all.

We expect some very interesting developments in 2010, including tougher national clean air standards for some of the nation’s most widespread pollutants, including smog (ozone), sulfur dioxide and nitrogen dioxide. Some big developments are slated for this week. A little more on these, below.

Over the course of the next decade, these decisions could lead to more positive real-world impacts than some of the “compromise” climate plans being discussed in the U.S. Senate. You may want to keep this in mind amid some of the “will the Senate pass it?” type stories on climate. (Speaking of which, I predict more skepticism about so-called “carbon capture and sequestration” technology. There have already been reports in Canada warning of potential water pollution, and I believe there will be more cautionary notes sounded.)

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Smog stunner? Later this week, the US EPA is expected to announce its proposed decision to reconsider the national ozone, or smog, standards set by the Bush administration. As you may recall, the Bush team ignored the unanimous advice of EPA’s science advisers and set weaker-than-appropriate standards. For a preview of what we expect from the new team,


Clean Air Watch will be joining with the American Lung Association Wednesday, January 6, in a media briefing by telephone.

The briefing begins at 1 pm Eastern time at: 212-401-6760; Participant PIN Code: 9049136#.

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Sulfur session: Tomorrow, the US EPA holds a hearing in Atlanta on its proposal to set a new national standard to limit short-term public exposure to sulfur dioxide. Our friends from the American Lung Association will testify. We support their statements. Final EPA standards are due in early June.

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Nitrogen next: The White House Office of Management and Budget is reviewing final EPA rules that are expected to set a new national standard to limit short-term exposure to nitrogen dioxide. Clean Air Watch has joined the American Lung Association is urging tougher standards and a better system of monitors near high-exposure areas such as near major roads.

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“Renewable” fuels? OMB is also reviewing final EPA rules that would carry out the congressional mandate to ramp up the amount of “renewable” fuel used by motor vehicles. You may recall we raised concerns about a part of the EPA proposal that appeared to be an accounting trick aimed at making fuel from corn and soybeans look greener. The ag lobby, of course, has been leaning on EPA to make its plan even worse from an environmental standpoint. (No, that’s not how the corn crowd would characterize it, of course.)

With this looming, last week 11 Northeastern states announced they would adopt a low-carbon fuel standard modeled on that issued by the state of California. Needless to say, the corn lobby is suing to overturn the California standards.

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One item on the climate front I thought worth sharing is this item from the Huffington Post. I do think it will be interesting to see if the Cantwell-Collins climate alternative gets more traction. http://www.huffingtonpost.com/mike-sandler/top-10-glass-half-full-cl_b_407559.html

On the Kerry-Lieberman-Graham "Compromise"

This outline of a “compromise” was completely predictable.

http://kerry.senate.gov/congress/kglpressconf.cfm

And it is tremendously disappointing.

Once you wade through the focus-group crafted boilerplate language, it reads like a coal protection manifesto. Citing Senator Byrd and Duke CEO Jim Rogers! As they say on the countdown to Monday Night Football, “Come On, Man!”

The attack on EPA’s current Clean Air Act authority could have been written by Sarah Palin.

Don’t we deserve something better?

Something better is now on the table -- a bipartisan initiative from Senators Maria Cantwell and Susan Collins. Their plan, which would require polluters to pay for the right to pollute, and then return most of the revenue to taxpayers, is both climate friendly and consumer friendly.