Enron Mail

From:mary.schoen@enron.com
To:steven.kean@enron.com
Subject:CA Emissions/Environmental Issues
Cc:janel.guerrero@enron.com, gus.eghneim@enron.com, marc.phillips@enron.com,jeffrey.keeler@enron.com, michael.terraso@enron.com
Bcc:janel.guerrero@enron.com, gus.eghneim@enron.com, marc.phillips@enron.com,jeffrey.keeler@enron.com, michael.terraso@enron.com
Date:Tue, 27 Feb 2001 10:54:00 -0800 (PST)

Steve - We were hoping to provide a chart that plotted out the NOx emissions
from existing fossil fuel generation vs, new cleaner generation. This chart
is not quite there. However, it is a rough aggregate of the NOx generated by
all of the existing fossil fuel generation over 50 MW in CA. The data points
were gathered from the EPA's Acid Rain CEMs (continuous emissions monitoring)
database. (I am working on a chart that's message is more clear.) As you
will see, existing generation is significantly dirtier than what new,
combined cycle plants would be. In fact, of the utility units in CA
reporting under Title IV, there are a number of steam plants with NOx
emissions of 0.1 lb/MMBtu or in some cases more. This corresponds to about 1
lb NOx/MWh compared to 0.056 lb/MWh for a new gas combined cycle plant. Even
the cleaner boilers that are at 0.05 lb/MMBtu are 10 times higher than the
new plants on an output basis.

In otherwords, Dave Parquet is right that there is a lot of more polluting
generation on line, while new plants have to meet ever tighter BACT
requirements.



In the most recent version of SB 28 it looks like there are a lot of
provisions focusing on the retrofitting of existing generation. I suspect,
the regulators are well aware of the discrepancies in emissions and would
argue that the plants are going to have to clean up in the very near future.
I am digging for more information on these timelines.

Gus, Marc, and I felt like the main short term fixes/solutions would be:

1. Expanding the hours of operations for back-up generators. (As I have
previously stated, some of the local air districts have increased the
permitted run hours for emergency generators from 200 to 500 at only
"essential public services.")

2. CA requiring offsetting of emissions at only the ratios required by
Federal regulations. In many cases state requirements are more stringent.

3. The EPA allowing the concept of the pollution mitigation bank - it is
really going to be an issue of timing - once the CA government has the funds
to start acquiring offsets they will be able to provide them prior to the
operation of a new generation facility, However, there is going to be some
initial lag time where the offsets aren't in the hands of the generation
operators (which goes against the requirements of the Clean Air Act).

4. The Feds working with the state and local permitters to create alternate
sources of emission offsets. There simply aren't enough in all the air
districts. As I stated, in my previous memo the USEPA has allowed, under the
NOx SIP call, emissions allowances to be given to renewable and energy
efficiency projects. CA is going to need guidance from the USEPA in how to
create and count alternate sources of offsets in nonattainment areas.

5. The USEPA better defining the nonattainment air sheds and pollution
transportation pathways. Apparently, there is not a central model of the air
patterns in CA. Thus, the 35 local air districts all having different
requirements about inter-district offsets.

However, the real issues as Dave alluded to in his memo are going to require
modifications to the Clean Air Act. It is pretty prescriptive about what can
and can't be done, and there is not a whole lot of flexibility.

Let me know if anything in here is not clear. I'm working on refining the
data and presentation of the data.



Mary Schoen
Environmental Strategies
Enron Corp
713-345-7422