Power Plant FAQ’s

1. Don’t we need the power from the power plant?

No.  According to a 2008 report released by the California Energy Commission, Redondo’s plant produced less than 5% of its capacity – it was only used sporadically to augment other power plants.  The same report shows that the plant produced less than 1/10th of 1 % of our power in 2008.  (http://aesredondomustgo.blog.com/aes-related-reports/)

A 2010 report by the California Independent System Operator (CAISO) projects the needs and generation capacity for our area in 2015.  This projection is shown in the table above.  What this table means is that if you subtract out the Redondo power plant capacity, the generation capabilities exceed the projected needs by 26%.  Let me repeat that – there is 26% excess power generation capacity for our area in 2015 without the AES power plant in Redondo.

Since the power crisis in the early 2000′s, the state has added over  40% in new power capacity.  A 2010 report by the California Energy Commission (CEC), the California Public Utilities Commission(CPUC), the California Independent System Operator(CAISO), and the Air Resources Board reviewed power plants required for grid reliability.  Power plants in El Segundo and Huntington Beach were called out as required.  Redondo’s plant was not on the list of required power plants. This study shows that significant new sources of power have been added to the grid, making plants like AES unnecessary.  (http://aesredondomustgo.blog.com/aes-related-reports/)

Remember in 2002, AES proposed and supported rezoning their property for high density condo zoning.  That was the “heart” of the Heart of the City plan that was defeated by residents.

In August 2011 the California Energy Commission released its report on energy demand forecast through 2022 (see AES Related Reports page).  This report contradicts claims by AES that their Redondo plant is critical due to future electric vehicle charging requirements.  This report shows that the energy saved by more efficient appliances and buildings and energy added to the grid by residential solar systems will dwarf any increased demand required to charge electric vehicles.

On December 8, 2011, the California Independent Systems Operator (CAISO) presented its power needs projections through 2021 (see the AES Related Reports page).  The State Coastal Commission funded an independent power expert to determine if power from AES Redondo is required.  The independent consultant agreed with BBR conclusions:

• Power from the AES Redondo power plant is not required based on demand projections
• Power from AES Redondo is not required for “intermittant renewable energy integration”

2. Won’t we have to pay to tear down the plant?

No.  AES is obligated by federal law to remediate all contamination on their site.  AES has stated that revenue from the salvage of equipment and metal would cover the cost of tear down and remediation.

3. Isn’t it AES’s property? Is rezoning their property legal?

Yes.   We have opinions from two land use attorney’s who state this is legal and is not a “taking”.  We are not proposing taking AES’ property away.  We are proposing rezoning the power plant site based on the welfare and health impacts of the power plant on the coummunity and we would allow AES to get economic value out of their property.  This has been done by the City regularly.  The 1992 General Plan downzoned much of Redondo.  This included downzoning residential density on many properties and converting commercial zoning to residential zoning.  The City has done similar rezoning in the past.

A 2004 City Staff report (http://aesredondomustgo.blog.com/aes-related-reports/) laid out a plan to rezone the AES property for non-industrial uses, phasing out the power plant over time.  This would give AES the time to finish out their current contract, which expires in 2018.  We are only proposing implementing what the City Staff had recommended in 2004.

Our proposed zoning allows AES to finish their current power contract.  It then allows them to generate revenue from selling or leasing up to 30% of their property for commercial and institutional (university, museum, etc) development and uses.  AES would also be paid for the 70% of the property that would be set aside for public parks and open space.  AES will get their investment out of their property.

Remember, in 2002 AES supported conversion of their property to high density condo zoning.  This was during the peak of our energy crisis.  Recently Councilman Brand and BBR met with Eric Pendergraft, President of AES Southland.  Mr. Pendergraft informed us that AES is open to alternative uses for the site.

4.  Isn’t this eminent domain or a “taking”?

No.  We have assessment from two prominent land use attorneys in addition to the City’s 2004 report  detailing how to rezone the power plant.   (http://aesredondomustgo.blog.com/aes-related-reports/)

 In laymen’s terms the zoning change must be based on health and welfare of the community and it cannot eliminate economic value for the property owner.  

The City and County documented the impact of the power plant on the community in 2004.  They found the power plant was incompatible with surrounding uses, negatively impacted economic values of businesses and residential property, and had detrimental health and environmental impacts on those living in proximity to the power plant.  The City called it “the major blight influence” in the harbor area and the County deemed the area blighted.  So we have a strong case on the first required – that the rezoning must be based on the welfare of the community.

The rezoning cannot take away all economic value.   Our proposed rezoning would phase out the power plant use and allow AES to fulfill their current power contract.  Our proposed zoning would allow AES economic value in both the commercial zoning and the public land zoning.

In parallel we are lobbying the CEC and CPUC to deny AES the permission and contracts required for it to rebuild.  The CEC is required to assess whether the power plant is required at a specific site and the impacts of that power plant on the surrounding land uses.  As we have stated above, the negative impacts are well documented in official documents.  And we know from their 2010 report and discussions with the CEC that a coastal power plant in the South Bay can be retired.  We want that to be the Redondo plant.  If AES cannot get the required permits and contracts, they will want new zoning.  In a meeting with AES Southland President, Eric Pendergraft backed off an earlier statement that AES is committed to producing power at the Redondo site for the next 100 years.  He stated AES is open to other alternatives.

5. Didn’t AES say they will be generating power in Redondo for the next 100 years?

Yes, but they have backed down on that statement.  Councilman Brand and BBR recently met with Eric Pendergraft, President of AES Southland.  Mr. Pendergraft admitted that he made the statement in the heat of the Measure G campaign.  He went on to state that AES is open to alternative uses of their property.  He has authorized us to state this publicly.

More recently, in AES’ briefing to Redondo City Council, Mr. Pendergraft stated that AES will not rebuild the plant if power from the plant is not needed.  We think the latest CAISO reports show that it is not needed.  We hope Mr. Pendergraft is a man of his word.

6. What is the schedule, don’t we have lots of time?

AES is moving forward and the time to act is now.  AES’s schedule is published in the plan they submitted to the State Water Reources Control Board in June. (http://aesredondomustgo.blog.com/aes-related-reports/)  This plan show them starting the necessary coordination with state power agencies as early as December this year.  According to their June 2011 plan,  AES plans to submit their application for certification (AFC) to the California Energy Commission in December.  

AES has recently stated their submission to the CEC has slipped to 2nd quarter 2012, however, evidence on the California Public Utilities Commission website shows AES is aggressively moving forward with their plan.   AES’ submission of the their plan to the State Water Control Board in June has already started the process moving forward.  The time to act is now.  If we wait, it will be too late.

7. How long will it take to build the new power plant?

   Over nine years.  AES’s implementation plan shows construction starting in 2015 and ending in 2024.  The plan states the construction will be in two phases,  The first where they build two new generation units, and then the second where they tear down at least part of the old plant to build an additional two units.   (http://aesredondomustgo.blog.com/aes-related-reports/)

Recently AES has stated they can build in as little as 24 months.  Of course they have now separated out demolition time and have not committed to a schedule for demolition.  We are skeptical of their new claims.

8. Won’t the new plant run cleaner?

Maybe, but with higher run times it will actually produce more pollution and it would remain Redondo’s largest single generator of air pollution.  The new plant may run cleaner, but to make it economically viable, we suspect AES will have to run at much more than the 5% capacity it currently runs at.  Several recent power plant applications for new plants cite a run rate around 60%.  In their presentation to the City Council AES was all over the map citing rates that ranged from 15.8% to 30%.  Based on the other recent power plant applications and AES’ waffling on the amount, we are skeptical that it is economically viable to invest$630M for a plant that will run at between 15.8% and 30% of the time.

Regardless of run rate, remember, AES can only build this plant with  exemptions from air pollution requirements, as stated in their implementation plan:

“The key assumptions for AES SL’s ….repowering program…include the following: 

Reliance on the South Coast Air Quality Management District (SCAQMD) Rule 1304(a)(2) to comply with all necessary requirements for emission reduction credits for the repowered units….  The potential cost of emission offsets…would render the repowering program commercially infeasible.”

At their briefing to the City Council AES vehemently denied that they need an air pollution exemption, but Rule 1304 is in fact an exemption…

Although AES claims they do not need an air pollution exemption to repower, clearly Rule 1304 is just that: an exemption for air pollution.

Despite its limited run times, our current plant is number 98 of the top 100 greenhouse gas polluters in California.  Any new plant would most likely run more and move up the list.  Several newer power plants are ranked higher than our power plant – despite their more efficient and cleaner plants, they run more and produce more pollution.

A March 2011 report, “Dirty Energy’s Assault on our Health: Ozone Pollution” published by Enironment America’s Research and Policy Center, shows AES Redondo as the number 6 NOx polluter in California in 2009, despite its low 5% run capacity.

Based on recent (2010) environmental documents filed for the new power plant in El Segundo, we have projected the amount of pollutants the new AES Redondo Plant would produce.   To put the emissions in perspective, we equate the new plant emissions to automobile air pollution based on EPA reported annual average automobile emissions.

As stated previously, AES has been all over the map on the new power plant run rate.  So we have generated a table of the pollution at each of the potential run rates for comparison.

A brand new  combined cycle natural gas 630MW power plant, running at just 15.5% capacity produces over 31,000 pounds of particulate (PM10), which is the equivalent of the annual emissions of 223,281 average family cars!

If the plant runs at 60%, which is what other brand new power plants have submitted in their environmental impact reports, particulate pollution jumps to over, 118,000 pounds per year, which is equivalent to nearly 850,000 cars. 

Compared to the air pollution AES reports today, particulate pollution increases with any of these run rates. 

So what?  What does particulate matter do other than coat everything with black greasy dust?

From the EPA:

“Particle exposure can lead to a variety of health effects. For example, numerous studies link particle levels to increased hospital admissions and emergency room visits and even to death from heart or lung diseases. Both long- and short-term particle exposures have been linked to health problems.

 

 Long-term exposures, such as those experienced by people living for many years in areas with high particle levels, have been associated with problems such as reduced lung function and the development of chronic bronchitis and even premature death.”

Also according to EPA about 1 in 3 people are sensitive to particulate pollution.  At risk people include the very young, the elderly, those with asthma and other breathing/lung problems, and those that are physically active outdoors.

How’s that for “clean  and green”?

And don’t lose sight that  the details above are on just one pollutant there are others that are of equal and greater concern and some of greater volume… PM2.5, carbon monoxide, ammonia, carbon dioxide, nitrogen oxides etc.

 The  ”Dirty Energy’s Assault on our Health: Ozone Pollution” report cites a Rand study which showed that over 30,000 hospital visits between 2005 and 2007 were caused by repeated exposure to ozone.  The health care costs were estimated at over $193M.  Los Angeles -Long Beach area air was deemed “unhealthy” (28 days) or “unhealthy for sensitive groups” (43 days) nearly 20% of the year in 2008.

AES states that we are misleading the public on our air pollution statements regarding the new plant.  We have offered to correct any inaccuracies, but they have yet to define what they think is misleading. 

9. Won’t the loss of the plant affect revenue to the city?

Yes, rezoning will INCREASE revenue to the city.  According to the City Manager, AES generated $291,000 in City revenue in 2009/2010.  That is less than 3/10ths of 1 percent of total city revenues.  The pier parking lot generates over 6x the revenue that AES generates for our City.  A 2003 City study showed that residential property values near the power plant were depressed by  over 30% and commercial businesses were impacted by over 40%.  Many studies show that properties next to parks have property values increased by over 30%.  The value of business and residential property would rise increasing tax revenues to the City.  The new zoning will allow up to 30% of the property to be commercial and institutional uses – these businesses will generate revenue for the city in their sales taxes.  Additionally, the addition of pay parking on the site for the park and harbor would add money to the city – the parking lot at the pier generates over $1.8M in revenue each year.

10. What about jobs?

Rezoning will INCREASE jobs.  According to AES, they currently employ just 55 employees.  They admit a new plant will reduce the number of employees to about 30 required to run and maintain the plant.  The commercial development allowed by the new zoning would create many more jobs than the new power plant.  For comparison’s sake the average Outback Steakhouse is open for business six to eight hours per day and employs 31 to 32 people.  The City website shows Cheesecake Factory employing over 250 employees.  The 30% commercial/institutional component of our proposed zoning would increase employment opportunities in the City.

11. Won’t the City get sued if they try to rezone AES’s property?

Possibly.  But, any litigation related to zoning changes would delay the construction of a new plant.  So each day of delay created by a lawsuit would cost AES money and would impact the fiscal viability of the new project.  Further obstacles created by the ill will generated by the lawsuit would create further delays.  At some point construction of a new plant becomes unpalatable.  So a lawsuit is not necessarily a foregone conclusion.  In a meeting with AES Southland President, Eric Pendergraft backed off an earlier statement that AES is committed to producing power at the Redondo site for the next 100 years.  He stated AES is open to other alternatives.  So we hope to establish a win/win senario for the City, the Residents and AES.

Remember, we intend to also lobby the CEC and CPUC to deny AES the approvals and contracts required to rebuild the power plant.  We will get to weigh in on the economic and environmental impacts.  If we are successful, AES will have to define some other use for their property.

If the City gets sued, a judge will have to determine if the rezoning unduly harmed AES.  The rezoning has to be due to impacts to the welfare of the community and cannot unduly take value away from AES.  Our zoning would allow AES to fulfill their current power contracts.  It is based on well documented impacts cited in official city and county documents as well as pollution reports by state agencies.  And our proposed zoning allows them significant economic value in both the commercial and the public parkland zoning.  AES could sue, but we have consulted with recognized land use attorneys and we are confident the risk of losing the lawsuit would be low.

Regardless, the mere threat of a lawsuit should not allow them to build a new power plant and desalination facility that will be there for another 50 years.  Plus, there is solid case law cited by City staff in the 2004 report that supports city and State authority to rezone land.  Three other cities are successfully zoning out their power plants.  If residents band together and convince the CEC and CPUC that the impacts of a new power plant are unacceptable, AES may not get the long term power contracts it needs to rebuild. 

Three coastal power plants have been shut down due to opposition by their cities:  Portrero, Hunter’s Point and Chula Vista.  In 2011, the City of Oxnard amended its General Plan to phase out power plants.  We should not allow a multi-billion dollar company in Virginia to initimidate us into inaction on a power plant we neither want nor need.

Recently, Councilman Brand and BBR met with AES Southland President, Eric Pendergraft.  Mr. Pendergraft informed us that AES is open to alternative uses.

 12.  Won’t the City face potential bankruptcy like Hermosa potentially faces due to the McPherson lawsuit?

NO!  In the McPhereson case, the oil company had a signed contract with the City to drill for oil.  The oil is there and there was a contract signed by the city – canceling the contract took away any revenue McPherson had gained rights to through the contract.   The lawsuit is about breach of contract – not rezoning.

AES has no contract with the city.  The City is changing the zoning, it is not breaking a contract with residual economic value.  AES’ current power production contract expires in 2018 and our zoning would allow AES to produce power to the end of its contract.  Part of our activities include lobbying politicians, neighboring cities, the CEC and CPUC to deny AES future long term power contracts and any siting certification.

 Our rezoning would allow AES to get economic value out of their property after the power plant is phased out through revenues from selling the land to the public and selling or leasing the portion of the property zoned commercial/institutional.

This is different than the McPherson case in that – 1) we are not breaking any contract with economic value to AES and 2) we allow AES to get economic value from its property after the zoning change.

Recently, Councilman Brand and BBR met with AES Southland President, Eric Pendergraft.  Mr. Pendergraft informed us that AES is open to alternative uses.  If we can come to a mutual agreement with AES, we could forgo any risk of a lawsuit.  Unfortunately, our City politicians cower behind the threat of a lawsuit.

 13.  What is the vision?

A mix of parkland and commercial/institutional uses.  We are working on zoning that is a split of 70% parkland and 30% commercial/institutional uses.  

The parkland component will likely include a wetlands, jogging and hiking paths, coastal habitats, and possibly a recreational use like baseball, soccer or other more active recreational use.  The parkland would connect the Hermosa greenbelt with the harbor area and with Catalina.  The jogging and hiking paths would provide a connection to the California Coastal Trail and would support Redondo’s commitments as a “Vitality City”.  The wetlands would serve multiple purposes – first it would restore a wetland that had been on the site until it was filled in to build the power plant; second it would likely be a draw for funding – there is significant money out there for restoration and establishment of wetlands; and third it could be used to help clean storm water runoff.  The coastal habitats and wetlands would serve as a much needed habitat for Coastal wildlife and migratory birds.  And any active uses would help alleviate the shortage of these types of facilities in the city.

  

The 30% commercial/institutional uses would allow parking relief for the harbor area, extension of the commercial uses in the harbor creating a more walkable and better integrated environment for residents and visitors, and generate revenue for the city to more than pay for the maintenance of the park.  The commercial component would allow AES significant economic value for its property – whether they sold or leased it.  We envision a parking lot for people to park and walk through the harbor and pier area.  This would reduce traffic along Harbor Boulevard if done correctly.  The institutional component would allow uses like a marine science extension of a local university and a museum that shows the history of Redondo including our City’s role in surfing, SCUBA diving, aerospace innovation, and our role as the first port of Los Angeles.  The commercial uses would allow a mix of retail, restaurant, hotel and marine related businesses.  The commercial zoning will have significant requirements for public open spaces and throughways, height limits and harbor/ocean view protections.

According to a briefing by the Studio 606 team, commissioned by the State Coastal Conservancy to study parkland in the South Bay, a 70% parkland/30% commercial uses is the average mix they see in successful new parkland projects.

Here is one vision for the AES site from that study:

 14.  Why a park?

That is the highest and best use of this land.  The California State Coastal Conservancy recently completed a study of parkland in the South Bay.  The report demonstrates that Redondo Beach, and much of the South Bay is “park poor” and “critically underserved” by parkland and open space.

After analysis of the entire South Bay, the report concludes that the best candidate for adding any substantial amount of parkland to the South Bay is the AES Power Plant property.  This report demonstrates that parkland is highest and best use of this property.

15.  Didn’t we already vote for a park?

Yes and No.   In 2005, residents voted for a park at the AES site.  This was just an advisory vote and it was ignored.  Recently many voters voted FOR Measure G thinking that the zoning change required a park at the AES site.  While Measure G added parks as an allowable land use on the power plant property, it did not mandate any parkland or opens space on the site.  Worse – Measure G gave AES a blank check on industrial development with no height restriction, no development limits, no minimum set back requirements from the property boundaries and no coastal/harbor view protections.

Note the elusive wording AES officials used when they briefed City Council.  They stated the new power plant would be on a smaller footprint that would open up their property for other uses.  They tried to bait us with some of this freed up property could potentially be used for a park.  Note there is zero commitment on AES’ part….  Hey kid, want some candy?.

 16.  Won’t the park attract undesirable outsiders?

No.   The public park zoned space will not allow or be conducive to the types of activities that frustrate many residents over Veteran’s Park.  There would be no area for tents and picnic tables and there will be no barbecues.  Look at the beach front park near the main lifeguard station at Manhattan Beach.  It is not overrun with outsiders.  It is not full of litter.  That is because Manhattan Beach limited the uses.  Torrance’s small park overlooking the beach is not overrun with outsiders either.  Please review our draft zoning…we have specific wording targeted at this concern.

Because we envision running and walking paths and wetlands, we believe the area would be frequented by people working out (joggers connecting from or to the Green Belt in Hermosa, for example), bird and nature watchers (similar to those at Bolsa Chica wetlands), classes of children learning about wetlands, conservation, and coastal wildlife and habitats…. And there may be a ball field or two or some similar organized sport area.  Do not buy into the fear mongering of our opponents.

      

16.  Won’t buying the power plant cost residents big bucks?

NO!  AES has thrown out costs like $450M to buy their property.  Yet their submissions to the tax equalization board show values from $25M to $93M – how convenient.  Sounds like they are not being totally honest with someone, doesn’t it.  In comparison, the 13 miles of coastline near Hearst Castle set aside for the public by the Hearst Corporation cost less than $300M.  Think of that - 13 miles of pristine coastline worth less than 50 acres of brownfield with no real water frontage in the middle of densely built-out city ?  We don’t think so.

First off, the value of the land is totally dependent on the land’s final zoning.  So until that is settled, putting any real price on the land is not possible.  Suppose it stays zoned as it is now:  industrial and park.  If their power plant permits or long term contracts are denied, their property will be worth very little – AES will be begging  for new zoning so they can make money.  Had AES gotten the Heart of the City zoning for thousands of condos, then the property value would be very high, with the property costs born by developers.  Right now AES has no contract to produce power after 2018 and their new plant is not approved.  Under current zoning, their land has little value if they cannot get  a new power contract and get approval to rebuild a power plant.

We propose a mix of about 30% commercial/institutional zoning and about 70% park zoning.  AES could get value for the land sold or leased to developers and operators for the commercial/institional portion of the property.  As far as the park zoned property, there are a number of ways to pay AES.  We could do a bond, where residents agree to fork out so much to buy a park.  But that is not what we are proposing.  The California State Coastal Conservancy has offered to help us attract and integrate the funding from a number of available sources and methods – none of which burdens Redondo residents.  And the park would pay for its own sustainment. Most of the funding for the Hearst deal came from tax benefits of the deal to the Hearst Corporation, for example.

Don’t buy AES’ fear mongering.  Bolsa Chica Wetlands, Ballona Wetlands, Ormand Beach, and the Hearst Ranch deals all have one thing in common… the local residents did not bear the cost of the public land acquisition.  Why should ours?

17.  Won’t we get a lot of condos if we are successful in preventing a new power plant?

NO!  First, we are intending to put the zoning up to a vote of the people via an initiative.  But regardless of our initiative, any major change in zoning has to go to a vote of the people per our City Charter.  So residents will get a say in any zoning change of the power plant site and the power lines if the power line right of ways become available.