As a City Hall debate on whether to build a new fuel-burning power plant in Potrero Hill has dragged on, San Francisco has spent more than $2.4 million storing and maintaining equipment for a plant that may not get built.
In January 2003, San Francisco took possession of four natural gas-fueled power plant turbines in lieu of receiving $13.3 million as a result of a state-led energy-crisis settlement.
Although The City planned to begin using the equipment as early as May 2005, it is still taking up 4 acres inside a Texas warehouse for a monthly storage and maintenance fee of $43,941 — a cost borne by San Francisco Public Utilities Commission power customers, including city departments, according to SFPUC spokesman Tony Winnicker.
Under terms of the settlement agreement, The City could hand the four turbines back to the state for $10 million to $15 million total, according to Winnicker. They’re valued at $40 million to $60 million total on the open market, he said.
The proposed new plants were designed to replace an aging and pollutingplant near Pier 70 that is owned by the Mirant Corp.
Although members of the San Francisco Public Utilities Commission gave initial approval to the plan to build the new power plant in November, a groundswell of opposition, pushing for less environmentally damaging energy options, stalled the project.
In May, after meeting with state energy officials, Mayor Gavin Newsom suggested that retrofitting the existing plant was a viable alternative to building the new plant.
Newsom’s spokesman Nathan Ballard said that the recent change of course has moved quickly in the last few months.
“After bringing all the key players to the table less than two months ago, the mayor is pleased we’re already looking seriously at several feasible and cleaner alternatives to the current plant,” Ballard said.
The Board of Supervisors is scheduled to consider a proposal today that would have Pacific Gas & Electric Co. lay new and replacement electrical wires beneath The City to boost its energy supply so there would not be a need for new power plants.
The plan is expected to cost $214 million to $239 million of ratepayer funds, according to preliminary figures provided by PG&E senior director Kevin Dasso. The $273 million in construction-related costs of the new plant would have been recouped over an 18-year-period from revenue generated, according to SFPUC officials.