Sale of city-owned power plant equipment moving forward

The City is on track to sell an estimated $10 million worth of power plant equipment during the current budget cycle, according to San Francisco Public Utilities Commission General Manager Ed Harrington.

The equipment was secured from a bankrupt energy company earlier this decade in lieu of a cash payment under a settlement agreement related to an energy-crisis lawsuit.</p>

The equipment was planned to be used to build city-owned power plants in the Bayview district and at San Francisco International Airport.

That proposal fell out of favor last year with Mayor Gavin Newsom and most city lawmakers, however, because the plants would burn natural gas, which is a climate-changing and nonrenewable fossil fuel.

City officials have assumed in budget documents that the equipment will be sold this budget cycle to help fill a budget gap.

But before the equipment is sold, the SFPUC is investigating whether any of it should instead be used to generate power elsewhere in The City, such as at an NRG Energy-owned facility on Jessie Street in the South of Market neighborhood where natural gas is burned to produce steam that heats downtown buildings.

The investigation was requested by the Board of Supervisors.

The SFPUC is on target to conclude its investigation by mid-December, Harrington told SFPUC commissioners during a meeting last week.

Efforts to sell the equipment will likely begin in January unless lawmakers change their minds based on the results of the investigation, according to Harrington.

“We are selecting a broker to make the sale,” Harrington said.

The equipment consists of four combustion turbine engines which could be sold individually or as a group. They are being stored in Texas at no cost to The City.

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