Leveraging Cleaner Conventional Sources

Prior to 1999, PG&E owned more than 7,000 MW of oil- and gas-fired conventional boilers and combustion turbine generating facilities. In the late 1980s and into the 1990s, PG&E began to modify its fossil fleet in a programmatic fashion to substantially reduce NO_X air emissions, beginning first with combustion tuning, then burner replacements and flue gas recirculation modifications and then ultimately selective catalytic reduction.

In the late 1990s, in response to California’s electric energy deregulation law, PG&E sold all but two of its fossil-fueled power plants, Hunters Point Power Plant and Humboldt Bay Power Plant. PG&E also sold its renewable geothermal facilities at The Geysers. As part of an agreement with the City of San Francisco, PG&E retained its Hunters Point Power Plant and committed to retire it when the plant was no longer needed to ensure electric reliability for customers. PG&E retired this plant in 2006.

Separately and voluntarily, PG&E targeted the second remaining PG&E-owned conventional generating facility—the Humboldt Bay Power Plant—for replacement with a new cleaner, high-performance plant at the same site. PG&E did not sell the Humboldt plant because of its obligation to decommission a retired nuclear generating unit at the site.

In the wake of the California energy crisis, state policy shifted again to support the ownership of new power plants by PG&E and other investor-owned utilities. PG&E has received permission from the CPUC to own and operate new, state-of-the-art natural gas-fired plants with emissions levels that are best in class. We reached a number of important milestones last year:

1. Gateway Generating Station: We completed the first year of operations at this new 600 MW combined cycle natural gas plant, the first new power plant built by PG&E in nearly 20 years. The plant significantly outperformed the expectations for plant availability and overall operational performance compared to a typical first-year combined-cycle plant. On average, the plant yields approximately 88 percent less NO_X, 29 percent less SO₂ and 35 percent less CO₂ for every megawatt-hour of power produced, compared to older fossil-fueled plants. Gateway also uses "dry cooling" technology, which allows the plant to use 97 percent less water than older plants with "once-through" cooling water systems.
2. Colusa Generating Station: We expect this 657 MW combined cycle natural gas plant to begin operations in late 2010, pending issuance of required permits. It will implement the same combustion controls enhancements and dry cooling technology used at Gateway, potentially resulting in comparable reductions in emissions and water usage. The plant will also use a zero liquid discharge system that recycles waste water and further reduces the amount of water needed by the facility.
3. Humboldt Bay Generating Station: This 163 MW natural gas plant, which will begin operations in 2010, is expected to be 33 percent more efficient than the old fossil-fueled plant it is replacing. The facility will employ technology expected to produce 85 percent fewer ozone precursors and nearly 35 percent less CO₂ emissions than the previous facility. The new design—selected for the region because of its low emissions and flexibility—uses reciprocating engines that are air-cooled, reducing water use by eliminating the need for once-through cooling.
4. Oakley Generating Station: Last year, we asked the CPUC for permission to purchase, own and operate a proposed 586 MW natural gas plant after it becomes operational in 2014. If approved, the dry-cooled plant will implement enhanced combined cycle technologies, which will enable it to start rapidly, reducing emissions even further than today’s new facilities.

PG&E is focused on minimizing air emissions from its conventional sources of power generation. The following figures reflect emissions from PG&E-owned generation sources.

¹ PG&E’s Gateway Generating Station began operations in January 2009.

For our owned generation, PG&E’s nitrogen oxide and sulfur dioxide emissions rates are significantly lower than the national averages.

¹ There were no reportable mercury emissions from PG&E’s facilities.

In 2009, PG&E also requested CPUC approval to enter into several long-term contracts with natural gas-fueled plants owned and operated by third-parties. Consistent with our corporate environmental and environmental justice policies, PG&E strives to minimize impacts from these facilities by considering and working to address their potential environmental and community impacts as part of our comprehensive due diligence process.

PG&E requested CPUC approval to purchase power from a new third-party owned 719 MW peaker plant near Antioch that gives the operator the flexibility to minimize fuel use and therefore reduce emissions. As part of the power purchase agreement for the new facility, the project developer agreed to retire two older existing boiler units that use once-through cooling before bringing the new plant online in 2013. Doing so will reduce local air and water impacts and demonstrates our commitment to environmental justice.

PG&E also received regulatory approval to purchase power from a new third-party-owned 184 MW natural gas plant to be built in Alameda County. Planned for 2012, the plant will be capable of starting rapidly when needed, which is especially important for integrating intermittent renewables into the grid. Two other third-party contracts pending CPUC approval involved converting existing combustion turbine facilities into high-efficiency, higher-capacity combined cycle units by 2013—a 299 MW plant in Tracy and a 289 MW plant near San Jose.