Carson Ice-Gen Project, Sacramento Municipal Utility District (SMUD)

Docket No. 92-SPPE-1

Small Power Plant Exemption Granted June 23, 1993

Project Manager: Shawn Pittard

Staff Counsel: Nikki Case

Hearing Officer: Susan Gefter

Presiding Member: Commissioner Sally Rakow

Background

After the Sacramento Municipal Utility District (SMUD) had its 913 MW Rancho Seco Nuclear Power Plant closed by the voters in the June 6, 1989 election, SMUD conducted a competitive bidding and negotiation process with various powerplant developers in order to obtain replacement generation. In November 1991, Carson was one of five local projects selected by SMUD for development. The others that became siting cases were SEPCO (Docket No. 92-AFC-2), Proctor & Gamble (Docket No. 93-AFC-2), and Campbell Soup (Docket No. 93-AFC-3), all of which planned to utilize the SMUDGAS pipeline for fuel (Docket No. 92-AFC-2P).

SPPE Filing and Project Description

The Carson Energy Group and the Central Valley Financing Authority (which included SMUD) filed an application for a Small Power Plant Exemption (SPPE) on July 6, 1992 for a 95 MW (peak), 54 MW (baseload) natural-gas fired combustion turbine cogeneration plant and a 300 ton-per-day ice production facility in Southern Sacramento County. The site, just south of the Sacramento City Limits, was adjacent to an existing Sacramento Regional Wastewater Treatment Plant. SMUD would purchase the powerplant’s electricity, while its steam would be used by both the Wastewater Treatment Plant and the new ice production facility.

PG&E would provide the project’s fuel supply (pending construction of the SMUDGAS pipeline, Docket No. 92-AFC-2P). For purposes of CEC environmental review, the Carson Ice-Gen Project was analyzed as a whole, including both the cogeneration plant and the ice manufacturing facility.

The SPPE Process

SPPE eligibility is limited to plants with a capacity of 50 MW up to 100 MW. SPPEs are governed by Public Resources Code section 25541. The CEC must make two separate findings in order to grant an SPPE - that "No substantial adverse impact on the environment or energy resources will result from the construction or operation of the proposed facility" (Public Resources Code section 25541(a)), and that "Generating capacity will not be added which is substantially in excess of the forecast of electrical energy demands adopted pursuant to subdivision (e) of section 25305." (Public Resources code section 25541(b).)

If an exemption is granted, no AFC need be filed, and the applicant can obtain local permits to build the powerplant.

CEC staff’s environmental analysis for an SPPE is presented in an Initial Study, which the CEC conducts as the CEQA lead agency for the project under Public Resources Code section 25519(c). Traditionally, a facility which qualifies for issuance of a negative declaration (including a mitigated negative declaration) is considered to also satisfy the environmental and energy resource findings for granting an SPPE.

Beginning with Navy 2 (Docket No. 88-SPPE-1) and Mojave (Docket No. 88-SPPE-2), approval of each SPPE has included a Compliance Plan and numerous Conditions of Exemption. Such a monitoring program to implement the provisions of a mitigated negative declaration is required by CEQA at Public Resources Code section 21081.6, Chapter 1232, Statutes of 1988.

The Carson Initial Study and Environmental Issues; Conditions of Exemption

On April 21, 1993, CEC staff issued its Initial Study and Proposed Negative Declaration, which was then re-issued on May 21, 1993 after applicants sought to eliminate various potential adverse impacts. Staff’s May 21, 1993 Revised Initial Study and proposed Mitigated Negative Declaration found no significant impact on the environment or energy resources from the Carson Ice-Gen Project, provided certain mitigation measures were implemented. Applicants agreed to the staff’s proposed mitigation measures, some of which became Conditions of Exemption in the Carson Compliance Plan.

Air Quality

In Air Quality, CEC staff and the Sacramento Metropolitan Air Quality Management District (District) disagreed regarding the methodology for calculating air emissions and offsets. While existing District rules specified emissions mitigation on a daily basis, the District chose to calculate its offset requirements quarterly, based upon proposed District rules.

CEC staff insisted upon the stricter requirement for mitigation of emissions on a daily basis. The Air Quality Conditions of Exemption (pages C-1-3 of the CEC Decision) required the applicant to limit emissions and obtain sufficient offsets so as to mitigate its impacts on both a daily and quarterly basis. Carson agreed to obtain the necessary offsets, which were specifically identified in the Conditions of Exemption.

Biology

In Biology, CEC staff identified an impact from Carson upon the Swainson’s hawk, a California-listed threatened species. Swainson’s hawks were observed close to the project site. The Ice-Gen Plant would eliminate ten acres of potential foraging habitat for the hawk, a species suffering from widespread habitat destruction.

To mitigate this impact, applicants agreed to provide $45,000 to the Nature Conservancy for acquisition of 15 acres of hawk foraging habitat in the Consumnes River Preserve Area. Additional funds would be provided by applicants for management and maintenance of this land.

There were additional site-related mitigation measures necessary to avoid impacting the burrowing owl, identified by the California Department of Fish and Game as a species of special concern. The staff/applicant mitigation measures, as reflected in the Biology Conditions of Exemption (pages C-4-11 of the CEC Decision), were deemed sufficient by the Department of Fish and Game, which issued a "No Jeopardy Opinion" as part of its formal consultation with CEC under the California Endangered Species Act (Appendix D of the CEC Decision.)

Hazardous Materials

Pages C-10-11 of the CEC Decision contained Conditions of Exemption designed to reduce the risks of spills and explosions at the Carson site from use of hazardous materials such as anhydrous ammonia and sodium hypochlorite. The conditions required increased safety measures, including construction of spill containment structures.

With all the Conditions of Exemption, Carson thus conformed to the requirements of section 25541(a) of the Warren-Alquist Act.

Demand Conformance for Carson

ER 90 established criteria and guidelines that a municipal utility could utilize in a competitive resource selection process. In a March 12, 1992 submittal, SMUD asked the CEC to make a formal determination that SMUD’s procurement process complied with ER 90, and that the package of five chosen projects, including Carson, were therefore all in conformance with the integrated assessment of need under ER 90.

The Commission made the findings requested by SMUD on May 13, 1992, Docket No. 88-ER-8S, Order No. 92-0513-02. Therefore, the Carson Ice-Gen Project was already deemed needed, in full compliance with the CEC forecast, automatically satisfying the SPPE demand conformance requirement at Public Resources Code section 25541(b).

Adoption

The Energy Commission granted the Carson Ice-Gen Project a Small Power Plant Exemption on June 23, 1993. The Decision incorporated CEC staff’s Revised Initial Study. Carson was constructed under local permits and began operating in 1995.