Sacramento Cogeneration Authority’s Procter and Gamble Cogeneration Project (Procter and Gamble) (SMUD)

Docket No. 93-AFC-2

November 16, 1994 Commission Decision Granting Certification

Staff Counsel: Jeff Ogata

Hearing Officer: Susan Gefter

Presiding Member: Commissioner Jan Sharpless


Project Summary


After the Sacramento Municipal Utility District (SMUD) 913 megawatt (MW) Rancho Seco Nuclear Power Plant was 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, Procter and Gamble, along with SEPCO (Docket No. 92-AFC-2), Carson (Docket No. 92-SPPE-1), and Campbell Soup (Docket No. 93-AFC-3), were among the five local projects selected by SMUD for development.

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 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 Procter and Gamble Cogeneration Project was already deemed needed and demand conformance could not be an issue in the AFC itself.

AFC Filing and Project Description

The Sacramento Cogeneration Authority, a joint powers authority that included SMUD, filed the Application for Certification (AFC) for the 171 MW Procter and Gamble Cogeneration Project on October 12, 1993. The efficient, natural gas-fired combined cycle powerplant would provide process steam to the Proctor and Gamble Company manufacturing facility and electricity to SMUD. The AFC was accepted by the Commission as data adequate on November 17, 1993.

The project was located on a 10 acre disturbed industrial site adjacent to the existing Procter and Gamble plant in Sacramento, approximately five miles east of the Sacramento Executive Airport. NOx emissions would be controlled to a permit level of 5 parts per million (ppm) by selective catalytic reduction (SCR). The natural gas fuel will be supplied by the SMUD Cogeneration Natural Gas Pipeline (SMUDGAS), Docket No. 92-AFC-2P.



In CEC staff’s view, the project would disturb vernal pools (wetlands), inhabited by two species of fairy shrimp listed as federally threatened species, and potential habitat for the burrowing owl, a California Department of Fish and Game (CDFG) species of special concern, plus the Swainson’s hawk, designated by CDFG as a threatened species. (Due to the disturbed nature of the site and the lack of state listed species on site, CDFG filed no biological opinion in the proceeding.)

CEC staff calculated a loss of 20.6 acres of potential habitat, requiring 1 to 1 off-site compensation (purchase of 20.6 acres replacement habitat) in the amount of $103,000 at $5,000 an acre. Applicant offered to pay the $103,000, but disputed staff’s methodology in calculating habitat disturbance, claiming that mitigation was necessary for only 15 acres rather than 20.6 acres. The primary difference involved whether or not the site included "wetlands" under federal criteria. The Committee requested adjudication of the methodological dispute. (Pages 89-94 of the CEC Decision.)

CEC staff testified that the project site and associated facilities contained wetlands due to the existence of viable vernal pools inhabited by several species of fairy shrimp, two species that were federally listed threatened species. Applicant questioned whether fairy shrimp, found everywhere, were a proper wetlands indicator, and applicant argued that staff’s wetlands mitigation formula was excessive.

The Committee concluded that CEC staff had failed to persuasively make its case for the presence of viable vernal pools (wetlands) on the site. Staff’s mitigation formula was rejected in favor of the applicant’s, which was still virtually identical as to the result: purchase of 20 acres for off site mitigation at $5,000 per acre, a total of $100,000. (Pages 94-98, and page 100 of the CEC Decision; Biology Condition of Certification 6 at pages 104-105 of the CEC Decision.)

The Procter and Gamble AFC had no other contested issues, as all remaining matters were settled by negotiations. The following subjects are worthy of note.

Cogeneration Status

Procter and Gamble was reviewed as an AFC, exempt from the Notice of Intention (NOI) requirements, based upon its qualification as a cogeneration plant under Public Resources Code section 25540.6(a). Concern was raised about SMUD’s ability to maintain the powerplant’s cogeneration status if the Proctor and Gamble manufacturing facility closed. In such event, SMUD testified that another enterprise would likely be found to serve as a steam host. (7/20/94 RT 59, page 23 of the CEC Decision.) Under Efficiency Condition of Certification 1, at page 215 of the Decision, the Commission adopted the standard requirement for Proctor and Gamble to operate as a cogeneration plant.

Air Quality

As was the case for other SMUD projects, CEC staff and the Sacramento Metropolitan Air Quality Management District (SMAQMD) used different methodologies for calculating the air emissions offsets required by Procter and Gamble. Staff utilized a worst case daily emission basis for arriving at offset requirements, while the district based its mitigation upon quarterly emissions.

There were differences in the total offset calculations. Under staff’s approach, Procter and Gamble even had excess offsets, which were then credited to Campbell Soup (Docket No. 93-AFC-3) so that their calculations balanced. (See Pages 24-33 of the CEC Campbell Soup Decision.)

CEC staff, SMAQMD, and the applicants thus reached agreement on resolving the problems of methodology by combining credits for the two projects. Modeling also determined that cumulative air impacts from all the proposed SMUD facilities would be minimal and would not violate the state 1-hour NO2 standard. Air Quality was not adjudicated. (Pages 39-43 of the CEC Decision.)

Land Use

Procter and Gamble did not have a land use non-conformity of the type that required amendment of a general plan or zoning ordinance. However, under the City of Sacramento Zoning Ordinance, a variance was necessary to allow the proposed boiler stack height (115 feet), a reduced pavement area, and exceptions from barrier requirements.

The Commission essentially treated the variance as part of a local permit, which placed the variance under direct CEC jurisdiction. The Commission thus made the findings necessary for granting a variance in accordance with the Zoning Ordinance, as part of the AFC. City of Sacramento planning staff supported applicant’s qualification for a variance. Proctor and Gamble was therefore held to be eligible for a variance in conformity with the Zoning Ordinance. This solved the land use problem without requiring any modifications to the Zoning Ordinance itself. (Pages 186-189 of the CEC Decision.)


The Commission Decision granting the Procter and Gamble Cogeneration Project AFC was issued on November 16, 1994 (within the one-year statutory time frame), and the facility was constructed. It began generating electricity for SMUD in 1997.