San Diego Energy Recovery Project (SANDER)

Docket No. 85-AFC-4

Terminated December 2, 1987

Project Manager: Lorraine Van Kekerix

Staff Counsel: Gabriel Vivas, David Mundstock

Hearing Officer: Garret Shean

Presiding Member: Commissioner Doug Noteware


Project Summary

AFC Filing and Data Adequacy

Signal Environmental Systems, Inc., (also referred to as applicant, Signal or SANDER) filed the 60 MW San Diego Energy Recovery Project (SANDER) AFC on September 3, 1985. This was one of three municipal solid waste (MSW) plants reviewed by the Energy Commission in the mid 1980s. The others were the Irwindale Resource Recovery Facility, Docket No. 84-AFC-5) and the Bay Area Resource Recovery Facility (BARRF, Docket No. 85-AFC-6. All of these garbage burners failed to receive certification from the Commission.

CEC Staff originally identified a number of SANDER data deficiencies which were corrected by a quick series of supplemental filings. Executive Director Randall Ward finally recommended that the AFC be found data adequate in a letter to the Commissioners dated December 20, 1985, and his recommendation was accepted. The Commission staff began issuing an extensive series of data requests to the applicant.

Project Description and Background

The SANDER project was to be constructed in the Kearny Mesa area north of downtown San Diego, on vacant land next to the West Miramar Landfill, close to the Miramar Naval Air Station. The U.S. Navy owned the project site and was in the process of transferring it to the City of San Diego.

The waste-to-energy power plant was intended to process about 657,000 tons per year of municipal solid waste (MSW), generating 60 MW for sale to San Diego Gas and Electric Company. SANDER was a mass burn facility that uses raw garbage as a fuel without processing. Except for the prior removal of unsuitable large items, such as water heaters, and refrigerators, the vast majority of the solid waste is incinerated as received.

One of SANDERís primary objectives was to divert MSW from the Miramar Landfill. All of SANDERís MSW fuel was to come from the City of San Diego, which had spent many years searching for methods to extend the life of its landfills. SANDER was both the name and the product of a joint powers agreement between the City and the County of San Diego. The SANDER Board of Directors had selected the proposed site and Signal as the developer. The San Diego City Manager strongly sponsored and supported the SANDER project as the necessary culmination of an exhaustive staff effort. Although the San Diego City Council had allowed its staff to develop and advocate SANDER, the City Council as yet had neither approved the project nor committed the cityís MSW as SANDERís fuel supply.

Garbage Burner Issues, Intervenors, and Project Opponents

Garbage burning power plants inherently generate opposition in a manner similar to nuclear power plants. Residential communities feel threatened by the potentially dangerous pollutants coming out of a garbage burnerís stack. Unlike a conventional, uniform fuel such as natural gas, everything is thrown into the garbage, including countless hazardous materials which can then be burnt, giving off toxic emissions. Public Health and Air Quality are thus certain to be contested issues in a garbage burner case.

SANDER was opposed by local residential groups and citizens who organized themselves to intervene in the AFC proceeding and fight the garbage burner. The opponents were seriously concerned about the plantís danger to themselves and their families. Environmental groups also oppose garbage burners as a matter of general policy and joined the fight against SANDER. Local recycling groups are another opposition community. They see garbage burners as the antithesis of expanded recycling efforts. The anti-SANDER coalition was large, diverse, and very motivated. They would take their case to the Energy Commission, the San Diego City Council, and ultimately directly to the San Diego electorate.

Fuel Supply

CEC staff asked Signal for copies of any contracts it had with the City of San Diego to supply fuel for the project in data request #136, issued March 5, 1986. Thus, the fuel supply investigation was already under way in SANDER before the Commissionís Irwindale rulings on July 8 and September 17, 1986 established the following binding policy:

In conclusion, the Committee finds that the waste fuel guarantee findings, to satisfy Government code section 66796.40 specifically and Public Resources code section 25520(f) generally, requires Pacificís production of waste fuel contracts or other commitments during the discovery phase of the AFC, to allow analysis and, if appropriate, adjudication of the issue of the adequacy of the waste fuel sources. In unequivocal terms, the proposed project is not certifiable without the waste fuel guarantee showing in the AFC proceeding.

Staff thus continued to press Signal for a fuel supply contract. The San Diego City Manager responded in a November 7, 1986 letter in which he claimed authority to make the necessary commitment of San Diegoís refuse, 4,000 tons a day, of which the city transported 1,300 tons per day to the Miramar Landfill:

As City Manager, I can represent and guarantee, on behalf of the City of San Diego, that this waste stream is available and will be committed to the SANDER Project to the maximum amount required to ensure reliability of a fuel source.

However, the City Manager conceded in this same letter that "The City of San Diego is not in a position to produce a finalized service agreement at this time. Negotiations are continuing between the City and Signal . . . ."

SANDER therefore had no fuel contract. However, Signal, the City Manager, and the City Attorney all asserted that the City Manager had unilateral authority to commit the cityís garbage to SANDER without a City Council vote. Such legal authority did not appear to exist in the judgment of CEC Staff Counsel. The San Diego City Charter and the San Diego Municipal Code clearly placed authority over refuse in the hands of the City Council, not the City Manager. (See Background Documents Relating to the Subject of Fuel Supply, May 28, 1987.)

It also became apparent that the San Diego City Council had never been asked by the City Manager to commit itself to Signal or to the SANDER project, except in concept. SANDER was too controversial for the Councilmembers to vote on, until they had been satisfied regarding potential health risks from the garbage burner.

Deputy City Manager Coleman Conradís January 29, 1987 letter to CEC staff was conclusive on the City Councilís perspective:

In the case of the SANDER Project and the CEC permitting process, the environmental impacts of the project will not be fully known and available for the Councilís consideration until the CEC has completed its permitting process. In view of the above, the City Manager has represented to the Council that they will not be asked to make decisions on the Project until it is certified by the CEC and all environmental documentation is available. At that time the Council will be asked to consider and decide upon the lease of the site and the service agreement. It is for these reasons that the City Manager is unwilling to recommend to the Council that they enter into a conditional waste supply agreement at this time.

A February 17, 1987 San Diego City Attorney Legal Opinion, presented to the City Council in support of a SANDER land use change, also emphasized the Councilís lack of commitment to the project:

[Approving the rezoning] does not commit the City Council to any other discretionary approvals, and the City Council would retain the full and unfettered discretion to approve or disapprove a Service Agreement with Signal Environmental Systems.

CEC staff now understood that the while the City Manager told the Energy Commission SANDER had a committed fuel supply, he told the San Diego City Council that they retained total control over when and whether to approve the cityís participation in the SANDER project.

At a May 21, 1987 Committee Hearing and Site Visit, CEC Staff Counsels attempted to explain this complicated situation to the Committee: namely that SANDER had no fuel contract or commitment; that the City Manager had no legal authority to make such a commitment; and that the City Managerís fuel supply representations to the CEC contradicted his assurances to the San Diego City Council.

The legal dispute over whether SANDER actually had a fuel supply was never resolved by the Energy Commission. The Committee took no action on the arguments presented at the May 21, 1987 Hearing. The fuel supply question was soon eclipsed by the land use issue and then by the anti-SANDER citizens initiative campaign.

The Land Use Non-Conformities

Portions of the project site lacked the proper industrial zoning required for a powerplant. There were also inconsistencies with the local community plan. These land use non-conformities had been recognized by the City of San Diego, Signal, and CEC staff since 1986. Under Public Resources Code section 25525, the Energy Commission cannot approve an AFC if the facility fails to comply with any applicable law, such as the local zoning ordinance. Therefore, the City of San Diego had to re-zone the site in order to cure the non-conformity and allow the SANDER AFC to go forward.

Local agencies often believe they cannot cure such non-conformities without an Environmental Impact Report (EIR) under the California Environmental Quality Act (CEQA). This approach would tie their hands and prevent any action because the Energy Commission is performing the entire environmental review for the project as the CEQA lead agency under Public Resources Code section 25519(c). It can become a "chicken and the egg" problem, with the Energy Commission and the local agency each insisting that the other take action first.

The problem is sometimes solved by reliance upon Public Resources Code section 21080(b)(6), which exempts preliminary powerplant activities from the EIR requirement when the Energy Commission has ultimate CEQA responsibility. Re-zoning is just such a preliminary activity.

Thus, San Diego could legally go first and approve a re-zone for the project site without an EIR. This fact was recognized by the San Diego City Attorneyís Office in a February 13, 1987 legal opinion presented to the City Council. The San Diego City Manager thus requested the San Diego City Council to cure the non-conformities and adopt a set of zoning amendments, including modifications to the local community plan and the general plan.

The San Diego City Council took up the zoning amendments at its June 2, 1987 meeting. Signal and the City Manager insisted that the amendments had to be adopted in order to continue the AFC process. The City Manager stressed that approving the re-zone would not bind the Council to ultimate approval of SANDER, but that failure to re-zone would kill the project. SANDERís opponents spoke in vehement opposition to the re-zoning and called upon the Council to abandon all work on behalf of the garbage burner.

CEC Staff Counsel Vivas complicated the situation by addressing the City Council and giving the impression that adoption of the re-zone might not be necessary at this time. Relying upon a weak precedent in Solar 100, Docket No. 81-AFC-4, Vivas raised the theoretical option of the CEC possibly certifying SANDER with the re-zone as a subsequent requirement. Staff Counsel thus undercut the primary argument by the City Manager that the re-zone was a CEC imperative in order to cure the non-conformity and allow for SANDERís certification. Uncertain regarding their position on SANDER and confused as to the necessity for action, the San Diego City Council declined to adopt the re-zone, instead continuing the matter.

In a June 8, 1987 letter, Signal complained to the CEC regarding the statements of Staff Counsel Vivas, which Signal claimed improperly influenced the City Council to take no action, and contradicted CEC policy requiring the zoning non-conformity to be cured prior to certification. The CECís June 19, 1987 official response to Signal, drafted by the Chief Counsel and signed by the Executive Director, defended Staff Counsel Vivas, but rejected the option of certifying SANDER prior to correction of the zoning non-conformity. This effectively overruled Solar 100, firmly establishing the current Energy Commission policy under Public Resources Code sections 25523(d) and 25525 that land use non-conformity must be addressed before certification, either through corrective action by the local government or a CEC override. There have been no subsequent deviations from this policy.

The San Diego City Council never approved the re-zone, coming no closer than a 4-4 deadlock. The City Council simply did not have a majority in favor of SANDER. On June 30, 1987, the Council instead voted 7-0 to ask Signal to investigate the possibility of removing products that can be recycled before incinerating them. The subject of re-zoning was postponed until after the November election. This was the Councilís concession to the recycling community and to the new political environment created by the anti-SANDER ballot measure.

Let the Voters Decide

SANDERís opponents made a strategic decision to put their faith in the voters rather than the CEC or the San Diego City Council. Starting in November 1986, they collected signatures for an initiative ordinance to prohibit mass burn facilities such as SANDER. At the end of June 1987, San Diegans for Clean Air turned in 80,000 signatures for their petition.

The next dispute came over the question of whether sufficient valid signatures had been submitted to place the anti-SANDER initiative on the November 3, 1987 ballot. The City Clerk first invalidated over 30,000 signatures and declared that the measure had failed to qualify. The SANDER opponents challenged the legality of the City Clerkís calculations, resulting in a new decision by the City Attorney and City Council on July 28, 1987 that (a) reduced by 4,000 the number of signatures needed to qualify and (b) confirmed that the initiative had sufficient signatures for placement on the November 3, 1987 ballot. San Diegoís voters would now decide the fate of SANDER, with the City Council taking no position for or against the initiative.

This was all too much for Signal Environmental Systems, the SANDER applicant. Signal felt abandoned by the City of San Diego, which had first refused to approve the re-zone, then helped the anti-SANDER initiative qualify for the ballot, and finally declared neutrality on the fate of the powerplant. On August 12, 1987, Signal announced that it was withdrawing from the SANDER project due to lack of political support from the city.

After Signalís withdrawal, there was no source of major campaign funds to oppose the anti-SANDER Clean Air Initiative on San Diegoís November 3, 1987 ballot. (Signal did publish cartoon ads showing the San Diego Mayor and City Council as ostriches with their heads in a landfill.) SANDER's opponents triumphed as The Clean Air Initiative passed with 56% of the vote in favor of banning mass-burn facilities. SANDER was now illegal in San Diego.

AFC Withdrawal and Termination.

On August 12, 1987, the CEC received Signalís request to withdraw the SANDER AFC. This withdrawal was opposed by the San Diego City Manager in a letter dated August 19, 1987. The City Manager wished to preserve his options and find some way to salvage SANDER without Signal. The Energy Commission deferred to the City Managerís wishes and suspended the SANDER AFC until November 18, 1987.

At the Commissionís December 2, 1987 Business Meeting (after passage of the anti-SANDER initiative), even the San Diego City Manager had given up trying to stop the inevitable. The Energy Commission unanimously voted to terminate the SANDER AFC.