Project Manager: Rick Buell

Staff Counsel: Caryn Holmes

Hearing Officer: Ed Bouillon, Jr.

Presiding Member: Chairman William Keese

AFC Filing, Data Adequacy, and Project Description.

On March 3, 1999 applicant Ogden Corporation filed its Application for Certification for the nominal 500 MW Three Mountain Power Plant Project to be located in the Burney Valley of northeastern Shasta County, about one mile from the town of Burney, approximately 45 miles east of Redding. The natural gas-fired merchant facility was to be located on an industrial site next to an existing 10 MW biomass plant owned by an applicant affiliate.

Three Mountain was originally found to be data inadequate by the Commission on April 14, 1999. Two-months and numerous applicant submissions later, the Commission accepted the project as data adequate on June 23, 1999.

Once a project is declared data adequate, the one-year clock starts by which the Commission is supposed to complete an AFC. Most proceedings take about a year, but those that linger on are certain to have serious problems that destroy any normal schedule. The Three Mountain AFC nearly managed to hit the two-year mark, primarily because of environmental impacts associated with its water supply.

Applicant's original proposal was for a conventional wet cooling system, with a water supply to be provided by the Burney Water District. The water district relied upon groundwater, supplying about 1,300 acre-feet per year for its existing customers. The Three Mountain AFC stated that the powerplant would need an additional 2,460-2,900 acre-feet of water annually, approximately double what the district currently supplied. This spelled real trouble, especially in a sensitive watershed with nearby neighbors such as Burney Falls.

Issues.

Water Supply/Biology.

Burney Falls is in the California State Parks system. The perceived threat to the falls from the powerplant brought in the California Department of Parks and Recreation as an intervenor, represented by the State Attorney General's Office. This was bad news for the applicant. The leading local opponent was the Burney Resource Group, a citizens organization who intervened with water supply and water related impacts as their main issues, plus air quality. Of all intervenors, the Burney Resource Group was most hostile to the project in general as a large industrial intrusion upon their rural lifestyle. Another intervenor was California Unions for Reliable Energy (CURE). CURE also attacked this non-union project for its adverse water impacts. CURE championed dry cooling as it had in other cases (See Elk Hills, Docket No. 99-AFC-1.)

The proceeding was initially consumed by lengthy analysis and disputes concerning precisely how much of the present flow over Burney Falls would be lost to the water supply needs of the Three Mountain plant. The data, such as it was, seemed capable of different interpretations. However, it appeared that some direct impacts to Burney Falls were inevitable, but applicant sought to minimize them. CEC staff and the intervenors believed that the project impacts upon Burney Falls and the water basin appeared to be significant. The water impacts also had the potential to cause adverse biological impacts, negatively affecting sensitive/protected species (the Shasta crayfish) that relied upon existing springs. The springs could also decline due to Three Mountain's appetite for water.

CEC staff had great difficulty completing its analysis in water and biology because of problems related to exactly how impacts from Three Mountain could or should be determined. Staff hesitated to reach any conclusion it could not defend, given the lack of proper data, and thus deferred the water and biology sections of the Final Staff Assessment.

The Three Mountain proceeding was languishing over the water supply issue, plus intervenor objections to the project raised in other subject areas, including air quality. The applicant was caught between hostile intervenors, a series of highly contentious motions, massive data requests, an uncertain staff, the prospect of further delay, then a major adjudication, all leading to an unpredictable result. And it was the applicant's own fault, because Three Mountain's original water supply proposal never seriously took into account the environmental problems it would create in the Burney Area. This was Ogden's first AFC at the Energy Commission, and applicant inexperience had proven costly. But Ogden had learned how to get things done in California.

Wet/dry hybrid cooling.

By the summer of 2000, applicant Ogden Corporation was negotiating for a way out of its water supply dilemma. A series of stipulations were reached. On August 18, 2000, Three Mountain's Settlement Agreement with the Department of Parks and Recreation was filed. There was a separate agreement with CURE that included unionization provisions. And a CEC staff/applicant stipulation was signed that covered both water and biology issues.

The centerpiece of these agreements was applicant's new "parallel wet/dry hybrid cooling system." This technological configuration, a combination of both the wet and dry methods, reduced Three Mountain's water supply needs to no more than 950 acre-feet per year, approximately a 2/3 reduction from the original proposal. Of that amount, a maximum of 600 acre-feet per year would be new groundwater, with 350 acre-feet per year saved by converting the existing biomass plant on the site to dry cooling.

With CURE, the Department of Parks and Recreation, and CEC staff now sufficiently satisfied that potential adverse environmental impacts to Burney Falls could be avoided and other water/biology impacts mitigated, Three Mountain's major problem had been solved. The Burney Resource Group would continue to oppose the Three Mountain project, but they now lacked any issue that could kill the AFC.

There remained a great deal of analysis to be conducted on what was now a very different project from that described in the AFC. New conditions of certification needed to be drafted. Three Mountain was one proceeding in which the Committee and the parties were very thorough. Thus, the case still had a long way to go, even if the outcome now appeared favorable to the applicant for the very first time.

Adoption.

On May 16, 2001, the Energy Commission unanimously agreed with the Presiding Member's Proposed Decision and certified the Three Mountain Power Plant Project.

The applicant has been unable to begin construction of Three Mountain. The project appears to be another victim of financing problems. Everything remains "on hold" and a completion date for this facility is currently unknown.