IT WAS THE END OF A HOT, SMOGGY SUMMER DAY in South Gate, and Wayne Gould had a tough job ahead of him. He had come to convince the locals that their small, heavily industrialized city -- already saddled with nearly two dozen state-designated toxic hot spots and a federal Superfund site -- would benefit from a massive new power plant.
In most communities, this kind of proposal would prompt a curt and resounding "no." Power plants are ugly, noisy and polluting, and South Gate already has more of that kind of industry than it can handle. But Gould, president of L.A.-based Sunlaw Energy Partners, told the 100 or so residents gathered in the civic auditorium that he had good news that went beyond the usual promises of high-paying jobs and tax money flowing to the city coffers. The plant -- to be called Nueva Azalea in a nod to both the community's Spanish-speaking population and its city flower -- would feature a revolutionary new technology his company had invented called SCONOx. With this platinum-coated catalyst installed in the plant's smokestacks, the 550-megawatt natural-gas-powered plant would, he said, be "the cleanest of its kind in the world."
Gould didn't stop there. "We believe," he said, "the air coming out of the stacks will be cleaner than the air going into the stacks." In other words, according to Gould, the 13.5-acre site just east of the 710 freeway where the plant would be built is so polluted that this soot-and-toxin-generating, fossil-fuel-burning plant will "actually clean the air."
Gould's excitement -- if not all his claims -- was warranted. It has been 13 years since the last major power plant was built in the Los Angeles area, a lag attributed to sluggish demand and oversupply. That is about to change. Spurred by the robust economy, demand for power in California has surged, and in the newly deregulated industry, private power companies are scrambling to meet the need. In recent years, however, environmental regulations have gotten a lot tougher, and prospective plants have to account for every pound of pollution that might spill out of their stacks.
For environmentalists and community advocates, the change in climate presents a dilemma, particularly with regard to the South Gate plant. On the one hand, they recognize the inequity of building such a plant in South Gate, already one of the most polluted spots in L.A., with a population that is predominantly low income, Latino and disproportionately exposed to the kind of industrial development that wouldn't stand a chance in whiter, more affluent communities. And at a time when California is experiencing an ever-worsening energy crunch, they fear the plant will be pushed through without receiving a thorough review. In the past 20 months, the California Energy Commission has received applications for nearly 9,000 megawatts of new power, more than in the previous 20 years combined. In a recent report on Nueva Azalea, the staff of the five-member commission acknowledged a "significant staffing workload problem."
On the other hand, many environmentalists have been championing the SCONOx technology as a far cleaner and less dangerous alternative to the current industry standard, which requires ammonia and has resulted in some nasty spills. They have pushed hard -- and failed -- to make SCONOx a requirement at three other new plants.
If Nueva Azalea is constructed and operates successfully, it would be the first large-scale proof that SCONOx works, and could pave the way for new, lower emissions standards that would help clean up pollution in L.A. and around the state. "If you are going to build a power plant, you should use the SCONOx equipment, or something else that works as well," said Gail Ruderman Feuer, senior attorney for the Natural Resources Defense Council. "In the case of this particular project, it's a matter of environmental justice. What are the impacts?"
DEMAND FOR ELECTRICITY IN CALIFORNIA IS GROWing at a phenomenal rate. In each quarter since December 1999, demand has increased by around 10 percent, according to Peter Morrisberg of the Oakland-based Cambridge Research Associates. Historically, when demand in California surged, the state could export from the Southwest and the Pacific Northwest to help keep the juice flowing. Not anymore.
California can usually count on 8,000 imported megawatts during the summer. This past summer, it could barely scrounge up 5,000. One megawatt provides enough power for roughly 1,000 households, meaning this shortfall alone had the potential to leave 3 million homes in the dark. The reason for the shortage was twofold. It was a bad year for hydro power in the Pacific Northwest, while Nevada and Arizona, facing huge demand spikes of their own, not only curtailed their exports, they actually imported power from the Golden State on hot summer afternoons.
This has left California with a problem it's only recently begun to address. In order to keep power flowing smoothly, the state should maintain an electricity supply 15 percent above demand, according to the North American Electric Reliability Council. California, which produces about 53,000 megawatts of power, is now at 7 percent above demand, and dropping. After nearly two decades, during which very few new large plants have been built, four are now under construction, with a fifth scheduled to begin in December. Fifteen other applications, including Nueva Azalea, are in the pipeline. Nine additional proposals are expected to come in by the end of the year.
SCONOx, THE DEVICE AT THE HEART OF THE Nueva Azalea debate, is already in use at several small power plants around the country, including a 28-megawatt plant just north of South Gate, in the city of Vernon. The technology works by treating nitrogen oxide (NOx), one of the two main ingredients of smog. NOx, produced by the plant as a byproduct of burning natural gas, is diverted into emission stacks lined with hundreds of three-inch ceramic cubes containing a honeycomblike collection of smaller cubes. The devices, coated with platinum, act as a catalyst, converting NOx into its less harmful components. Some nitrogen oxide does slip through, but at levels far below the 2.5-parts-per-million ceiling dictated by the South Coast Air Quality Management District, the agency charged with ensuring that the L.A. air basin eventually meet its state and federal pollution-control mandates.
But even with the new technology, Gould's claim that the plant would clean the air is questionable. Nitrogen oxide is just one type of pollution power plants create. If Nueva Azalea is built, Sunlaw's scientists predict it will emit, among other things, 3.6 tons of volatile organic compounds (toxins like those in paint thinner) per year, as well as an average of one-third of a ton per day of a type of particulate matter known to emissions wonks as PM 10 and to the general public as soot. These are the tiny dirt particles that can be inhaled into the lungs and which have been shown in numerous studies to contribute to a range of respiratory problems, including asthma, especially in the elderly and in children.
Though the air in the L.A. basin is much cleaner than it was even a decade ago, the region is still far too polluted to be healthy, particularly in areas like South Gate, which sits at the heart of Southeast L.A. Last spring, the South Coast Air Quality Management District released the most comprehensive study of urban toxics ever conducted in the L.A. basin. It found that diesel exhaust caused more than 70 percent of the area's pollution, and that the risk of pollution-caused cancer throughout the region is 1,400 per million people. The greatest risk, according to the study, is in South Central and Southeast L.A. In 1998, the nonprofit environmental-advocacy group Communities for a Better Environment analyzed the cumulative health risk of a range of pollution in Southeast L.A. The study, called "Holding Our Breath," concluded that while individual sources of pollution may not have the potential to make people sick, when pollution sources in the area were looked at together, the risk shot above levels considered acceptable by the state. Three of nine major polluters identified in the study are located in South Gate. The residents of Southeast L.A., the report stated, are "breathing a toxic soup."
Technically, according to federal and state mandates, until the air is clean, all new polluting industry in the L.A. area is forbidden. In reality, a system has been created under which new projects can buy credits from companies that shut down or from existing projects that don't pollute as much as the state allows them to, and so have extra credits to sell.
The Sunlaw Corporation has been profiting from this system for years, selling the unused pollution credits from its cleaner-than-standard power plant in Vernon. Those credits are then used by other power plants, enabling them to create the pollution Sunlaw avoided. Now Sunlaw plans to use those credits to help cover any pollution it creates at Nueva Azalea.
THIS IS NOT THE FIRST TIME SUNLAW HAS TRIED TO build a power plant in South Gate. The city's proximity to large amounts of reclaimed water and a major natural-gas pipeline, as well as its permissive attitude toward heavy industry, make it, in Sunlaw's eyes, the perfect place for a power plant.
In the summer of 1999, Sunlaw offered to clean up the contaminated site of a former city dump and build a plant there. But South Gate City Councilwoman Xochilt Ruvalcaba strongly objected. "They wanted to make this decision in closed session," said Ruvalcaba, who also works as an aide to Los Angeles City Councilwoman Ruth Galanter. "I said, 'The people have a right to know.'" Ruvalcaba recorded a message about the proposal and had it automatically phoned to the homes of South Gate's 22,000 voters.
"Yes, we do need more power here in California, and I acknowledge that," Ruvalcaba said. "But South Gate is not the place for it. We've already given enough. It wouldn't be happening if we lived in Beverly Hills." About 200 residents showed up at the next council meeting to speak in opposition to the project, and the council tabled Sunlaw's offer indefinitely.
When Sunlaw returned a year later, the company took a different tack, setting its sights on a diesel-truck depot owned by J.B. Hunt Transportation Company and located just east of the 710. This time, as Sunlaw president Gould demonstrated in his presentation on that smoggy summer evening in the town auditorium, Sunlaw had done its homework.
After making his "Our plant will clean the air" claim, Gould reminded his audience what the AQMD study had shown: that diesel exhaust is a leading carcinogen in the L.A. basin. Nueva Azalea, which Sunlaw estimates will cost more than $300 million to build, would displace the truck depot, ridding the city of a major source of diesel exhaust.
The plant, he said, would also pay more than $3 million in property taxes each year, tripling what the city collects now. In a city with an unemployment rate nearly 50 percent higher than the countywide average, there would be hundreds of union construction jobs. He showed slides of the plant's sleek, modern design, modeled in part, according to the architect, after Simon Rodia's Watts Towers. Gould pledged that his company would be a "good community neighbor."
He talked about Sunlaw's involvement in nearby Vernon, where the company has two plants. Each year Sunlaw sponsors a career day at Vernon Elementary School, and last spring they took all the kids to Disneyland. Gould promised to donate $150,000 to South Gate beautification and other city projects and to build a sound wall to shield the Thunderbird Village retirement mobile-home park from the sound of both the plant and the nearby 710 freeway. The company had already sent several glossy mailers to residents near the proposed site, and funded the city's annual Cinco de Mayo festival and the South Gate Street Fair, a role it trumpeted in a two-page full-color center ad in The Bridge, a newspaper published by the city's Chamber of Commerce.
Still, some residents who attended the meeting were wary. Linda Forrester, who lives in Thunderbird Village and came to the meeting with her granddaughter, liked the idea of a sound wall ("We've really needed one for a long time"), but was skeptical about whether Sunlaw would keep its promises and suspicious of what the company expects in return. "I have a real hard time believing people when they speak," she said. "I want to see just exactly what they're up to, and whether this thing is already set in blood."
Opponents of the project hope not. Bahram Fazeli of Communities for a Better Environment, which has offices near South Gate in Huntington Park, says construction of Nueva Azalea would expose an overburdened community to even more health risk. "It sends a message," he said. "If you want to build something that could harm people, bring it here."
The organization has filed with the state as an official "intervenor" on the project. As such, the group has access to all materials related to the application and is allowed to participate directly in the hearings before the California Energy Commission, bringing its own witnesses and cross-examining witnesses for Sunlaw. That will give them the chance to officially challenge Sunlaw's claims, many of which, Fazeli said, are overblown or misleading.
In making its claims about the ability of SCONOx to clean the air, Sunlaw relied in part on its own projections of how much pollution it believes the plant will make. Those figures are now under review by the commission. The company also relied on readings of exisiting pollution levels. But rather than use data that is gathered regularly by the AQMD at pollution monitoring stations nearby, Sunlaw set up its own monitor, from December 3 to December 8, 1999, at J.B. Hunt, the diesel truck depot where the company hopes to build Nueva Azalea. The Sunlaw readings show higher ä maximum levels of some types of pollution than the readings over the same period at the AQMD stations. In its application to the commission, Sunlaw explains that it wanted more accurate information about actual emissions.
One of the emissions of particular concern to Communities for a Better Environment and the energy commission is PM 10, or soot. In its own application to the commission, Sunlaw says that once the J.B. Hunt depot is gone, soot levels will drop. It stands to reason, then, that any determination of whether the Nueva Azalea plant will be "cleaning" the air would have to be based on a measure of the pollution at the site without the trucks. Yet Sunlaw gathered its emissions data at a time when there were hundreds of semis rolling in and out of the depot. In a recent commission report, staff found that Sunlaw's pollution data "may have been heavily contaminated by emission from the diesel trucks." Fazeli concurred: "How can you include a major emission source in your analysis when you know that source won't be there? It makes no sense."
The commission staff also found that Sunlaw incorrectly measured the impact of the soot-like particulate matter that would come from the plant's cooling towers. The staff plans to conduct its own analysis.
If the project is built, the diesel trucking company will indeed move out of South Gate, but according to J.B. Hunt's plant manager, a portion of the operation will likely set up shop in nearby Commerce, another Southeast L.A. city with plenty of its own pollution woes. The hundreds of trucks required during the 20-month construction period would generate a lot of pollution of their own. Construction would also bring several hundred jobs, but once Nueva Azalea is open for operation, the largely automated plant would require only about 35 workers. Of those, Sunlaw would bring in as many as 12 existing employees, if the company decides to shut down its Vernon plant, according to Tim Smith, vice president of power development for the company. J.B. Hunt, which has more than 500 workers, is one of the biggest employers in South Gate.
The staff of the energy commission has also raised other questions about many aspects of the operation, from the use of city-supplied drinking water for steam, to the visual pollution created by vapor plumes that could reach up to 300 feet in height and 600 feet in width. Even sans plumes, at 150 feet, or approximately eight stories, Nueva Azalea would be the tallest building in South Gate.
Both Communities for a Better Environment and the energy commission staff are concerned about Sunlaw's proposal to use pollution credits intended for volatile organic compounds to cover the plant's soot emissions instead. Because there is so much soot being generated in the L.A. basin, unused soot credits are hard to come by. Such swapping is, in some cases, permissible, according to the commission staff. Whether it will be allowed here, and to what extent, depends on how bad the soot problem is in Southeast L.A. and, the commission staff said in a recent report, requires further review. The health problems related to soot have been well documented, counters Fazeli, and allowing more of it would be a mistake.
Fazeli also points out that the proposed South Gate site, in the heart of Southeast L.A., is surrounded by other cities that are also economically underachieving, overwhelmingly Latino and heavily polluted. According to Sunlaw's own application, there are nine churches, three schools, four parks and a hospital all within a mile of the plant. A Weekly phone survey of 13 nearby cities found responses ranging from complete ignorance of the project to serious concern. The superintendent of schools for the city of Downey, which is just east of South Gate and within a few blocks of the proposed plant, sent a letter to the state commission expressing concern over the project. And the Downey City Council has hired an environmental consultant to assess the project's impact on their city. If Nueva Azalea moves forward, Downey, Cudahy, Bell Gardens and the rest of the nearby cities will get all of the pollution, and none of the financial benefits that make the plant so tempting for South Gate.
SOME ELECTED OFFICIALS WHO MIGHT BE EXPECTed to automatically reject the idea of building such a plant in an already environmentally degraded area have not.
The area's state senator, Martha Escutia, has endorsed the project and even allowed her photo to be used in a Nueva Azalea promotional brochure. Escutia's husband, campaign consultant Leo Briones, is running the Nueva Azalea public-relations drive. Escutia, who last year authored legislation to tighten pollution standards near schools, said she was impressed with the SCONOx data and that she had come out in support of the plant long before her husband was hired by Sunlaw. "Once the whole issue of power plants is demystified and people see that it's not a nuclear plant," she said, "I think people will see that it's a good project."
State Assemblyman Marco Antonio Firebaugh, who represents South Gate, has not taken a position on Nueva Azalea, but earlier this year he accepted a $25,000 contribution from Sunlaw to the California Friends Latino PAC, a political-action committee he controls. "Given the energy shortages we're facing, we need to do something about energy production," he said. Nonetheless, he said, he's asked the Frank G. Wells Environmental Law Clinic at UCLA to review the Nueva Azalea application. "On paper, the project looks good. We need to make sure it lives up to its billing."
Even closer to home, only one of the five members of the South Gate City Council, Councilwoman Ruvalcaba, has come out in opposition to the project. The council has no say in the California Energy Commission's final decision on whether Nueva Azalea gets built. But given the city's demographics and the commission's federally mandated environmental-justice review, strong local opposition would be tough to ignore.
At a July 25 meeting, the council was set to consider a proposal by Ruvalcaba to let the residents of South Gate weigh in by placing an advisory vote on the November ballot. In a city where voter registration has increased more than 12 percent since the 1996 presidential race, those results could have given a good reading of community sentiment toward the plant. But before Ruvalcaba could make a motion on the November proposal, Mayor Hector De La Torre introduced a counter motion that the measure instead be put on the municipal ballot on March 6, 2001, the day before the staff of the California Energy Commission is slated to complete its final assessment of the project. (As is almost uniformly true, voter turnout for municipal elections in South Gate is just a fraction of that for general elections.) De La Torre argued that by March more information would be available about the project, and residents could make a better decision.
The city attorney suggested that the mayor's proposal be tabled until a future meeting, but De La Torre insisted on a vote. The measure passed unanimously. Then Ruvalcaba asked the council to consider her November proposal. De La Torre immediately objected, saying that the matter had already been decided. The city attorney concurred, and that was that.
De La Torre, who says he has taken no position on the plant proposal, works as a corporate contributions project manager for Southern California Edison, which controls the transmission lines that would carry the power generated by Nueva Azalea. De La Torre said he has consulted with both South Gate's city attorney and with attorneys at Edison, who have advised him that there is no conflict of interest because power transmission is regulated by the state's Public Utilities Commission and "Edison has no choice in the matter" of whose power it carries.
The mayor said that given Edison's size (it is one of the five largest companies in Southern California), the Nueva Azalea plant is as insignificant to his company as "a flea on an elephant's butt." He also pointed out that the city of South Gate hired its own, independent environmental consultant, who will be issuing a preliminary report on the Nueva Azalea proposal in mid-October. De La Torre, whose political experience includes a stint as an aide on energy and commerce to Congressman Richard Lehman, has vowed to remain unbiased on the project, though he says the city has to be realistic about the type of development it expects to attract. "We're a city with a lot of heavy industry surrounded by other cities with a lot of heavy industry, and you've got to take that into consideration," he said. "I see it as my role to get the information to the people and let them decide."
THOUGH THE CITY VOTE ON THE POWER PROJECT may say a lot about the character of the community and its leaders, in the end it will probably carry little weight on the fate of Nueva Azalea. That decision lies exclusively with the California Energy Commission, established by the Legislature in 1974, in part to buffer the siting process from NIMBYism and political maneuvering. The five-member, governor-appointed commission now decides the fate of all major power plants in the state. "The fact that a number of people want or do not want a project is not the issue," says Commissioner Robert A. Laurie, a land-use attorney who was first appointed by Governor Pete Wilson. On the other hand, he says, "If we had those same people walk in and say there are problems with traffic, aesthetics, noise or air quality, and if they provided some rational basis for their concerns, that would be relevant."
All power-plant developers must submit to an application process that includes thousands of pages of analysis of -- among other things -- air and water quality, public health, traffic and noise. Only recently has environmental justice become a codified concern for the commission, which bases its review on guidelines issued by the federal Environmental Protection Agency. Nueva Azalea is one of just two projects that has applied for permission to build in a community with such a large minority population, according to Jim Adams, the commission's expert on environmental justice. Once the commission staff weighs in, the application goes to the five-member commission, which hears testimony from both supporters and opponents.
The entire process is supposed to take a year, but since deregulation, the commission has been swamped with new applications and the process has taken anywhere from 13 months to two years and five months. Nueva Azalea's 12-month review began in August 2000 and is scheduled to wind up in August 2001. Sunlaw hopes to have the plant up and running by the summer of 2003.
This summer's statewide energy crunch and the subsequent San Diego rate spike riled residents and spurred nervous legislators to pass SB 970, an 11th-hour antidote that cuts the application time in half, raising concerns that power plants will be pushed through with little more than a glance. Sunlaw had initially led the city to believe that it would not seek an accelerated review. But at a hearing on Monday, an attorney for the company asked the commission to cut the review time for Nueva Azalea to 10 months. Anne Simon, staff attorney for Communities for a Better Environment, argued against the change, saying it would rob the public of the chance to scrutinize the project. Such a change, she said, would be " inconsistent with the commission's commitment to public participation." The commission will make a decision on the scheduling change within the next two weeks. But some environmentalists fear that in the current political climate even the plants that receive the full-year review may not be subject to sufficient scrutiny.
Only once in its 25-year history has the energy commission flatly rejected an application. That proposal, for the Crockett Cogeneration plant near Martinez in Northern California, was later resubmitted and accepted. Since deregulation, all five plant proposals that have completed the commission's application review have been approved.
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BEFORE WAYNE GOULD WRAPPED UP HIS PRESENtation to the people of South Gate, he acknowledged that Nueva Azalea might give them cause for concern. "Your experience with heavy industry demands that you be skeptical of the promises that we make," he said. "We stand willing to extend a covenant. If we break that covenant, you may shut us down."
With all the focus seemingly directed at plant construction, there's been little talk of alternative energy sources, improvement of the state's antiquated power transmission lines, or even conservation, all of which could ease pressure to build new plants. "There is no question that the best solution for our growing electricity needs is energy conservation," said Gail Ruderman Feuer of the Natural Resources Defense Council. "If our state were to make a real effort to conserve energy, it could make an enormous difference."
The next public hearing on Nueva Azalea is scheduled for October 18 in South Gate. Additional information on the project is available at www.energy.ca.gov, the energy commission's Web site.
Research assistance provided by Lovell Estell III and Debbie Picker.