April 30, 2009
Solar Energy Meets Greenies and Big Labor
It was a squirrel, a labor group and an environmental group along with California's tough environmental regulations, which helped kill a hybrid solar power plant project for a Mojave Desert city.
It seemed like a good idea at the time. The City of Victorville prides itself on being a green city. They recently bought a number of hybrid vehicles for their city fleet. And they are located in the Mojave Desert which receives large amounts of sunshine every year.
When California Governor, Arnold Schwarzenegger (R), signed legislation that requires a portion of additional electric power generation to be sustainable, the City proposed a hybrid solar electric power plant. The plant would combine a solar thermal powered system along with a natural gas fired system.
After much fanfare at the start, the project began to run into problems during the permitting phase. The California Environmental Quality Act (CEQA) imposes a strict review process. The California Energy Commission (CEC) is the state agency that conducts the environmental review.
The first problem was the squirrel, or more specifically, the Mohave ground squirrel, which is considered to be threatened. While the squirrel has never been found at the project site, nor was there any evidence it had ever lived there, it could decide sometime in the future to live there. As a result, the California Department of Fish and Game decided that the squirrel required a mitigation ratio of 3:1. This means that 3 acres of the desert needs to be purchased and set aside for the squirrel for every acre of project site. This increased costs dramatically since there were few parcels available for set aside.
Next was the labor union group called CURE, which is an acronym for California Unions for Reliable Energy. CURE is supported by various construction unions. It has a history of fighting new projects in California unless the applicant agrees to use union labor for the project.
In February 2008, the Sacramento Bee editorialized:
Labor unions are an even larger abuser of CEQA. In recent years, labor groups have used environmental lawsuits, or the threat of such suits, to stop or slow down power plant construction, hospital expansions and housing developments. The unions' lawyers always seem to disappear once a developer has signed an agreement to hire only union labor...
For several years, a group called California Unions for Reliable Energy has used CEQA to slow or block power plants, including a geothermal plant in Imperial County. As it happens, CURE employs a law firm founded by Tom Adams, the current president of the California League of Conservation Voters.
CURE petitioned the CEC to become an intervenor in the review process and it was granted. CURE then began to request a lengthy data request of 152 items about the project. For example, they inquired "whether the City would implement a noxious weed preventive program"
When the CEC finally ruled against the various objections that CURE raised, the labor group then filed suit against the local air quality district in Superior Court which eventually ruled against CURE.
Then the Natural Resources Defense Council gets involved. The City tried to purchase pollution credits from the Los Angeles air basin for the natural gas portion of the plant since there were not enough local credits for purchase. But the NRDC filed suit against the purchase and prevailed. The NRDC bills itself at "The Earth's Best Defense".
The delays and burdensome requirements were costly to the City. For a while they tried to sell the project, but there were no buyers. Finally, the City ran into cash flow problems and could not pay General Electric for the steam turbines for the plant. Right now, GE is seeking to find ways to recover its costs. A couple of weeks ago, GE terminated its contract with the City and demanded immediate payment. According to the Daily Press in Victorville:
Those terms allow GE to keep Victorville's $50 million deposit on the equipment, plus either demand a $108 million termination fee or take control of the Victorville 2 power plant.
The City has few options at this point, but the price tag GE demands could force the City into bankruptcy.
It is possible that the project could still be built if GE decides take control over it, but the stiff environmental conditions would still have to be met.
In addition to these woes, the City is under investigation by a grand jury for financial dealings and S&P has downgraded several City bonds to junk status.
This story about going green in California may be repeated elsewhere in the state under the burdensome California requirements. While Gov. Schwarzenegger restates his commitment to going green, the reality is that the State's regulatory climate discourages green energy.
The unions and the environmental groups purportedly support green projects, but they in fact, often oppose them for environmental reasons. And Senator Diane Feinstein (D-CA) recently expressed opposition to solar panels in the Mojave Desert which is ideally suited for solar power in the state.
The green energy projects were supposed to create jobs for California workers according to Schwarzenegger. However, while there were jobs created for this project, many of those jobs went to lawyers.
Without these green projects, California may eventually face more blackouts. If it happens, the blame will fall squarely on the green lobby which advocates out of both sides of their collective mouths. They say they want green energy, but they will not support green energy.
The Main Stream Media are also complicit since they have been silent about the Victorville fiasco and similar projects. The only news coverage is in the local newspaper and in trade journals.