What Kind of Glendale Do We Want to Live in?
By Dan Brotman, Adjunct Professor of Economics G.C.C.
Glendale Water and Power (GWP) is proposing to replace all but one unit of the Grayson plant with new generators. They call it a
“repowering” and paint it as a long overdue upgrade to an aging facility. But don’t let the word repowering mislead. This plan would greatly expand Grayson and produce vastly more power than Glendale needs. And it is essentially a stealth tax, as I will explain.
Some numbers first. Today, Grayson can generate about 230 megawatts (MW) of power. In addition, Glendale has transmission lines over which it imports up to 170MW of power from as far afield as Wyoming. This gives Glendale a capacity of over 400MW. Against this, Glendale’s “peak” need – which it approaches a few days each every year – is 350MW. It usually needs less – the summer average is about 225MW. But like any utility, it has to be ready for surges to avoid catastrophic black outs.
The new Grayson – plus a sister facility to burn biogas at Scholl Canyon – will increase capacity by over 100MW, giving Glendale in excess of 500MW. For this, residents are being asked to shoulder $500 million in debt over 30 years.
This might be fine if we actually needed 500MW but that’s not the case. GWP expects demand to fall due to efficiency measures (even factoring in economic growth and more electric vehicles). Meanwhile, they assume rooftop solar will expand rapidly. So, if Grayson goes ahead, we would start in 2020s with 45% more power than we need and by the mid 2030s face a surplus of over 75%.
Why is GWP overbuilding? They claim they are legally required to keep a buffer of 100MW in the event long distance transmission is interrupted. But this is contradicted by legal experts well versed in utility regulations. Even if it were true, there are much cheaper ways to deal with this risk. As the expression goes: “follow the money”! GWP’s resource plan is full of talk about selling excess power in the market. Enough said.
You might ask, isn’t this a good thing? GWP sells power and generates revenue to expand city services. But it’s not so simple.
Being a power seller is risky. There is a glut of power in California right now, as outlined in a recent article in the Los Angeles Times. Maybe the glut will resolve itself, maybe not. But who will be left holding the bag if GWP can only sell at bargain basement prices? Do we want GWP betting our money in power markets?
And California is considering a bill that would require 100% of the state’s electricity to come from clean energy sources by 2045. If it passes in 2018, as expected, Glendale would have to mothball Grayson after less than 25 years of operation – five or more years before the end of its economic life. Who will wear this “stranded asset” risk?
We know the answer to both questions. Which is why this is basically a stealth tax. Put the debt burden on ratepayers, hope to sell power to fund the city, and if it doesn’t work out, well, that’s our problem.
Financially, this will be an albatross around our necks for decades. Environmentally, it will hang around our children’s and grandchildren’s necks for generations. The new Grayson would significantly increase greenhouse gas emissions which are giving us more extreme heat, fires and drought. It would also increase criteria pollutants, especially fine particulates which penetrate deep in the lungs and are associated with asthma, cancers and other illnesses. There are elementary schools, day care centers, businesses and residences close to the plant. But these pollutants will follow the prevailing winds and disburse far and wide across Glendale and into Burbank.
Additionally, the plant is sited in a designated liquefaction zone. This means that when the big one hits, the group will behave like liquid and potentially shift several inches. Unless GWP can design gas pipes to withstand such forces, we can except gas leaks and explosions. Even if it is able to shut off the gas flow, the plant, which we’re told is for emergencies like these, would be of little use.
All of this is completely unnecessary. Clean energy technologies are available today to provide all the power Glendale needs at competitive prices. Some will argue that battery storage is not fully commercialized, but prices are falling fast and will soon be a viable solution to the intermittency of solar and wind. The sensible approach is to watch and wait, and be poised to invest when the time is ripe. And if these technologies disappoint, we can always phase in small “peaker” plants one at a time to meet our immediate needs. All at a fraction of the cost GWP is asking us to swallow.
What kind of Glendale do we want? A backward looking Glendale which fills its coffers with the sale of dirty energy and pollutes our air? Or one which looks to the future of clean energy, respects our health, and talks to us honestly about the costs of running the city. I choose the latter and plan to show up at the Oct 16th and 19th hearings on Grayson to speak up. I hope to see you there.
Adjunct Professor of Economics