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Comment 3 for South Coast Air Basin Electric Reliability and Offset Assessment (ab1318-ws) - 1st Workshop.


First Name: Sharon
Last Name: Rubalcava
Email Address: sharon.rubalcava@alston.com
Affiliation: Alston & Bird

Subject: Comments on the Draft Final Report: Assembly Bill 1318: Assessment of Electrical Grid Reli
Comment:
These comments are submitted on behalf of Plains All American
Pipeline LLP.  We are writing to comment on the draft report titled
Assembly Bill 1318: Assessment of Electrical Grid Reliability Needs
and Offset Requirements in the South Coast Air Basin (Draft Report)
and specifically on the discussion of the availability of Emission
Reduction Credits (ERCs) for new greenfield power generating
capacity in the South Coast Air Basin (Basin).  
 
As the Draft Report explains, while there are exemptions for
existing power plants that repower using advanced generating
technologies, for new generation not directly linked to the
retirement of existing steam boiler facilities offsets must be
provided.  The Draft Report estimates that under the high bookend
scenario, the Basin would need an additional 615 megawatts of new,
greenfield generation.  Such new generation capacity would not be
eligible for the offset exemption in Rule 1304(a)(2) but would have
to supply offsets by purchasing ERCs or finding other means to
generate surplus emission reductions.  
 
Over the last ten years, Plains has purchased a significant amount
of ERCs for a project that is no longer proceeding, and it now has
ERCs available for sale.  Table III-4 of the Draft Report shows the
estimated amount of credits required in the form of ERCs for new
greenfield projects, assuming a 1.2:1 offset ratio.  Using that
information, the following table compares the estimated amount of
ERCs needed for such projects in tons/day (pounds/day) to Plains
current ERC holdings:
        
Pollutant	Tons/Day (lbs/day) Needed	Plains’ ERC Holdings (lbs/day)
NOx	0.76 (1520)	658
CO	0.93 (1860)	0
VOC	0.45 (900)	630
PM10	0.32 (640)	22
SOx	0.12 (240)	203
 
As you can see, Plains’ ERCs could provide offsets for a
significant percentage of the additional 615 megawatts of power
needed in the Basin under the high bookmark scenario.  Also, since
NOx and SOx are precursors to PM 10, the use of the NOx and/or SOx
ERCs as interpollutant offsets, set an appropriate offset ratio,
could provide an additional source of PM 10 offsets.  (A new power
plant would be in NOx RECLAIM and would not need the NOx ERCs.) 
Since Plains’  ERCs are available for sale and represent a
significant commitment of resources on behalf of the company,
Plains believes it is premature to claim that sufficient PM 10
offsets are not available at this time to satisfy the need for
offsets from new generation, and would object to legislation to
address this situation that might adversely affect the value of its
credits.           

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Date and Time Comment Was Submitted: 2013-11-06 10:25:21



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