Grayson Repowering

The Clean Air of Facts

Recent conversation about the Grayson Repowering Project has resulted in the publication of misinformation by individuals and groups. Rumors regarding Health and Environmental risks have sprouted, causing the spread of inaccurate and incomplete information. The best policy is to rely on facts. It’s with this simple idea that we bring the residents of Glendale the following information about the Grayson Repowering Project.

x The repowering of the Grayson Power Generation Facility and specifically the proposed repowering scenario of a 262 MW facility was developed with the intent to sell power to pay for the facility and to generate a profit.

✔ The proposed scenario as has been presented for nearly four years was developed to meet the ongoing needs of our customers, establish sufficient back up/emergency energy, honor our contractual obligation under the City of Los Angeles Department of Water & Power Balancing Authority agreement, and to sufficiently meet reliability contingency standards.

As has been mentioned by City staff on several occasions the question of selling excess power did arise during the initial review, analysis and discussion of the proposed repowering project. The Integrated Resource Plan document produced by PACE International also included a discussion of this issue. The perspective of that analysis was based on our core generating needs, plus required contingencies and the redundancy needed to ensure reliability as we established a peak need analysis. In their analysis, PACE included discussion of the opportunity to sell off peak power as a way to help pay down the cost of the repowering project, if the City was so inclined to move in that direction. Again this was an opportunity resulting from the need for GWP to size the plant to meet peak reliability requirements. The size of the plant and the configuration being considered was and is not in any way based on the premise of selling power as power provider. This information was discussed and it was decided not to follow that course of action and the issue has not been discussed again in nearly two years. Again, the size of the facility has not and will not change based on this “notion” of selling excess power.

Any sale of this type would require a Power Purchase Agreement that would be negotiated with the consent of the City Council and ultimately approved by the City Council and records clearly show that this type of proposal and consideration has not taken place at any time in the past. It was simply a discussion over two years ago that never developed beyond just that—a discussion.

The fact of the matter is that the cost of the repowering project can be sufficiently funded by the savings in the improvement of the heat rate, production efficiency, operating costs, and fuel costs without any increase in our customer’s rate for this specific purpose.

x The City is proposing the expansion of the Grayson Power Plant.

✔ Glendale Water & Power (GWP) is not proposing to expand the Grayson Power Plant. The driving force for replacing the obsolete Units 1-5 and 8* at the Grayson Power Plant is to ensure a reliable electric supply for the citizens and residents of the City of Glendale. A majority of the facilities located at the Grayson Power Plant were completed between 1941 and 1977.

We are proposing to rebuild substantial portions of the plant by taking old generating units out of commission, dismantling them, and building new, modern units in their place. This process is called repowering. The new repowered units will be cleaner, more energy efficient, and increase reliability of Glendale's power grid.

*Units 6 and 7 were retired several years ago and dismantled. Unit 9 is about 15 years old and will continue to operate.

x The cost of repowering the Grayson Power Plant is excessive.

✔ GWP is proposing to finance the repowering project, which has an estimated cost of $500 million, through the issuance of revenue bonds. GWP sells bonds to finance capital projects, and the payments for the GWP bonds are covered by the revenue that GWP receives from its customers based on its rate schedule. The tax revenues that the City receives are not used to pay off GWP bonds.The final cost will not be determined until the detailed design is finalized.

The repowering will not have a significant impact on rates. For example, the cost of generation at the repowered plant will be less (more efficient units burn less natural gas to produce the same amount of energy), and for short-term energy needs, the new units can deliver energy more cheaply than spot market power purchases that must be imported with their associated transmission costs. Additionally, the new units will be able to provide spinning reserve (on-line generation that can respond to losses in supply) more cheaply than purchasing and importing spinning reserve capacity from other sources.)

GWP is currently undertaking a cost-of-service analysis that will consider all GWP activities necessary to reliably deliver electricity within Glendale that are funded by rates, including capital projects such as the Grayson Repower. The development of a rate case is currently underway and estimated to be completed in February 2018. This rate case is not a result of the proposed project, rather an analysis of electric rates and the cost of providing and delivering reliable power to customer's homes.

x The Grayson Power Plant does not need repowering.

✔ The current units at the Grayson Power Plant are well beyond their useful life. Unit 3 is currently out of service. The remaining units (1, 2, 4, 5, and 8) are all 40 to 70 years old and are not expected to continue running much longer and maintenance on these units is temporary and very costly.

If GWP does not repower the Grayson Power Plant, after Units 1 - 8 are no longer available, GWP sources of supply will be limited to:

Approximately 100 Megawatts (MW)* of purchased power that comes from the northwest to southern California over the Pacific DC Intertie, and then through the LADWP system for delivery to the GWP system
Approximately 100 MW (some owned, some purchased) that comes from the southwest (Arizona, Nevada, Utah, and elsewhere) to southern California over three different transmission lines, and then through the LADWP system for delivery to the GWP system.
GWP's 39 MW from Burbank Water and Power's Magnolia Power Plant
48 MW from the remaining Unit 9 at Grayson

These four sources total 287 MW if everything is running (leaving no reserves to cover the loss of one of these sources). GWP's peak load is 350 MW and occurs during the summer or during a heat wave. This is when surrounding utilities also experience their peak loads. GWP would make every effort to purchase additional power to cover shortfalls. However, GWP's options are limited. GWP's ties to other electic systems for large power imports are limited to LADWP and what can only be brought through LADWP. If additional sources could not be contracted, then demand would exceed supply and the City would experience rolling blackouts.

In the past, LADWP has on an emergency basis provided spot supplies of power to tide GWP over. However, that was at a time when GWP has the Grayson Units operating and supplying some amount of power. With no Grayson Units except Unit 9 available to operate, the request that GWP would make of LADWP could be more than they could supply. Thus, GWP and the residents of Glendale would be left in a precarious position.

*A Megawatt (MW) equals 1,000 kilowatts of power

x GWP is repowering Grayson to generate excess power in order to sell it for profit.

✔ We are proposing to repower the plant to meet the City’s load demand and to ensure that there is a reliable source of power for Glendale. GWP is not repowering to sell energy for a profit. The capacity of the Grayson repower was driven solely by the reliability needs of Glendale and minimizing rate impacts to GWP customers. GWP is a publicly-owned utility and our mission is to provide clean and reliable power to the residents and businesses of Glendale.

x Glendale doesn’t need this much power and doesn’t need to build such a large plant.

✔ The capacity of the Grayson Repowering Project is driven to reliably serve the needs of the residents and businesses of Glendale. Without the Grayson Repowering and after Units 1 - 8 are no longer capable of running, the available capacity through imports from outside sources and and the one newer unit at Grayson Power Plant - Unit 9 - is 287 MW.

GWP must have in place sufficient reserve sources of power to cover the "loss of the single largest contingency." This means that we must maintain enough generating capacity to power the City even if there is an unexpected failure or loss of our largest single source of power. For GWP, the single largest source of power is the DC Intertie line, which transmits 100 MW of power to the City. See image of GWP's sources of power here. In fact, partial and complete loss of the DC Intertie line has occurred in the past, and some of the outages have been for extended periods of time. In addition, reserves must also be in place to reestablish reserves within one hour. With the loss of GWP's single largest contingency, the City would have only 187 MW of supply available for meeting its obligations.

GWP's system load exceeds 187 MW more than 80 days a year/ With respect to a peak day, GWP's peak load is 350 MW (with no allowance for reserve margin) and there would be a shortfall of 163 MW that would have to be supplied by resources internal to the City.

The Grayson Power Plant, once repowered, would add a capacity of 262 MW at average annual conditions (64° F). On a hot day (95° F), that capacity would fall to 242 MW. On the peak load day (100°+ F), the available capacity would be slightly less.

With 242 MW available at Grayson Power Plant, the City would have approximately 80 MW as reserve capacity. Thus, the Grayson Repower allows GWP to reliably serve Glendale by providing sufficient capacity to cover the loss of the single largest contingency and still meet load, as well as the non-operating reserve that could be started to provide the required spinning reserve.

Additionally, as GWP imports increasing amounts of wind, solar and other variable sources of renewable energy into the City, and as more solar power is generated locally in Glendale, this creates increased fluctuations on the power grid. A steady, constant source of energy such as that from the Grayson Power Plant is needed to balance out ("firm and shape") the energy so that a smooth and steady supply of power can be delivered to GWP customers. The old Units at Grayson Power Plant do not have the ability to rapidly adjust up and down to account for variances in solar output, based upon weather patterns on a minute-per-minute basis. Modernizing Grayson will allow us to manage renewable energy flows dynamically, so that energy deliveries will continue to be reliable.

x GWP isn’t going to install any renewable energy sources at Grayson.

✔ GWP will be placing solar panels onto the new buildings at the Grayson Power Plant, totaling approximately a ½ MW. GWP also plans to install 40 MW/80 Megawatt-hours (MWh)* of short term battery energy storage for regulation purposes at Grayson to reduce short-term cycling of units. This will be done after the power plant is repowered. GWP is committed to renewable energy and will continue to expand our programs to use more solar and wind power. GWP is a leader within California in supplying carbon-free electricity. In 2016 GWP sourced 64% of the energy it supplied to Glendale from carbon-free sources (compared to 44% for all of California). Glendale is already close to meeting the requirement for 2030 that publicly-owned utilities procure 50% of their electricity from eligible renewable energy resources. Today, far ahead of the 2030 target date, Glendale procures 47% of its electricity from eligible renewable energy resources. This number will only continue to grow.

GWP also provides incentives to Glendale homeowners to install solar power and has in place contracts for electricity from renewable sources. Currently, there are approximately 1,344 solar systems installed in the City, totaling 12.2 MW. This capacity is "behind the meter," with only a portion being delivered into the GWP electric system. GWP encourages rooftop solar, and solar installations have helped to reduce the load growth within GWP. However, because the State does not allow it to be counted towards GWP's efforts to State meet renewable energy mandates, this solar generation does not appear in Glendale's power resource mix.

*A megawatt hour (MWh) equals 1,000 kilowatts of electricity use for one hour.

x Repowered Grayson Power Plant will use potable water.

✔ The Grayson Power Plant would use recycled water for all process and cooling water requirements. The main use for recycled water includes boiler water makeup, cooling tower makeup, turbine power enhancement and cleaning and NOx control for the simple cycle units. Recycled water would also be used for Unit 9 in place of potable water currently being used. The use of recycled water would eliminate the need for 20 acre-feet of ground water from wells in Glendale and 41 acre-feet of potable water currently being used, which is also water efficient and helps improve the City’s overall water conservation efforts.

x California’s cap and trade program requires all power producers to pay a cost per ton of CO2 emitted. The cost is being underestimated.

✔ The cost of greenhouse gas credits would be incurred by Glendale whenever they use electricity from fossil fuel resources, whether GWP generates it or it is imported over the transmission system.Fossil fuel resources will be required until systems of energy storage have been proven on a utility scale for a utility such as GWP. The operating costs would therefore be incurred either way. Intermittent renewable purchase contracts also include a portion of fossil fuel generation.

x GWP didn’t consider solar panels and batteries to power Glendale.

✔ Utilizing solar power alone, whether generated locally or imported, would require a significant storage system to be built to "time shift" enough energy to cover approximately 65% of the hours that the sun is shining (the 65% value considers the variability of solar energy while the sun is shining). Such a system would be larger than any projects currently being contemplated or constructed to date, and is estimated to cost significantly more than the proposed project. As with all energy projects, battery storage projects also have ongoing costs, in this case the periodic replacement of the batteries and the efficient recycling of batteries.

If solar power imported over transmission lines (along with other carbon-free imports over those same transmission lines) was relied upon as the source of power, most of it would be consumed during the daytime, leaving little, if any, for charging the batteries. During the evening, when the transmission capacity exceeds the GWP load, solar power is not available. Thus, the batteries would be charged using non-solar carbon-free resources, and if they were not sufficient, then other fossil fuel resources.

For a utility scale solar power plant located within Glendale, a large site would be needed to generate sufficient energy to serve the daytime load and charge the batteries. For each megawatt of solar generation installed, approximately 4 to 6 acres are required. To provide the 262 MW that would be required to replace the units that would be lost at the Grayson Power Plant would require approximately 1,310 acres, or approximately 2 square miles. Such a large space is not available within Glendale.

Rooftop solar is another potential source of solar energy, and GWP provides incentives to Glendale homeowners to install solar power on their roofs. Currently, there are approximately 1,344 solar systems installed in the City, totaling 12.2 MW. Those systems are estimated to generate approximately 16.5 MWh of energy. However, the City cannot count on solar generation on private residential and commercial properties as it does not have control over these systems.

Solar energy sources do not necessarily need to be located within the City's limits. By freeing up transmission which would occur as the result of the Grayson Repowering Project, it would allow the City to either purchase or own solar outside the City's limits and transmit the energy into the City's electrical grid via the existing transmission lines.

GWP is pursuing the Grayson project because the need exists for another source of power to supplement the solar energy that could be utilized, GWP’s transmission import limitations, the necessity to be capable of dealing with the loss of a transmission line, and the need to add capacity as needed due to the intermittency of renewable energy (to balance out and manage the fluctuating power flows), all while still ensuring a reliable supply of electricity.

x Scholl Canyon can be used as a solar site.

✔ GWP partnered with a private developer two years ago to study the possibility of developing a solar project at Scholl Canyon. The developer determined that the site constraints at Scholl Canyon made it unsuitable for solar development. For example, the existing environmental control systems for the landfill are required even for a closed landfill (these systems gather methane gas that would otherwise escape to the environment, a gas that has a global warming potential 21 times greater than CO2). Those systems require continued access, which consequently limits the land available for solar panels. In addition, the landfill is subject to significant settlement, which would take the solar panels out of alignment, as well as complicating the electrical gathering system design, necessitating regular rebuilding and realignment.

x The repowered plant will increase air pollution in the area.

✔ The permitted emissions from the Grayson Repower project will be less than the permitted emissions from the existing Grayson Power Plant.

GWP developed emissions estimates for the Grayson Repower to use as a basis for permitting. The permitting process is based in part on the worse case daily emission and peak season monthly emissions coupled with the need to provide sufficient starts and operating hours for possible contingencies. Even with these conservative estimates, the permitted emissions from the repowered plant would be less than the permitted emissions from the existing plant.

The permitted emissions from the repowered plant would be greater than recent historic actual emissions from the existing plant due to the reduced operations resulting from the declining availability of the existing units. However, the increase in emissions is below the mass emission levels that South Coast Air Quality Management District (AQMD) considers to be significant. In addition, mitigating this concern are two considerations:

Actual operations are expected to be less than what is being permitted and assumed for analysis in the Draft Environmental Impact Report, reducing the actual change in anticipated emissions.
Mass emission levels (lb/day) serve only as a coarse indication of the true impacts of a project. For the Grayson Repowering project, we conducted extensive air quality impact analyses and health risk assessments in accordance with methodologies that are recommended and approved by both South Coast AQMD and US Environmental Protection Agency (EPA) based upon both maximum peak season and annual emissions. Those refined analyses demonstrate that the impacts on ambient air quality and public health are below levels of significance. All increases in pollutants such as NOx, VOC, PM10, SOx are further mitigated by offsetting 100 percent of the emission increase, plus another 20 percent, pursuant to South Coast AQMD regulations.

Greenhouse gas emissions (CO2) are assessed on a global basis. Greenhouse gas emissions from the project will be offset through the purchase and surrender of greenhouse gas credits to ensure that the total level of greenhouse gasses continues to decline in accordance with California policy and regulations.

x Demolition of the existing facility and soil remediation will take 9 months; GWP hasn’t ensured contaminants won’t be emitted.

✔ During demolition of the existing facility, waste removal plans will be developed and implemented to ensure that no lead or asbestos or other known contaminants are emitted into the atmosphere. Demolition will be done in accordance with applicable federal, state and local requirements. These requirements address containment and handling of materials, as well as a monitoring plan to ensure compliance. These requirements are not specific to the demolition of a power plant; they apply to all demolition work. The contractors we will use are licensed to do this type of demolition and meet these requirements.

For more information on the Grayson Repowering Project, visit www.Graysonrepowering.com

*Following shared concerns, the statement below has been edited above.

QUESTION: Does the Grayson Power Plant sit on a mapped Liquefaction Hazard Zone?

ANSWER: Like much of the Glendale area, the Grayson Power Plant site is located within a liquefaction hazard zone. A site-specific geotechnical study for the repowering project was performed and included analysis of both seismic and liquefaction risks. The geotechnical study included recommendations for project design in conformance with applicable building codes, which include considerations for seismic and site-specific liquefaction hazards.

The site has been the home to the City’s local generation for over 75 years and has been subjected to several major earthquakes, including the Sylmar and Northridge earthquakes. Notably, GWP has been able to restore electricity to its customers faster than any other nearby city or Southern California Edison, in part due to having local units at Grayson that were either already operating or were started up, due to seismically-induced loss of transmission imports.