.Richmond Debates Building Its Own Power Plant at the Chevron Refinery

City estimates that for a $3 million investment, the city would have a plant that could earn up to $20 million a year.

North Richmond looks at first to be a land of a thousand and one refineries, chemical plants, and incinerators. It’s a sea of busy-looking steel tubes, stacks spewing plumes of smoke, and parked semi-trailer trucks. Accompanying this industrial mish-mash are rows and rows of World War II-era single-family homes. As airborne industrial byproducts have wafted over nearby residents with the prevailing winds, some residents have, coincidentally or not, come down with scary and unpronounceable diseases. So when the city of Richmond, in response to the energy crisis, began a quest to install one more piece of heavy industry in North Richmond, residents and onlookers quailed at the thought. Richmond seems to have everything else, but does it really need a new power plant–particularly one located in Richmond’s industrial ground zero, the vast Chevron refinery?

The Chevron refinery in Richmond is so massive that even a large power plant would probably be relatively unobtrusive amid its pipes and tanks. Moreover, a power plant at Chevron would enjoy close proximity to fuel and transmission lines, and, for better or worse, it would strengthen the city’s bond with Chevron.

At a special study session last month, City Manager Isiah Turner presented the strategy: For a one-time, fully refundable investment of just $3 million, Richmond could have its own, local power. The city would purchase an available plot of land on the Chevron property and would fund the initial studies and hire a consultant who was in the business of this sort of thing. In fact–Turner had thought of everything–just such a consultant happened to be in the room, a man named Bill Roth. And, Turner warned, the city had to act fast: If it were to beat the California Energy Commission’s deadline of September 30 for fast-tracked emergency “peaker” plant construction, it could have the plant up and running in as little as two years. Otherwise, the project could languish in the application phase at the CEC for a year, going through the regular approval process. Once the plant was up and running, the city could begin to sell power to large customers and could even enter into a lucrative contract to sell energy to PG&E. Turner estimated the revenue potential to be anywhere from three to twenty million dollars a year for the city. The city would contract out for the operation of the plant, and its $3 million investment would easily be recouped once the project were underway.

Not only would the plant save consumers money on electricity bills, but the proposed size of it (one figure bandied around is 500 megawatts) could serve all of West Contra Costa County, including all of Richmond’s energy-draining industrial businesses. And, what’s more, Chevron was definitely interested. In fact, just before the study session, councilmembers went into executive session to negotiate with Chevron over the proposed land purchase. “There are two advantages of looking at the Chevron location,” says consultant Roth. “One, the refinery itself produces almost every imaginable fuel you can think of. Second, it’s a transportation hub for fuel. That is also unprecedented in power-plant development. Historically, it’s been natural gas. So you are suffering the consequences of being tied to one fuel. Part of this process is to see what fuel options are out there, to see what fuels could be made available. That way you can have an economic and physical diversity to the plant to give it a competitive advantage.”Roth, who worked with Chevron for ten years, approached the refinery in January about the possibility of teaming up with the city on a power plant. (Roth now has an agreement with Chevron–if the city doesn’t use Roth as the consultant, Chevron will pull out of the deal.)

Of course, a local power supply doesn’t mean that Richmond or the West County would be immune to blackouts or interruptions in power supply like the one that led to this month’s gas leak at General Chemical, a next-door neighbor of Chevron. A power plant would simply feed power into the statewide grid that is controlled by the California Independent System Operator. And unless Richmond forms a countywide municipal utility district or a local energy department, it will also have little to no control over the price of electricity for its citizens.

Still, City Manager Turner, for one, seems to be pinning his hopes for economic revitalization in part on this plant idea. “When you are situated in a city like Richmond, undergoing an economic renaissance, with the lowest unemployment rate in thirty years, hundreds of new jobs and hundreds of market-rate homes being built in the community,” he says, “one of the better ways to protect the future is to invest in energy-generating capacity.”

Although the council eventually voted to move the process forward, a couple of members are nursing some misgivings. “We tried to run a marina, we couldn’t do it,” Councilmember Tom Butt said at the meeting. “We tried to run a port, we couldn’t make any money. We tried to build a swimming pool, it hasn’t worked yet. I’m real suspicious if the city of Richmond is ready to be an entrepreneur of something of this scale.”

As the council debated, a small group gathered that night amid the dated splendor of the Shimada Room at the Richmond City Hall. It was not a happy bunch. The Richmond community activists–Henry Clark of the West County Toxics Coalition, and Green Party members Juan Reardon, Chris Darling, and Milton Kalish–settled into the plush green-leather chairs and weighed the consequences of putting a new 500-megawatt power plant into the most heavily industrial neighborhood in Richmond. They’re hoping to be able to present a counterproposal, one that might examine renewable power sources like solar or, less likely, wind.

“We wish they would slow down,” says Reardon. “They need public input. Do we really have an energy crisis or do we have something else–an accountability crisis?”

“The project just does not make sense,” says Clark. “If it uses natural gas, which is cleaner than coal and other approaches, it is still in the Stone Age when you look at solar and wind.” And there’s a question of environmental justice–is it right, the group asks, to add one more pollutant source to an area already blasted with toxins? “We can’t take any more pollution,” Reardon says. “We’re the dump of the bay.”

Tom Butt, who in his pre-City Council days headed a grassroots activist group dubbed “People Do!,” a takeoff on Chevron’s corporate slogan, says he shares many of the activists’ concerns about the plan, but didn’t vote to stop the study. “They talked about our partners being Chevron and PG&E,” he says. “And I don’t know where you can find more disreputable partners. PG&E created the energy crisis through incompetence and corporate greed, which doesn’t bode very well for them as a partner. And Chevron is a corporation, and their corporate objectives have to do with their bottom line and their investors, and they’ve never shown any tendency to do anything to the benefit of Richmond.”

Project consultant Bill Roth says that this attitude toward Chevron is unfair. Chevron, he says, wants to participate because they “want to do something to help the city solve the energy situation, and address the community’s economic goal.”

“Chevron has always been wanting to step to the plate and ensure that whatever they do is done in a safe way,” agrees Councilmember John Marquez.

“I don’t think anyone would say that the situations we’ve suffered,” he continued, referring to the various leaks and spills at Chevron over the years, “have been intentional. In spite of the bad slander that Chevron gets periodically, they’ve always tried to do the right thing.” Besides, Vice Mayor Nathaniel Bates adds, “Chevron would not benefit from the plant other than that they would be a consumer. They’re not going to be owning anything.”

The proposal is, as Turner repeatedly emphasizes, in an “embryonic” phase. But a recent vote by the Contra Costa County Board of Supervisors, which found that the county has so many existing and prospective power plants that no more need be built in the region, doesn’t bode well for Richmond’s forays into the electricity generating business. “With all the new plants coming on line,” explains Supervisor John Gioia (El Cerrito), “Contra Costa is more than contributing [its fair share] to the state’s energy generation shortfall.” The county already has plans for three new plants–a 880-megawatt and a 500-megawatt plant approved for Pittsburg and a 530-megawatt plant under review for an unincorporated part of the county. “Only one other county in California–Kings County–has more power plants,” Gioia says. Although the board’s vote wasn’t specifically aimed at Richmond’s proposal, it’s not exactly a ringing endorsement of support.

With the council’s vote to go ahead with studying the proposal, a committee made up of representatives from environmental, labor, business, and faith-based groups will soon be formed to advise the council on the plan. For now, though, Roth, Turner, and city staff are developing the outline of the proposal. There’s still a long way to go and many more public meetings before this proposal can turn into a 500-megawatt reality. And the question remains: Should the city of Richmond go into the power business? “There’s been a lot of discussion in the past of the potential health effects of people in this area from Chevron and other related chemical companies in the area, and the city has been in a position of simply being a permitter of things in the past,” Butt said at the study session meeting. “But now we would be the owner. We would be the polluter, and we would have to live with that.”


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