State Power Authority To Buy 3100 MW Of New Projects Tulare's Mega Energy Plants Are In - Biomass Left Out
Tulare - Here's a classic case of good news - bad news. With a war chest of $5 billion in revenue bonds the state will get into the power production business big time - promising to end the price gouging from out-of-state producers that we saw earlier this year. The new independent California Power Authority - approved by the legislature this summer - has just agreed to buy two proposed peaker plants in Tulare County currently being permitted here.
But the bad news is that the Authority, while encouraging the development of 3100 mw of new power statewide has left existing biomass power plants here in the valley out in the cold.
According to Kent Duysen, co-owner of Sierra Power in Terra Bella, the Authority will not accept proposals to buy any of the five biomass power plants in Merced, Madera, Dinuba, Terra Bella and Delano who have no current state contract to sell power. "We're bleeding pretty good right now," says Duysen.
The upshot is that they are likely to go out of business soon - in the case of Sierra Power - as soon as the end of this month laying off all 11 employees.
That in turn could mean tons of ag and wood biomass that is burned more cleanly in power plants today will go up in smoke in a return to open field burning in the valley. The relatively small Terra Bella plant consumes 50,000 tons of ag waste material a month all by itself. "We can't lose $100,000 a month selling electricity on the open market for 2/12 cents," says Duysen. Sierra Power reentered the power business earlier this year when the price of natural gas skyrocketed, used to dry wood at their sawmill. They decided to crank up their co-generation plant. They were rewarded for a short time with good prices for power as high as 13 cents in May as volatile markets whipsawed producers with prices for electricity that plunged later this summer for producers who didn't have long term contracts.
When the state was making contracts earlier this summer, the Dept. of Water Resources wouldn't negotiate with power producers like Duysen, below 25 mw.
All these existing biomass power plants are in the same boat - operating on the open market, he says. "We need a steady 6 to 6 and ½ cents to survive," he says.
Down in Delano the larger 50 megawatt wood fired biomass plant is hurting as well. The plant visible from Highway 99 just south of town takes "about 220,000 tons of ag waste from valley fields and burns them cleanly," says operations manager Wayne Amer. Without a state contract the plant owned by AES Corp. "is losing about $400,000 a month" because of the low cost of power on the market right now, says Amer. "We can't keep that up for long."
Some 41 employees work there. "It doesn't seem just or right that the state doesn't want to work with us," he says.
Now there is a power glut in California. Ironically, the Power Authority wants to only fund new power projects like the Tulare County plants being proposed by Mega Energy near Goshen and in Tipton.
"We expect a signed letter of intent with the Power Authority," says president of Colorado based Mega Energy J. Scott Hornafius who was notified just this week. "Then we have two weeks to finalize our permits with the county," he says.
The contract with the state says the developer - in this case Mega Energy - permits and builds two peaker power plants valued at around $36 million a piece and get them on line by July 2002 says Hornafius. "The purpose of the peaker plants to be used when the state needs the power in summer," he says. "We know that state lucked out this summer because of a mild winter and conservation we avoided those predictions of rolling blackouts."
Hornafius says only 13 gas fired plant proposals were funded by the Authority who received 82 proposals. Hornafius says the Authority favored projects who already had their building permits, air permits and firm plans in place. Each plant will produce 50 megawatts. Regarding the peaker's emissions Hornafius says that "that's why its so expensive because of the money put into the cleaning up the emissions coming from the new plant." "We have our authority to construct permit from the Valley Air District," says Hornafius.
The new Power Authority signed into law in May is modeled after the public power authorities like L.A.'s Department of Water and Power and a New York agency. The Authority will be authorized to build, own and operate new power plants on behalf of consumers. The Authority is designed to be accountable to taxpayers and claims it won't make a profit on the power. The new Authority works to stop volatile power prices the state has seen in the past year and assumes despite a glut of power in recent days that the lack of new power plants in the state has hampered business and the consumer.
The Authority is headed by former L.A. DWP chief S. David Freeman who rode herd on private power producers earlier this year suggesting many private power producers were "ripping off the consumer." The Authority's reason for being is to assure that Californian's "never again" have to face electricity shortages or price gouging. The Authority hopes to shore up the state's power as much as 3000 mw by next summer when mother nature may not be so kind as it was this summer.
To foster more renewable energy the Power Authority signed a letter of intent with some 1300 mw of "green power" much of it new wind power along with some 1800 mw of natural gas fired peaker plants.
The Authority's plan includes "retiring old dirty plants" perhaps one thousand they aren't looking at buying the older biomass plants. But Duysen and others note that the Authority had no proposals for new biomass plants and that the "social good" of cleaner air from the controlled burning of ag and wood waste rather than letting that stuff go up in smoke in the valley's skies, needs to be weighed as well.
Faced with the prospect of having no one to sell electricity to on a contract basis, the biomass facilities will be mothballed at a time when the Authority has $5 billion in funds to spend.
"There is real irony here," says Duysen.
Meanwhile the state isn't allowing buyer-seller private contracts anymore meaning Sierra can't sell its power to some user. "There will be no more real choice - no direct access" in the power business in the state after last July, says Duysen. Actually the state PUC is finalizing this issue this week in a vote.
The complicated power picture is part of the backdrop to the state's uncertainty over what to do about the pending Southern California Edison bankruptcy.
In the renewable energy category the California Power Authority has agreed to buy 1200 megawatts of wind power including more than 450 megawatts from four proposed wind power farms in Kern County.
Sanders Weighs
Run/ Chrisman Pulls Out Of
Congressional Race
Tulare County - The race for the new Congressional District 38 just got tighter this week as Mike Chrisman announced he would not seek either the Congressional seat or Assembly opportunity. "My family is my first priority " and the decision is a personal one, he says. "It's not that I would not welcome the challenge," he told the Voice but issues like "quality of life and need to make constant 3000 mile commutes" were key in his decision.
That leaves an opportunity in Tulare County for Supervisor Bill Sanders who says he now is considering a run "with some 9 and ½ years of experience I know how legislation affects us," says Sanders who was in the real estate and funeral business in Lindsay and has represented that area on the board now for three terms.
A Republican, Sanders says he hasn't been active in the party because the office he holds is non partisan. The 60 year old supervisor says he's up to the job. "I just climbed Mt. Whitney this summer in one day." Sanders says if he runs for the seat he would not plan to step down from his county job to make the race.
Sanders supporters contrast his experience with 27 year old Devin Nunes - the California USDA director - a political appointee of the Bush Administration. Reached this week, Nunes says he still is not ready to commit to run despite an active draft by a local committee. I need to "do my job right now" in a government with something on the table right now because of terrorist actions. Nunes needs a ruling by Bush officials if he can take some sort of leave to run for political office. "I'll make up my mind the first week of October," he says. Nunes - a local dairyman - is also a COS trustee.
Two strong candidates from Fresno County are expected to look closely at a run as well including former mayor Jim Patterson - who has few ties to Tulare County and current Assemblyman Mike Briggs - both expected to be well funded and seen as tough campaigners for the Republican primary.
While there is majority of the population in the new district from Tulare County the voting roles are "closer to 50/50," says Bill Sanders - meaning a candidate will have to draw as well from both counties to win.
But if one Tulare candidate can emerge and that person runs against two from Fresno County - the 58% Tulare County registration could mean a local gets in. "Tulare County candidates will have to have a Come to Jesus meeting," says one politico.
Earlier talk that Senator Poochigian might step into this race are now discounted since he plans to run for office in California, sources say, and his wife may run for Briggs' Assembly seat if Briggs runs for Congress.
With no incumbent in place and a primary in March likely to select the winner because of the strong Republican majority in the district, developments in the race are moving fast.
One factor in the race is that this time around there is no open primary - only Republicans can vote for the candidate. That could "move the candidate to the right" on issues. This in turn could give a moderate Democrat a better shot in the fall election.
In other political notes the race by Bill Jones for Governor is getting yawns from the L.A. Times in their Sept. 9 story "Jones Struggles To Stir Up Support." The article says regarding a Jones speech in Visalia that "There is little enthusiasm. During his half-hour appearance, the audience applauds twice, when Jones is introduced and when he finishes."
Not considered out of the question, Jones could decide to run for this Congressional seat at the last moment.
Visalia Oaks Strike Out In Reno
Visalia - The City of Reno council voted this week to reject a proposal by the California League to relocate the Visalia Oaks Single A baseball team.
The Oaks ownership were identified in a city staff report to the Reno council in recent days. The council rejected the idea since the Cal League offered no funding proposals leaving the cost to build a $21.2 million stadium up to Reno. The council said they were still interested in the possible move if other funding alternatives such as a property tax increase was approved by taxpayers. The Oaks, are owned by a partnership headed by Bay Area investor Tom Vople.
Reno has been considering a deal with either Single A or Triple A franchise. The staff report says the Triple A franchise ownership group has withdrawn from negotiations but that the Pacific Coast League wants to keep talks going.
The report concludes that "Staff is recommending that the City not accept the current Single A proposal received from the Visalia Oaks team and work with representatives of both the Pacific Coast League (Triple A) and the California League (Single A), if they desire, to develop possible funding sources at the next general election and/or at the next session of the Nevada Legislature."
The report continues, "The Single A team, Visalia Oaks, has identified what funding sources they would be willing to provide to assist with the construction of a new baseball stadium. In addition, they have refined the program development to lower the costs for a stadium and now feel that the cost for a Single A baseball stadium would be approximately $15.5 million plus the cost of land at approximately $5 million. The proposal from the Oaks includes a $1 million prepaid rent for the first ten years, then a rent of $100,000 per year for the next 10 years.
The Oaks proposal includes the City receiving any naming rights for the stadium, estimated to be up to $5 million, plus the proceeds from eight (out of a total of twelve) suites sales estimated to be $250,000 each with a suite holder agreement for twenty (20) years. "The Oaks proposal would require the City to market the stadium and suite sales to receive the estimated funding of $7 million. The $7 million plus the team commitment of $1 million prepaid lease would leave a gap of approximately $12.5 million."
Other Options
Back in Visalia, if any Reno relocation is put on hold the Visalia Oaks still could leave if two of the Cal League teams are bought out - to reduce the size of the Cal League from 10 to 8 teams. That scenario could still play itself out.
For the time being, the team will be playing next year in Visalia, however. The 2001 season was a disappointing one for attendance figures with the average attendance down to 812 from nearly 1000 two years ago and around 900 in the year 2000. Management claims that paid attendance numbers are up, however.
City Recreation staffer Don Stone made a presentation to the city council this week on new proposed layout for Rec Park that includes a 110 car parking lot off Giddings (behind right field) that could lead to a "new entrance to the ballfield," says Stone. Designing a new ticket gate may be more appealing as you enter the baseball park with the whole field laid out before you.
With only a year left on their lease with the City of Visalia and the Oaks making it clear they are exploring other options don't blame the city for talking to other users. The city has been contacted by a club from Arizona who plays pro ball in California about the possibility, sources say. Maybe there is a team that wants to play in Visalia after all.
Assistant city manager Carol Cairns says there is a Western League for pro baseball - one step down from the Single A level - for example might be interested. She says if the Oaks decide not to stay "I'm sure we will get some calls."
Not that she would like to chase the Oaks out of town. "We are wondering what it takes to get more people out to the ballpark," a question any team that plays here will want to figure out.
Company Wants To Abandon Rail Line
Tulare County - Company Wants To Abandon Rail Line San Joaquin Valley Rail wants to abandon the rail line that runs Exeter to the south through Lindsay, Porterville and Terra Bella and down to Kern County - a move that would leave the eastside of Tulare County without rail service.
The short line's spokesperson, Dick Skolfield, says the company needs to greatly increase shipments to make the line's maintenance costs pay off. The rail line owner, State's Rail, had a meeting with shippers a few weeks ago and then again this week to see if something can be worked out.
But Lindsay city manager Bill Drennen says shippers along the line say they aren't getting the service they need in order to increase the shipments.
Shippers like NDS in Lindsay get car loads of plastic material for their manufacturing process shipped to them each month - shipments that otherwise would have to come by truck, says Drennen. "It takes five trucks and trailers to make up one train car load," says Drennen. "Look at what that does to the highways and air pollution."
Shippers along the line historically have been the big citrus industry and companies like Hit Products, Harvest Containers and Vita Pak. Now the group has got Congressman Thomas' office involved as well.
In order for the rail line to abandon the line they must file with PUC - a move they did some years ago when one of the two lines from Lindsay, south was in fact abandoned. "They did the same thing from Visalia, north," says County Supervisor Bill Sanders, talking of the old SF line. "The rumor at the time was they did it just to make money on the rail salvage."
With cost to maintain lines at $8000 a mile, the main line from Exeter, south is over 40 miles.
To complicate the matter, the owners of the short line are apparently about to sell to the nation's largest short line operator, RailAmerica.
Cross Valley Plan
While the rail company wants to abandon the line in eastern Tulare County, they are active in the revitalization of the Cross Valley line from Visalia to Lemoore and Huron. That line got $10 million in public funds to build a heavy gauge track to increase rail shipment from Kings and western Fresno counties feeding into the major rail companies, Union Pacific and BNSF.
Although the majors will get the shipments they have not offered any money to help fund the track improvements expected to begin in December.
Lemoore city manager Steve Froberg says he "doesn't understand why the big rail lines don't see the benefit" and says he personally went last winter to UP headquarters to pitch the project to encourage the big company to kick in some bucks. About one third of the total $14.2 million is private investment, he figures.
"We have set a ground breaking from the Lemoore to Huron stretch for December 7th," says Froberg, a project that is expected to be a "poster child" for the short line rejuvenation nationwide, he believes.
Froberg says he doesn't think a sale of the company to RailAmerica will have any negative impact on the project.
At least one abandoned rail line through Tulare city is being planned for a pedestrian trail into downtown. In downtown Visalia the old rail line on Santa Fe will also be a major city focus with plans to build a new automobile bridge on the Santa Fe alignment over Highway 198 in 2005 making the street a major north-south thoroughfare through the city in the future.
Local Railroad May Be Sold
Exeter - San Joaquin Valley Railroad - a short line based in Exeter - may be sold in coming weeks as part of the sale of the chain of short lines owned by States Rail to Rail America, the nation's largest short line operator.
The San Joaquin Valley Railroad is one of eight lines owned by States Rail - a Texas based company with some 1647 miles of track.
The San Joaquin line has some 341 miles of line in the central valley and 76 employees.
Sources say a deal is only weeks away from being consummated.
Beginning in 1992 the short line began service on tracks acquired from Santa Fe and Southern Pacific - lines generally from Fresno to Bakersfield. The company's web site says they have some 240 customers.
The proliferation of some 300 short lines and regional railroads happened since the 1980s when major rail carriers were forced to divest. Now just a few operators like RailAmerica are leading the way.
RailAmerica, Inc. is the largest owner and operator of short line freight railroads in North America and a leading owner and operator of regional freight railroads in Australia and Chile. RailAmerica owns, leases, or operates a diversified portfolio of 39 railroads with approximately 11,000 miles of track located in the United States, Australia, Canada, Chile and Argentina. Sales for 2000 for the company were $358 million.
The above stories are the property of The Valley Voice Newspaper and may not be reprinted without explicit permission in writing from the publisher.
September 19, 2001
