On Nov. 6, the Pittsburg City Council signed off on a deal that will cost California ratepayers $300 million over the next generation and give San Francisco a dependable and extra source of electricity.
The deal is to build an approximately 57-mile-long, high-voltage electric cable between San Francisco and Pittsburg, all but about one mile of it underground or under the San Francisco Bay.
Estimates suggest that the cable will help San Francisco provide for its electricity needs through 2012, when a new power plant in that region will need to be built, a Pittsburg staff report states. That means that over the next five years, Pittsburg stands to make at least $6 million or more in fees for providing a cable to deliver its surplus electricity to San Francisco.
So how does Pittsburg end up playing electricity broker to San Francisco? Among the Pittsburg City Council's many alter egos is the Pittsburg Power Co., which is a licensed municipal utility.
Pittsburg was approached in 2003 by Babcock and Brown, an Australian utility investment corporation, about building the cable based on the city's previous experience with Island Energy's ownership of the electric and gas distribution system on Mare Island, developing the Los Medanos Energy Center and connecting a transmission line connecting the Delta Energy Center to Pacific Gas and Electric Co.
A staff report states that converter facilities must be built at both ends. Pittsburg's converter site would be located on the north side of West 10th Street, adjacent to the Mirant Pittsburg Power Plant. A 64-foot-high transformer building would occupy about 23,000 square feet of the site. Outdoor air-cooled radiators, transformers, electrical switching gear and other equipment would occupy the balance of the 5.4-acre site. Construction will take approximately 36 months to complete.
For all this, San Francisco pays Pittsburg a $5.5 million in-lieu fee, taxes or an in-lieu fee on the converter station, a franchise fee and an annual $500,000 administration fee for the life of the cable.
Pittsburg would not be shortchang- ing itself in the electricity supply chain. It will get use of a 50-megawatt transformer to serve retail customers.
Also at that Nov. 6 council meeting, the city inched another step closer to developing a port, when it authorized a $55,000 feasibility study.
The study will evaluate mar-ket demand and risk analysis, ease of implementation, physical site characteristics and other factors.