Jefferson Heights Association

CPS Settlement

CPS Energy completes plant's deal with environmentalists

CPS Coal Plant Building Permit Updates


CPS Energy completes plant's deal with environmentalists

Higher conservation and renewable energy goals are required.


December 5, 2005

Contacts: Mr. Bob McCullough, APR, CPS Energy (210) 353-2344

Mr. Tom "Smitty" Smith, Public Citizen (512) 477-1155

Ms. Karen Hadden
(512) 797-8481

Mr. Jim Marston, Environmental Defense
(512) 478-5161

Jefferson Heights Association
(210) 227-0821

CPS Energy* and a number of organizations and individuals announced today a settlement in principle of their disputes regarding the new CPS Energy Spruce 2 power plant.

The plant will be a 750-megawatt addition to CPS Energy's Calaveras Lake fleet of coal-fired plants just southeast of San Antonio. The plant had drawn opposition from some national environmental advocates because of its projected greenhouse-gas emissions and from some local citizens and groups because of other projected emissions, principally mercury.

The settlement includes provisions for improved public access to environmental data and increased guarantees regarding mercury emissions. Under the settlement, parts of which require CPS Energy Board of Trustees approval before becoming final, CPS Energy has agreed to make enhancements to its energy-conservation and renewable-energy programs and to pay increased attention to carbon dioxide (CO2) emissions associated with future coal plants.

It also has committed to fund an engineering study on the use of Integrated Gasification Combined Cycle (IGCC) technology with combinations of fuels, such as lignite and petroleum coke, that are readily available in Texas. IGCC is an advanced power generation technology. The study has the potential to further address greenhouse gas emissions by hastening adoption in Texas of this technology.

The environmental organizations and local citizens agreed under the settlement to drop their opposition to the plant's permitting. Tom "Smitty" Smith, director of Public Citizen, Texas, of Austin, explained, "This is not a deal we could have struck with many utilities. The truth is, CPS Energy has undertaken a number of good, clean-air projects in recent years. Those projects, combined with the new commitments in this settlement, have moved CPS Energy to the front of the utility pack in Texas in terms of dealing with the air-quality issues of power generation.

"We feel that CPS Energy's decision to increase its renewable and energy-efficiency programs means CPS Energy will do its share to lessen the impact of greenhouse gases on the earth's atmosphere, and this is a real step forward. We feel that the study CPS Energy has committed to perform has the potential to further address greenhouse-gas emissions by hastening adoption in Texas of IGCC technology."

Karen Hadden, executive director of the Sustainable Energy and Economic Development (SEED) Coalition in Austin, stated that "CPS Energy's commitment to continuous-emission monitors and to adding specific mercury controls, if needed, is a step forward."

Charles English, president of the Jefferson Heights Neighborhood Association, said that gains have been made. "The health study will focus on Southeast San Antonio, and we will have a seat on the independent advisory committee," he said. "Our community has concerns about particulates, and the study will look into this issue.

"Other gains include posting of pollution-monitoring data online. Additional outreach for weatherization opportunities will occur, and CPS Energy is expected to double its energy-efficiency programs. Tree planting in Jefferson Heights will be completed by 2007, and CPS Energy will support health fairs in our community."

Bob Temple, director of regulatory affairs for CPS Energy, said, "Like any settlement, this is a compromise. It doesn't give either party everything they sought. Significantly, however, for CPS Energy's customers, it gives us the certainty we sought in getting the permit issued for this much-needed power plant so we can maintain the energy mix that allows CPS Energy to charge some of the lowest rates for electricity in Texas and across the nation.

"The energy-conservation and renewable-energy commitments we made are extensions of CPS Energy's existing goals in those areas. The health study will provide the community with the assurance it needs about the safe operation of CPS Energy facilities. The true value of the IGCC study won't be known until it has been completed, but that technology is one CPS Energy has been eyeing for a while now, so the study holds promise for us."

HI Everyone - Here's the news... the CPS contested case began today,
with settlement talks from the very start. We'd been involved with
negotiations for some time, but didn't know if we'd settle or move
forward with the case and cross examination of witnesses today. We
didn't defeat the plant, but we won a great deal and are proud of the
gains we've made.

Attorney David Frederick represented Public Citizen and Environmental
Defense, Enrique Valdivia represented Jefferson Heights Neighborhood
Association and I represented SEED Coalition pro se, and was a
representative for most of the aligned parties in this case, including
Smart Growth San Antonio, Geert Aerts, Dr. Vincent Fonseca, Patricia
Lenzy, Sarah Bryant and Olga English. Charles English was present and
helped negotiate. Sarah Bryant (age 91) made the trip too.

The good news is that all of the organizing and speaking out for
cleaner energy and better air quality paid off.

Spruce 2, the proposed 750 MW plant will be built, but we gained a
great deal in permit pollution reductions through our work. For
example, annual mercury emissions went from 580 down to 140 pounds.
Today we made further gains in the settlement of the case, which

*An IGCC study which will help push other utilities toward cleaner
plants throughout the state. (6 other coal plants have applied for

* An increase in renewable energy. From 10% by 2015 to 15% by 2020,
which will add another 280 MW to the current goal. (CPS board is
expected to approve this on Dec. 19th at their 2:30 PM meeting.

* An increase in their energy efficiency program - which will roughly
double the energy savings, with a new goal of 65 MW reduced. Renewable
energy and energy efficiency measures will help offset their global
warming gas emissions.

*Recognition that carbon capture is important and will be planned for
economically and in design for any future coal plants.

*A commitment to complete the 3 year health study underway, and to
examine the impacts on Southeast San Antonio in particular, and we won
an invitation for
Charles English and Dr. Vincent Fonseca to sit on the advisory board
for the study.

* Posting of Continuous monitoring emissions data (all pollutants) on
the CPS web site.

* A commitment to using continuous emission monitors for mercury (as
opposed to occasional stack testing) and a commitment to install
specific mercury controls if the plant doesn't meet it's mercury cap
(140 lbs) for the first year of operation. This is important, because
in the past when permit requirements weren't met CPS went to TCEQ and
got the permit standards relaxed. They will not be able to do that for
this permit.

* Jefferson Heights Neighborhood Association will get support for
health fairs in the community, additional outreach regarding
weatherization programs, a commitment to tree planting to be completed
by 2007 and the health study commitments mentioned earlier.

We're proud of the improvements and reductions that we've been able to
make together. The permit requires start up and shut down to use
natural gas, which will prevent some of the problems seen in the past.
The opacity limit is lower than for their other plants - at 10%. This
permit requirement came as a result of our documentation of exceedances
and media work pointing out that there were no consequences. An
internal investigation occurred at TCEQ. Community pressure and the
spotlight on this important health concern led to significant

Many thanks and congratulations to any and all of you who have been
part of this work!

Karen Hadden
Executive Director
Sustainable Energy and Economic Development (SEED) Coalition
1801 Westlake Dr. #209
Austin, Texas 78746
fax: 512-479-7645 and

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