REPRINTED WITH PERMISSION OF THE WALL STREET JOURNAL.

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September 29, 1999

Wall Street Journal


Power-Plant Plan Assailed Over Water Use ---- By Marc
Lifsher

VICTORVILLE -- For proof that the Cold War is over, visit
the former George Air Force Base here; U.S. fighter jets are
gone, the privatized facility has been renamed the Southern
California Logistics Airport and, last week, a Russian-made
Antonov 124 arrived to pick up a commercial cargo of
communications towers.

The start of major air-freight operations by a Swiss-based
forwarder, say developers Stirling Airports International
LLC of Laguna Hills, is another step to drawing a range of
new enterprises to this 5,000-acre would-be transportation
hub and industrial park among the Joshua trees and creosote
scrub of a parched San Bernardino County plateau, about 70
miles northeast of Los Angeles.

But standing in the way is a conflict that has already
outlasted the epic struggle between East and West:
California's water wars. The latest outbreak concerns what
developers say is an essential feature to draw business
here: the promise of cheap electricity produced by the High
Desert Power Project being planned for 30 acres of the old
base by Inland Energy Inc. of Newport Beach and
Constellation Power Inc., Baltimore.

The proposed $350 million power plant is "the biggest public
investment in the history of the Victor Valley," boasts
Inland Energy President William "Buck" Johns. And it's
"refreshing to see how receptive the high desert [community]
is."

Indeed, just about all the business boosters and economic
powers that be in the area are thrilled about the
high-efficiency power plant designed to generate 700
megawatts to sell into the recently deregulated California
grid.

"This particular facility is very attractive," says
Victorville Mayor Terry Caldwell. "It generates taxes [of
$350 million a year]. It gives us a competitive advantage to
market the base and develop George in a way that creates
jobs."

So what's the problem? Simple, says local landowner Gary
Ledford: water.

Mr. Ledford and a small group of allies are loudly opposing
the project because of the amount of water the plant
promises to use to cool its turbines. The plant, he
contends, will need far more water than can be supplied
reliably from its intended sources, the State Water
Project's aqueduct and the region's already severely
depleted underground basin. (The plant, in theory, would buy
all of its water from the state system -- but if service is
interrupted it would be allowed to draw on water that it has
pumped into the aquifer as a contingency.)

Moreover, he says, there's the matter of recycling.
According to the basin's conservation plan, an estimated
half of most users' water should wind up back in the
aquifer, either as irrigation runoff, underground
percolation or treated waste water. The power plant,
however, would return no water to the basin because all of
its water is needed for cooling and is evaporated off.

Mr. Ledford has two alternatives to propose. The first: a
technique called "dry cooling" that employs powerful blowers
instead of water. The technique is more expensive and isn't
quite as efficient, he admits, but it won't contribute to
the chronic "overdraft" that is sucking the Victor Valley's
underground water supply faster than it can be naturally
recharged.

His second idea: Make the plant buy twice as much water as
it plans to -- 8,000 acre feet a year -- so that half of it
can be used to stock the aquifer.

The power plant "should be a statewide issue," Mr. Ledford
says. "It's a bad precedent to use state water in an arid
climate for cooling."

Some leaders of California environmental groups, though
they're not familiar with the project, agree that building a
water-cooled power plant in the Mojave doesn't seem logical.
"Evaporating 4,000 acre feet of water from the delta sounds
like a bad idea to me," says Jerry Meral of the
Sacramento-based Planning and Conservation League. "It's a
waste of water and shouldn't be done."

High Desert officials say there's no need for concern. They
say they have developed a mitigation program that would
allow them to purchase an additional 13,000 acre feet of
state water over three years. That water would then be
injected into the ground and "banked" for later use, should
aqueduct water deliveries be interrupted.

The combination of underground banking and state water
surface deliveries should ensure that "we've got plenty of
water," says Mr. Johns, the High Desert president. Moreover,
he explains the power plant has been scrupulously designed
to avoid damage to the Mojave River groundwater basin or the
local environment.

"We're not going to pump a [net] gallon out of the aquifer,"
he says. "If we run out of water, we'll turn a switch and
shut [the plant] down."

And both Mayor Caldwell and power plant President Johns
contend that Mr. Ledford is antigrowth -- and suspect that
his protests are a smoke screen to cover his desire to
profit from selling his own excess water to cool the plant.
(Mr. Ledford strongly denies both charges, and says that if
he did sell any water rights it wouldn't be to the plant. He
also argues that the "banking" plan might not work and
questions whether all the banked water could easily be
retrieved from the aquifer.)

Even as Mr. Ledford and his allies protest the plant,
however, larger disputes are playing out that may alter the
shape of the fight.

First, board members of the Mojave Water Agency, which
contracts with the state Department of Water Resources to
bring aqueduct water into the region, are deadlocked in a
dispute over exactly how much water they should get from the
state to resell to the water district and the plant.

Then there are the fights over the plant's two potential
sources of water. The state Supreme Court currently is
reviewing a sweeping plan imposed on all water users by the
San Bernardino County Superior Court. The plan, created in
1996, was intended to help restock the aquifer, which hasn't
been able to replenish itself to keep pace with development
-- and has only half as much water as it did 20 years ago,
according to some estimates. Farmers opposed the plan,
saying it restricted their historic water rights; after the
state Court of Appeal in San Bernardino sided with them, the
Mojave Water Agency and others then petitioned the state
Supreme Court for review.

Meanwhile, an amalgam of 16 state and federal agencies
called Cal-Fed is wrangling with an array of urban users,
farmers and environmentalists over how to divvy up the
scarce waters of the environmentally sensitive, intricate
delta of the Sacramento and San Joaquin rivers -- the very
waters the plant wants to use.

For his part, Mr. Ledford seems a strange candidate to be
fighting what most civic leaders call progress. For the past
70 years, Mr. Ledford's family has been ranching and farming
1,400 acres along the Mojave River and has used its
bountiful, historic water rights to transform a chunk of
that land into a top-end retirement community with a verdant
golf course. And he applauds development of the Southern
California Logistics Airport, welcoming its new charter
service and saying he hopes the facility "works
wonderfully."

Mr. Ledford insists it's only the power plant and its draw
on water supplies that irk him. The plant's cooling system
will take at least 4,000 acre feet of water a year (enough
to satisfy the needs of 8,000 average households) --
without, he argues, returning anything. Evaporating that
much state water isn't just bad environmentally, he says --
it may be illegal.

Indeed, a formal policy, adopted by the state Water
Resources Control Board in 1975, seems to buttress that
assertion. The policy discourages the use of fresh water for
inland power-plant cooling unless it can be shown that other
methods "would be environmentally undesirable or
economically unsound." Additionally, the board policy, which
carries the force of regulatory law, restates strictures in
the California Constitution which prohibit the "waste or
unreasonable use" of state waters.

Applying the policy, which was originally developed as a
reaction to a failed effort to build a nuclear power plant
near Wasco in Kern County, would be up to the Water
Resources Control Board. That would happen, says staff
attorney Andy Sawyer, only if the board receives a complaint
about High Desert or opts on its own to investigate alleged
wasteful uses of state waters. However, to date, the board
has not become involved in the High Desert controversy, Mr.
Sawyer says.

For the time being, he says, the High Desert issue will
remain the purview of the state Energy Commission and local
agencies, such as the Victor Valley Water District, whose
directors are mulling terms of a water-supply contract for
the plant.

Mr. Ledford's dry-cooling plan has precedent. Industry
experts say the technology is viable, and in fact will be
used in new plants in Sutter and San Diego counties. And Mr.
Ledford has a few allies, such as William R. McDaniel, the
only member of the Victor Valley Water District who has
voted against the High Desert project. The 27 jobs created
by High Desert aren't enough to offset the increased demand
for water, says Mr. McDaniel, who is a retired power-plant
heavy-equipment supervisor. "It doesn't make sense to give
away all that 4,000 acre feet," he concludes.

Others are pushing for Mr. Ledford's plan to have the power
plant buy twice as much water as it needs. "Two-for-one is
the right thing to do," adds Bob Almond, a Mojave Water
Agency board member. "I have nothing against the [power
plant], but we're mandated by the citizens to preserve our
water and add water to the basin whenever we can."

But requiring the plant to buy even more water seems
illogical, says Elden Hughes, chairman of the Sierra Club's
California-Nevada desert committee. "An aquifer in an
overdraft has its own set of problems, and power plants
there should not be using water at all," he says.

For now, High Desert awaits a license from the state Energy
Commission. And Mr. Ledford says he'll pound away on legal
briefs during late-night sessions at the computer. "There'll
be litigation," he vows. "Lots of it."


END


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>
>From: "Lifsher, Marc" Marc.Lifsher@wsj.com
>To: "'Gary Ledford'" jessranch@ibm.net
>Subject: RE: Reprint Right
>Date: Tue, 5 Oct 1999 11:33:50 -0400
>X-Mailer: Internet Mail Service (5.5.2448.0)
>
>Hi Gary, thanks for the note. I spoke to one of the attorneys 
>at Dow Jones & Co., Inc., publishers of The Wall Street Journal, 
>and she said copywrite isn't a problem. She said for you to contact 
>her if you need that stated in writing. Her name is Nancy L. 
>Gilliespie and she can be reached at 212.416.4252
>
>