Committee Ruling Re: Eligibility for Expedited Review
[California Energy Commission Letterhead]


Energy Resources
Conservation and Development Commission

In the Matter of:                   )      Docket No. 01-AFC-12
Application for Certification       )      APPLICATION COMPLETE
FACILITY (LOS ESTEROS)              )      SEPTEMBER 25, 2001





This ruling requires Staff and Applicant to file written responses on October 29, 2001, to the eligibility questions raised by this proposed project under the fourmonth expedited process set forth in Public Resources Code section 25552.1

Section 25552 contemplates implicitly the timely provision of necessary information to the Committee to allow for an informed ruling on the merits of continuing the project in the expedited process. Because that information to date has not been provided, the Committee cannot make an informed ruling at this time.

Therefore, the Committee will receive evidence on the statutory eligibility questions under section 25552, and other related matters as set forth herein, in addition to those matters that are regularly discussed at the Informational Hearing and Site Visit, which has been previously noticed for November 5, 2001.


Public Resources Code section 25552 specifies that within 25 days after acceptance of an Application for Certification (AFC), the Energy Commission or a Committee of the Energy Commission must determine whether the AFC qualifies for an expedited decision. (Pub. Res. Code, 25552(b)(2).) The Energy Commission accepted Applicant's AFC on September 25, 2001. Therefore, the twenty-fifth day is Saturday, October 20, 2001, which makes the preceding Friday, October 19, the operative day for our decision under the 25-day rule.

On September 27, 2001, this Committee issued its Preliminary Committee Schedule requiring that Staff provide its recommendation under the 25-day provision by October 10, 2001; Applicant was to file its response six days later, on October 16, 2001.

As of this writing, Staff has not filed any recommendation. Without a recommendation from Staff, Applicant had no basis to file a response. Unfortunately, this leaves the Committee without a factual basis upon which to make an informed ruling on whether the proposed project qualifies for the expedited process set forth in section 25552.


Qualification and licensure for the four-month process contemplated by section 25552 requires an AFC to demonstrate that the simple cycle, thermal powerplant and related facilities will:2

  1. not be a major stationary source or a modification to a major stationary source under the federal Clean Air Act;
  2. be equipped with best available control technology (BACT);
  3. not have a significant adverse effect on the electrical system as a result of construction or operation;
  4. provide a contract with a general contractor for the provisions of skilled labor to construct, operate and maintain the facility;
  5. not have a significant adverse effect on the environment as a result of construction or operation;
  6. assure protection of public health and safety;
  7. comply with all applicable federal, state, and local laws, ordinances, and standards (LORS);
  8. provide a reasonable demonstration that the project will be in service before December 31, 2002;
  9. provides for a binding and enforceable agreement with the Energy Commission that demonstrates either

    1. that the project will cease to operate, and its permit will terminate within three years, or
    2. that within a period of three years, it will be recertified, modified, removed or replaced, with a cogeneration or combined-cycle thermal powerplant that (1) uses (BACT), (2) obtains necessary offsets according to the stated ratio (and consistent with federal law and regulation) or, where offsets are unavailable, pay an air emissions mitigation fee to the air pollution control district or air quality management district based upon actual emissions, for expenditure by the district under Section 44275 of the Health and Safety Code, to mitigate the emissions from the plant, and, (3) complies with all LORS.

BACT, offsets, and LORS compliance will be gauged according to standards applicable at the time of construction. (Pub. Res. Code, 25552 (d) & (e), and citing Pub. Res. Code 25523.)

We note that section 25552 is flexible in its application to the extent that it expressly provides that the process may be extended beyond four months to

"any later time mutually agreed upon by the commission and the applicant, provided that the thermal powerplant and related facilities remain likely to be in service on or before December 31, 2002." (Pub. Res. Code 25552 (c).

In addition, we note that under the Governor's authority, the above qualifications under section 25552 may be waived or suspended "to the extent that they would prevent, hinder, or delay the prompt mitigation of the effects of the emergency." (Executive Order D-26-01.)

To date, the Energy Commission staff publicly has announced that it will recommend waiver of one or more restrictions on a case-by-case basis for projects such as Los Esteros that have been found to be data adequate before December 31, 2001. Should an issue surrounding the waiver of one or more of section 25552's provisions arise, that issue will also be addressed at the Informational Hearing following the Site Visit on November 5.


We believe that project eligibility for an expedited decision turns on whether Applicant is likely to succeed in meeting all of the above requirements as set forth, either independently or cumulatively, in Public Resources Code sections 25552 (d) and (e). Unfortunately, due to Staff's failure to provide a prompt recommendation, the Committee is left with less than a full airing of the issues before it. Accordingly, the Committee will publicly address the foregoing qualification issues at the Informational Hearing after the Site Visit on November 5, 2001.

For Applicant, we provide the following caveats: it must provide timely and complete data responses, including responses to Cal-ISO's recommendations, to allow Staff sufficient time to complete its analyses. For example, we note that Applicant in a filing earlier this week notified the Committee of a need for additional time to respond to Staff's data requests. Timely provision of data responses, material agency reviews, and the Final Determination of Compliance is a necessity if this proposed project is to be completed under the expedited process. Any delays in submitting requested information will result in a commensurate day-for-day slip in the schedule.

In addition, we note that this proceeding cannot be concluded until Applicant submits a Final Determination of Compliance (FDOC) from the Air District. Applicant shall provide evidence of all other necessary agency reviews at the Committee's evidentiary hearings, if feasible, but no later than the Energy Commission hearing on the Presiding Member's Proposed Decision. The parties shall be aware that any evidence to be presented at the hearings must be identified in the prehearing conference statements and filed in accordance with the evidentiary hearing notice.

Finally, any schedule for the expedited review process will be issued following the public Informational Hearing and Site Visit on November 5, 2001.


Applicant's request for an expedited decision on the AFC pursuant to Public Resources Code section 25552 will be reviewed and discussed at the Informational Hearing and Site Visit scheduled for November 5, 2001.

Applicant and Staff shall address the eligibility matters set forth in Public Resources Code section 25552, and the matters set forth in this Ruling by written responses to be filed with the Energy Commission's Docket Unit no later than 5 p.m. on October 29, 2001

1Unless otherwise stated, all statutory references are to the Public Resources Code.

2For purposes of our discussion, the thermal power plant and related facilities may refer to the Applicant or the project depending on the context. We also note that the full Commission waived several of the below conditions at its Business Meeting on October 17, 2001. Specifically, the stationary source and the three-year conversion rules have been waived. Accordingly, the parties need not address these two restrictions.


Dated October 19, 2001 at Sacramento, California




Chairman and Presiding Member
Los Esteros AFC Committee

Commissioner and Associate Member
Los Esteros AFC Committee

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