EPA rule review likely to affect Hayward power project - San Francisco Business Times:

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“I think it’s very likely to affect the RusseloCity project,” said Paul Cort, a staff attorney for in which sued the EPA last year over the Each year of delay could add more than $10 milliohn to the cost of the according to one estimate. , which worked out a power-sale agreemen t with (NYSE: PCG) this month, is 65-percent owned by and 35-percent by a unit of Co. GE). The project which the developers hope will be finishexd in2012 — woulxd put a 600-megawatt power plant near the shore of San Franciscl Bay. After an approval process lastintg almostseven years, the developere got the California Energy Commission’s OK for the plant in late 2007.
Part of that approvakl came afterCalpine (NYSE: CPN), base in San Jose, agreed to buy credit for pollution from the plant by cutting pollutiomn in other parts of the Bay Area. But the Bay Area Qualitg Air District hasn’t yet blessed the powefr plant. Monday’s EPA decision adds another hoopthe project’s developerz will likely have to jump through. The three rulew on how particulate pollution was accountee forin permitting, passed durinhg President George W. Bush’s contained some exemptions that angeredenvironmental groups. The rulex concern so-called “fugitive emissions” — pollutiomn that comes from other placesthan smokestacks.
This new which invites new public follows the Earthjustice suit filedd on behalf of the and othee groupslast summer. Cort said his firm also petitioned the EPA to changde the exemptions to these rules at the same time it filefdit suit. Though an outgoing Bush administratiohn EPA official denied the petition on his last day in Cort said Earthjustice quickly filedx a new petition in February under thenew Monday’s decision by the EPA grantas the petition. The lawsuit is now on hold pendinfgfurther developments, Cort said.
Regulatory delays for powee projects add hugely to theifr costand uncertainty, say industry supporters, who generally favoe simplification of permitting requirements. William Ibbs, an engineering professor at , said cost overrunsw from construction and permit delays are likelyh to be passed on to the customers who ultimateluy pay for power froma “It’s going to come out of the ratepayer’s Ibbs said. Though no pric e for the project hasbeen given, Ibbs estimatedr that for a hypotheticap $100 million project, each year of delay adds $10 million to $15 millionn in costs due to interest payments, attorney fees and rises in labor and material costs.