Tonight I was able to read the document mentioned by Walter at CARB regarding power plant siting and found some interesting passages describing issues with merchant plants. From http://www.arb.ca.gov/powerpl/ppr62199.pdf:

First, Calpine was able to skip the NOI phase because the proposed Metcalf Energy Center is considered a merchant plant. >From the document:

"The NOI phase is traditionally used to determine the need for the proposed power plant, site acceptability and suitability, and alternatives to a proposed project. An affirmative NOI decision represents an approval of the proposal in concept. The consideration of a specific site, technology and equipment occurs in the AFC phase. With the deregulation of the electric utility industry, applicants are seeking, and receiving, exemptions from the NOI phase. On May 12, 1999, the CEC announced that it has amended its policies and procedures to allow any proponent for a natural gas-fired merchant power plant project to file an AFC without applying for an NOI exemption."

The document then goes on to describe the problems with emissions from merchant plants:

"Due to deregulation of the electric utility industry in California, many new power plants will be operating under merchant mode. Recent applications for power plant certifications indicate these plants will operate under varying loads with numerous startups and shutdowns to handle changing electricity demands. Gas turbines generally have higher emissions during periods of startup and shutdown. In fact, startup and shutdown emission may substantially contribute to the total project emissions. Therefore, the BACT decision should consider control of emissions during such periods of operation.

Gas turbines are designed to run online near rated capacity. Optimal combustion in a gas turbine tends to occur at full load. In addition, emission control systems, especially those dependent on feedback systems, operate best at steady-state. In this post deregulation period, gas turbines power plant may spend a significant amount of time in other modes of operation. Derated operation can be associated with less efficient combustion. Startup, shutdown, and load changes will cause variations of flue gas flows and temperature. Periods of disequilibrium may be frequent and long. For example, cold startups for combined cycle units may require up to 4 hours.

To the extent possible, emissions should be controlled where possible, including during startups and shutdowns. Emission control systems should operate when circumstances allow and use of bypass stacks should be minimized. For example, if flue gas temperatures are within the effective temperature window of the catalytic control system, emission control systems should be in service, and emissions controlled to the maximum extent allowed by circumstances. Also, startup and shutdown should be minimized with permit conditions limiting their duration. Definitions of startup and shutdown should be well delineated with precise definitions that include markers that clearly distinguish the onset and conclusion of such events. Districts may want to limit startup and shutdown emissions where it is possible to enforce such limits."

Sincerely,

Steven Nelson