On Monday, AES Corp. finalized the sale of its 51 acre gas power plant in Redondo Beach to real estate developer Leo Pustilnikov for an undisclosed amount of money.
The deal would open up the 51 acres, located next to the waterfront, for a number of mixed-use projects. The deal also stipulates that the plant could no longer operate after 2023, when redevelopment would begin.
The city, led by Mayor Bill Brand, has wanted to remove the power plant for decades now, as the city is worried about the environmental impact of the plant as well as leaving prime land by the ocean being used for power usage.
“It emits tons of fine particulate emissions, volatile organic compounds, nitrogen oxides and greenhouse gases every year it operates,” Brand said in an interview earlier this month. “There are 21,000 people living within one mile of the power plant.”
After the announcement, Redondo Beach joined a growing list of cities in California that have decided to end non-renewable energy plants. Among the other notable non-renewable plants being shut down are gas and nuclear plants in Los Angeles County and San Luis Obispo County respectively. Los Angeles is currently in the process of closing 3 water-cooled gas plants while California’s last nuclear power plant, Diablo Canyon in San Luis Obispo County, is scheduled to close soon as well.
However, despite California Water Resources Control Board approval, the deal between AES and Pustilnikov has also brought a possible hitch to Redondo Beach, which wanted the plant closed this year. As part of the deal, Pustilnikov has to preserve 25 acres as green, wetlands space if the plant deal is extended for 3 years. If it’s shorter, the amount of preserved space is reduced. A two year extension only gives 12 acres, while a one year extension gives 4 acres.
While it was originally planned to close this year, a last minute extension by the California Public Utilities Commission, out of fear of summer electricity shortages, granted an extension. And both AES and Pustilnikov are on board keeping it open as AES will still get to have revenue coming in, and Pustilnikov would be allowed to get more money from AES for environmental cleanup projects. A three year extension would have AES giving Pustilnikov $14 million, while 2 and 3 year plans would only give $6.5 million and $1.5 million respectively.
“It aligns the interests of AES and myself and the city,” explained Pustilnikov in a statement. “Where else could you get 51 acres on the water?”
In Redondo Beach it has essentially boiled down for a plan of time, as the city wants the plant gone ASAP, but the state, developer, and plant owner wanting to keep it open for a few years longer for energy and environmental cleanup reasons.
“It’s an interesting case,” said environmental lawyer Shelby Holliday. “Every side wants to give something good back to the city, whether it be electric power, wetlands, a development, or a better waterfront area.”
“The city doesn’t want to lose because they really want that plant gone because it is doing damage to the environment and cutting into local taxes. The plant owner wants to stay for that extra money. The incoming owner wants to develop and get the full amount for environmental help. And the state has taken both sides. They want the extra power and time so that new wind or solar plants can be built to pick up any lost power there, but they also acknowledged the environmental danger and only granted a minimal plant extension.”
“Eventually the wetlands will be restored there, and a new business district will come up around the area too. Sad thing is, there is no group who is completely right or completely wrong. But somebody has to lose. And right now it doesn’t seem to be favoring the city.”
Despite the odds, Mayor Brand and the city of Redondo Beach have continued to fight the extension.
“We’ve been fighting to close this plant for over 10 years,” said Mayor Brand this month in a statement. “We’re going to continue our opposition to any extension.”
Current plans for the revitalized area include 24 acres of wetlands, a hotel, retail and commercial offices, and power plant buildings repurposed for commercial use.
The city is expected to fight any extension of the plant while AES and Pustilnikov are still planning on a 2023 closure date.
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