Air Pollution: Estimated Emissions from Two New Mexicali Power	 
Plants Are Low, but Health Impacts Are Unknown (12-AUG-05,	 
GAO-05-823).							 
                                                                 
Power plants emit pollutants that have been linked to various	 
negative health effects. In 2003, two new power plants, owned by 
Sempra Energy and Intergen, began operations 3 miles south of the
U.S.-Mexico border near Imperial County, California. The county  
does not meet some federal and state air quality standards and	 
may be further impacted by the emissions from these plants.	 
Although these plants export most of the electricity they produce
to the United States, they are not currently required to meet any
U.S. or California emissions standards. GAO was asked to	 
determine (1) how emissions from the two plants compare with	 
emissions from recently permitted plants in California and	 
emissions from sources in Imperial County, and what emissions	 
standards they would be subject to if they were located in	 
Imperial County; (2) the health impacts of emissions from the	 
plants on Imperial County residents; and (3) options available to
U.S. policymakers to ensure that emissions from these plants do  
not adversely affect the health of Imperial County residents. In 
commenting on a draft of this report, DOE disagreed with our	 
characterization of the limitations of their assessment of the	 
health impact of pollution from the Sempra and Intergen power	 
plants. We believe we have portrayed the limitations of this	 
assessment accurately.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-823 					        
    ACCNO:   A32879						        
  TITLE:     Air Pollution: Estimated Emissions from Two New Mexicali 
Power Plants Are Low, but Health Impacts Are Unknown		 
     DATE:   08/12/2005 
  SUBJECT:   Air pollution					 
	     Air pollution control				 
	     Comparative analysis				 
	     Electric powerplants				 
	     Environmental monitoring				 
	     Federal regulations				 
	     Health hazards					 
	     International cooperation				 
	     International relations				 
	     Standards						 
	     California 					 
	     Mexicali (Mexico)					 

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GAO-05-823

United States Government Accountability Office

GAO

                       Report to Congressional Requesters

August 2005

AIR POLLUTION

Estimated Emissions from Two New Mexicali Power Plants Are Low, but Health
                              Impacts Are Unknown

GAO-05-823

[IMG]

August 2005

AIR POLLUTION

Estimated Emissions from Two New Mexicali Power Plants Are Low, but Health
Impacts Are Unknown

                                 What GAO Found

The estimated emissions from the Sempra and Intergen power plants near
Mexicali are comparable with similar plants recently permitted in
California and are low relative to emissions from the primary sources of
pollution in Imperial County, California, which are dust and vehicles.
However, if the plants were located in Imperial County, they would be
required to take steps to improve air quality by reducing emissions from
other pollution sources in the region, such as paving dirt roads, because
the county is not meeting certain U.S. air quality standards.

Although emissions generated from the Sempra and Intergen plants may
contribute to various adverse health impacts in Imperial County, the
extent of such impacts is unknown. The Department of Energy (DOE)
estimated that emissions from these plants may increase asthma
hospitalizations by less than one per year. However, DOE did not quantify
any other asthmarelated impacts, such as emergency room visits or
increased use of medications, which, although less severe, are likely to
occur more often. In addition, DOE did not determine whether increased
emissions would cause other respiratory or cardiovascular problems and the
impact of particulate matter on particularly susceptible populations.
Finally, the potential health impacts associated with ozone could be
greater than DOE estimated because some important data needed for modeling
were not available.

Existing laws and international agreements may not provide adequate
mechanisms to address adverse health impacts resulting from power plant
emissions. Policymakers could take some actions, such as requiring plants
that seek to export electricity to the United States to use specified
emission controls. While this action would have benefits, it would also
have costs, such as possibly reducing energy supplies available to
Southern California. Long-term policy options include the development of a
binational pollution reduction program or a trust fund to provide grants
and loans to support air quality improvement projects. However,
substantial efforts on both sides of the U.S.-Mexico border would be
required to establish the legal and management framework necessary for
such programs to be effective.

Source: GAO presentation of DOE data.

United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Emissions from the Mexicali Plants Are Comparable to New Plants

in California, but Offset Requirements Would Apply in Imperial County

Emissions Generated by the Sempra and Intergen Power Plants May Contribute
to Various Adverse Health Impacts in Imperial County, but the Extent of
Such Impacts Is Unknown

Policymakers Have Limited Options to Ensure That Emissions from the Sempra
and Intergen Power Plants Do Not Adversely Affect the Health of Residents
in Imperial County

Conclusions
Agency Comments and Our Evaluation

                                       1

                                      4 7

12

23

29 33 34

Appendix I Objectives, Scope, and Methodology

Appendix II	Comments from the Department of Energy 41 GAO Comments 44

Appendix III GAO Contact and Staff Acknowledgments

  Tables

Table 1: Key Power Plant Pollutants and Potential Health Impacts 12 Table
2: Average Emissions from the Sempra and Intergen Power Plants Based on
Third-party Testing 13

Table 3: Comparison of Estimated Sempra and Intergen Plant Emissions and
the Emission Limits of Recently Permitted Power Plants in California 14

Table 4: Summary of Annual Emission Estimates for the Sempra and Intergen
Power Plants Using Three Alternative Operating Assumptions (Tons per Year)
15

Table 5: Estimated Annual Average Emissions in 2004 for Imperial County,
California (Tons per Year) 19

Table 6: Comparison of NOX Emission Rates from the Sempra and Intergen
Plants and Power Plants in Imperial County and Baja California 20

Table 7: Potential Offsets in Imperial County, California, Identified by
the Imperial County Air Pollution Control District 22 Table 8: Imperial
County Air Quality Compared with National Standard for PM10 (1997-2003) 27

  Figures

Figure 1: Map of the Sempra and Intergen Power Plants and the Associated
Transmission Lines 8 Figure 2: Electrical Production at the Sempra and
Intergen Power Plants 10

Figure 3: Relative Emissions Contributions by Source Assuming the Sempra
and Intergen Plants Operated at Maximum Allowable Emissions and All
Emissions Reached Imperial County 18

Figure 4: Pyramid of Potential Health Impacts for Asthmatics 25

Abbreviations

BLM Bureau of Land Management
CO carbon monoxide
DOE Department of Energy
EPA Environmental Protection Agency
NAAEC North American Agreement on Environmental Cooperation
NAFTA North American Free Trade Agreement
NOX nitrogen oxides
NH3 ammonia
PM particulate matter
PPM parts per million
VOC volatile organic compounds

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

United States Government Accountability Office Washington, DC 20548

August 12, 2005

The Honorable Hilda Solis
Ranking Member
Subcommittee on Environment and Hazardous Materials
Committee on Energy and Commerce
House of Representatives

The Honorable Bob Filner
House of Representatives

In 2003, two new power plants owned by American-based corporations,
Sempra Energy and Intergen, began operations 3 miles south of the U.S.-
Mexico border near Mexicali, Mexico, and Imperial County, California.
These modern natural gas-fired plants use advanced pollution control
technologies; nevertheless, they emit some pollutants such as nitrogen
oxides and airborne particles, known as particulate matter. Some health
studies have found that even the smallest incremental increase in the
amount of particulate matter in the air corresponds with an increase in
adverse health effects.

The U.S.-Mexico border region is experiencing significant economic,
industrial, and population growth, and that growth is expected to
continue. Imperial County is one of the fastest growing counties in
California and is expected to double in population by 2025. The county
does not currently meet some federal and state air quality standards and
has one of the highest asthma prevalence rates for children ages 1 through
17 in the state. The increased demand for energy to meet the needs of the
border region could lead to the construction of additional power plants,
with the associated potential for increased air pollution and negative
impacts on public health.

In the United States, the Clean Air Act establishes the principal
framework
for federal, state, and local efforts to protect air quality. Under this
act, the
Environmental Protection Agency (EPA) establishes health-based air
standards that the states must meet.1 EPA has issued air quality standards

1The standards are known as the National Ambient Air Quality Standards.

for six primary pollutants-carbon monoxide, lead, nitrogen dioxide,2
ozone, sulfur dioxide, and two categories of particulate matter (PM2.5 and
PM10)3-that have been linked to a variety of health problems. Agencies
collect data on the levels of these pollutants to determine if air quality
is meeting the federal standards. Areas that do not meet these federal
standards are designated as "nonattainment" areas and are, as a result,
generally subject to more stringent emission control requirements.
Imperial County is currently designated as a nonattainment area for PM10
and ozone.4 New facilities being built within a nonattainment area that
are expected to generate emissions above a certain threshold may be
required to provide mitigation measures in the form of emission offsets.
These offsets are designed to improve air quality in nonattainment areas
by reducing emissions from other pollution sources in the region. They
could include, for example, providing funds to update diesel engines or to
pave dusty dirt roads.

The Sempra power plant has a single power-generating unit with the
capacity to produce a total of 650 megawatts of electricity per hour, all
of which are designated for export to the United States.5 The Intergen
facility, which has a total capacity of 1,060 megawatts, is composed of
two units: one that produces power exclusively for the United States and a
second that exports up to one-third of its power to the U.S. market.
Because the plants are located in Mexico, Mexican agencies have the
exclusive authority to regulate the permitting and construction, as well
as the emissions resulting from their operation. Mexico regulates the
emissions of several pollutants from its power plants but requires natural
gas-fired plants, such as Sempra and Intergen, to report emissions of only
nitrogen oxides. In part, because of the advanced technology and control

2Nitrogen dioxide (NO2), a common air pollutant, is one of a group of
gases collectively known as nitrogen oxides, or NOX. The term NOX is used
commonly in both the United States and Mexico to describe these gases, but
NO2 is sometimes monitored to report on the levels of all nitrogen oxide
emissions in general.

3PM2.5 and PM10, also known as fine and coarse particulate matter,
respectively, refer to the size of the airborne particles measured at the
diameter (in micrometers).

4Ozone is formed at ground level by a chemical reaction of various air
pollutants, including NOX, combined with sunlight. Ozone is a key
ingredient in urban smog.

5Independent of such factors as time of day, time of year, and
geographical location, in general, one megawatt of electricity is
sufficient to meet the needs of 750 to 1,000 households for 1 hour.

equipment these plants are using, their estimated emissions of
NOsignificantly lower than the established emission limit in Mexico.

X are

The electricity generated by these plants is transmitted into the United
States over electric transmission lines authorized by presidential permits
issued by the Department of Energy's (DOE) Office of Fossil Energy.6 These
permits are required before electric transmission facilities are
constructed, operated, maintained, or connected at the U.S.-Mexico
border.7 DOE is responsible for reviewing permit applications and
conducting an environmental evaluation as part of this review. DOE issued
a final environmental impact statement on the Sempra and Intergen
transmission lines in December 2004 that included an assessment of the
potential health impacts associated with emissions from the power plants.

In this context, you asked us to determine (1) how emissions from the
Sempra and Intergen power plants compare to emissions from recently
permitted plants in California and emissions from sources in Imperial
County, and what emissions standards the plants would be subject to if
they were located in Imperial County; (2) the health impacts of emissions
from the power plants on Imperial County residents; and (3) what options
exist for U.S. policymakers to ensure that emissions from these power
plants do not adversely affect the health of Imperial County residents.

To address these objectives, we visited the Sempra and Intergen plants
near Mexicali, Mexico; interviewed plant representatives, various federal,
state, and local air quality officials, and other key stakeholders; and
reviewed relevant documents and studies. To address how emissions from the
Sempra and Intergen power plants compare to emissions from recently
permitted plants in California, we used data from emissions tests
conducted at the plants by third-party contractors. We did this because
Mexico does not require the plants to report actual emissions of
pollutants other than nitrogen oxides. We assessed the reliability of the
data by (1) reviewing documentation of test objectives and quality control
procedures provided by the third-party contractors who conducted the
tests, (2) talking with Sempra and Intergen officials to determine the
scope and

6On April 13, 2005, the Secretary of Energy transferred the authority to
grant presidential permits to the Office of Electricity and Energy
Assurance. That office has subsequently been renamed the Office of
Electricity Delivery and Energy Reliability.

7Exec. Order No. 10485, 18 Fed. Reg. 5397 (Sept. 9, 1953) amended by Exec.
Order No. 10238, 43 Fed. Reg. 4957 (Feb. 3, 1978).

generalizability of the tests, and (3) reviewing reports of actual NOX
emissions submitted to the Mexican government to verify consistency with
the test results. We determined that the data were sufficiently reliable
for the purposes of this report. We also obtained the permissible emission
limits for comparable plants in California. Comparable plants were
selected by identifying all natural gas power plants of similar size and
specifications to the Sempra and Intergen plants that were permitted in
California between 2000 and 2004. Because all California power plants are
permitted on a case-by-case basis, emissions limits may vary with each
project. Therefore, we used the entire range of emission limits for the 23
plants that were identified during our selection process. To determine how
the emissions from the Sempra and Intergen power plants compared to
emissions from sources in Imperial County, we utilized the 2004 estimated
annual average emissions inventory for the county developed by the
California Air Resources Board, among other things. To address what
emissions standards the plants would be subject to if they were located in
Imperial County, we reviewed federal and California regulations for new
power plants, interviewed EPA, state, and Imperial County air quality
officials, and reviewed the emission limits and selected permitting
conditions for power plants located in California. To identify the
potential health impacts from plant emissions, we reviewed the health
assessment methodology DOE used in its environmental impact statement,
reviewed relevant studies, and met with health experts. To determine
available policy options, we reviewed the Clean Air Act; environmental and
trade agreements among the United States, Mexico, and Canada; and academic
research. See appendix I for additional details on our scope and
methodology. We conducted our work between September 2004 and August 2005
in accordance with generally accepted government auditing standards.

The emissions from the Sempra and Intergen power plants near Mexicali are
comparable to emissions from similar plants recently permitted in
California and are low relative to emissions from the primary sources of
pollution in Imperial County-dust and vehicles. However, if the plants
were located in Imperial County, they would be required, among other
things, to offset their emissions to help improve regional air quality.
Our review of emissions test data obtained from Sempra and Intergen
indicates that estimated emissions from these plants generally fall within
a range of allowable emission limits identified from 23 plants of
comparable size and specifications permitted in California between 2000
and 2004. Although the Sempra and Intergen plants will cause some increase
in regional emissions of PM10 and nitrogen oxides (which contribute to
ozone

  Results in Brief

formation), the primary sources contributing to PM10 and ozone in Imperial
County are various forms of dust and motor vehicles. In addition, based on
the amount of energy produced per pound of NOX emissions, these plants are
cleaner than other major fuel-fired plants operating in Imperial County or
the border region of Baja California, Mexico. Nevertheless, if the plants
were located in Imperial County, they would be required to offset their
emissions because the county is a nonattainment area for PM10 and ozone.
More specifically, Imperial County air quality rules would require that
the operators of each plant provide emissions offsets of at least 1.2 tons
for every ton of emissions released by the plant that contribute to area
nonattainment status.

Emissions generated by the Sempra and Intergen power plants, like any
other source of emissions, may contribute to adverse health impacts in
Imperial County, but the full extent of such impacts is unknown. In its
December 2004 final environmental impact statement, DOE estimated an
increase in asthma hospitalizations in Imperial County of less than one
per year as the result of increased emissions from the two plants.
However, DOE did not fully assess the plants' health impact because it did
not quantify other asthma-related health impacts, such as emergency room
visits, physician visits, and increased use of asthma medication, which,
although less severe than hospitalization, are likely to occur more often,
according to health experts. Also, the DOE study did not address the
extent to which increased emissions of particulate matter would cause
other adverse health impacts, such as other respiratory or cardiovascular
conditions. In addition, DOE did not analyze the health impacts from
increased power plant emissions on particularly susceptible populations,
such as asthmatic children and low-income asthmatic adults. Imperial
County is one of the poorest counties in California and low-income
asthmatics adults are more susceptible to health problems, in part,
because they have less access to health care. Finally, EPA officials are
concerned about the accuracy of DOE's modeling of estimated ozone
increases for its final environmental impact statement because
comprehensive data on some key factors, such as temperature and relative
humidity, were not available. According to EPA officials, if the modeled
estimates of increased ozone are not correct, the impacts on air quality
from these two plants could be significant, resulting in some adverse
health impacts that were not reported by DOE.

Policymakers have limited options to ensure that emissions from the Sempra
and Intergen power plants do not adversely affect the health of residents
in Imperial County. The Sempra and Intergen plants are not subject to the
federal Clean Air Act or the California Clean Air Act and,

therefore, are not required to offset their emissions. In addition,
relevant agreements among the United States, Canada, and Mexico may not
provide adequate mechanisms to address adverse health impacts resulting
from emissions from these plants because they only require the countries
to enforce their own environmental laws, not to implement specific
pollution control requirements. Nevertheless, policymakers could take some
actions. For example, the Congress could enact legislation restricting the
importation of electricity generated by these plants if they do not meet
certain U.S. emission and offset requirements. While this action would
have benefits to air quality and health, it would also have costs, such as
possibly reducing energy supplies available to Southern California.
Similarly, DOE could modify its regulations to require permit applicants
seeking to import electricity into the United States from Mexico to employ
specified emission controls and obtain offsets. However, these two policy
options may raise trade issues under the North American Free Trade
Agreement. A third option would be to develop programs that provide
economic incentives to reduce pollution in the U.S.-Mexico border region.
Market-based programs, such as EPA's program to reduce emissions that
contribute to acid rain, have proven successful elsewhere in the United
States in reducing emissions. Finally, another potential option is the
development of a binational clean air trust fund that could provide grants
and loans to support air quality improvement projects for cities along the
U.S.-Mexican border. However, developing the legal and regulatory
framework needed to create these binational programs is likely to require
substantial time and effort.

DOE commented on a draft of this report and generally disagreed with our
characterization of the limitations of the health risk assessment done as
a part of the environmental impact statement for the Sempra and Intergen
power plants. Specifically, DOE did not agree with our assertion that it
did not analyze all of the likely asthma-related and other health impacts
of increased pollution from the power plants. However, DOE's environmental
impact statement analyzed adverse health effects only for asthma
hospitalization, which is just one in a continuum of adverse health
impacts. DOE also disagreed with our assertion that it did not analyze the
potential health impacts of pollution from the Sempra and Intergen power
plants on susceptible populations in Imperial County. Although DOE said
that its environmental impact statement included children in its asthma
hospitalization estimates, asthmatic children are not the only susceptible
population and asthma hospitalization is not the only potential health
impact. Finally, DOE did not agree that health impacts from ozone
formation may be larger than it estimated in its final environmental
impact statement because of limitations in its ozone modeling analysis.
However,

in its comments on the final environmental impact statement, EPA said that
it continues to support off-site mitigation efforts to ensure that there
is no net increase in air pollution in Imperial County because of the
ozone modeling limitations. For these reasons, we believe the report
accurately characterizes the limitations of DOE's health assessment and
have made no changes to the report in response to these comments. DOE's
specific comments and our detailed responses are presented in appendix II
of this report.

The Sempra and Intergen plants are located in close proximity to each
other near Mexicali, Mexico-an area 3 miles south of the U.S.-Mexican
border and Imperial County, California (see fig. 1). Final permitting and
construction for both of the plants and the associated transmission lines
to the United States began in 2001, and commercial operations commenced in
July 2003. Fuel for the plants is provided by a 145-mile cross-border
natural gas pipeline built by Sempra Energy, which began operating in
September 2002.

  Background

systems to reduce NOX emissions and an oxidizing catalyst system to reduce
carbon monoxide (CO) emissions.8

The Intergen plant, which consists of two natural gas-fired combined-cycle
units (collectively known as the La Rosita Power Complex), has a total
capacity of 1,060 megawatts. The first unit provides two-thirds of its 750
megawatt capacity to Mexico, with the remaining one-third available for
export to the United States. The second unit has a generating capacity of
310 megawatts, all of which is designated for export to the U.S. market.
(See fig. 2.) Originally, only the second unit was designed to include a
selective catalytic reduction system, but as of April 7, 2005, all four of
the combustion turbines within the two units have been equipped with these
systems to control NOX emissions.

8Selective catalytic reduction is a post-combustion cleaning technology
whereby NOX emissions chemically react with ammonia (NH3) to produce
ordinary nitrogen and water vapor. An oxidizing catalyst is similar in
concept to catalytic converters used in automobiles. The catalyst,
normally coated with a metal, such as platinum, is used to promote a
chemical reaction with the oxygen present to convert carbon monoxide into
carbon dioxide and water vapor.

Figure 2: Electrical Production at the Sempra and Intergen Power Plants

Source: DOE.

Although no U.S. emissions requirements apply to these plants, Sempra and
Intergen required a presidential permit to construct and connect the new
transmission lines needed at the U.S.-Mexican border to export electricity
into the United States. Because of the similarities of the proposals
submitted by the companies, DOE decided to consider them together in a
single environmental assessment, required as part of the

permitting process.9 In December 2001, DOE completed the environmental
assessment and issued a finding of no significant impact and presidential
permits for both of the proposed projects. Following these decisions,
Sempra and Intergen constructed the transmission lines and began
commercial operations. However, as a result of subsequent litigation, on
July 8, 2003, the U.S. District Court for the Southern District of
California instructed DOE to prepare a more comprehensive environmental
review, which included an assessment of the health impacts from the power
plants as part of its analysis. DOE's environmental impact statement was
issued in final form in December 2004. DOE found that the proposed power
plants presented a low potential for environmental impacts and published a
record of decision in the Federal Register on April 25, 2005, authorizing
presidential permits to be granted for both transmission lines to the
respective power plants as presently designed.

The operation of any fuel-fired power plant results in a variety of air
pollutants. However, because natural gas is a relatively clean fuel, the
primary emissions of concern from these plants are generally limited to
nitrogen oxides (which contribute to ozone formation); particulate matter;
and, in some cases, carbon monoxide. Nitrogen oxide, or NOX, is the
generic term for a group of highly reactive gases, all of which contain
nitrogen and oxygen in varying amounts. Ground level ozone, another
primary pollutant, is not emitted from the plants directly but is formed
in the presence of sunlight by a chemical reaction between NOX and various
air pollutants known as volatile organic compounds (VOC). Particulate
matter refers to dust, dirt, soot, smoke, and liquid droplets directly
emitted into the air by various sources. Secondary formation of PM can
also take place by the combination of NOX and ammonia (NH3).10 Carbon
monoxide is a colorless and odorless gas that is formed when carbon in
fuel is not burned completely. These four pollutants have been linked to a
variety of negative health effects, including, but not limited to,
aggravated asthma, reduced lung function and other respiratory illnesses,
and aggravation of heart disease, as well as premature deaths (see table
1). While emissions of sulfur dioxide are also a significant concern at
some power plants, the

9Because the proposed lines traverse land managed by the U.S. Department
of the Interior, Bureau of Land Management, they also participated in the
environmental assessment.

10For this reason, ammonia (NH3) is often included in the review of
potential impacts from power plants and is subject to emission limits as
part of the permitting process conducted in California. NH3 emissions,
typically referred to as ammonia-slip, are released from power plants as a
byproduct of selective catalytic reduction control technology.

use of natural gas at the Sempra and Intergen facilities greatly reduces
sulfur dioxide emissions compared with other fuels such as coal or oil.
For example, U.S. coal contains an average of 1.6 percent sulfur, and oil
burned at electric utility power plants ranges from 0.5 percent to 1.4
percent sulfur; comparatively, natural gas has less than 0.0005 percent
sulfur.

Table 1: Key Power Plant Pollutants and Potential Health Impacts

Pollutant Potential health impact

Nitrogen oxides  o  	Can irritate the lungs, cause bronchitis and
pneumonia, and lower resistance to respiratory infections

o  Contribute to the formation of ozone

Ozone  o  	Triggers a variety of health problems, including aggravated
asthma, even at very low levels

o  Can cause permanent lung damage after long-term exposure

o  Can contribute to premature death

Particulate matter  o  Can aggravate asthma

o  	Can cause increases in respiratory problems like coughing and
difficult or painful breathing

o  Can lead to chronic bronchitis or decreased lung function

o  Can contribute to premature death

Carbon monoxide  o  Can cause harmful health effects by reducing oxygen
delivery to

                                     o   o

the body's organs (like the heart and brain) and tissues

Can cause chest pains in those with heart disease and other cardiovascular
effects after repeated exposures

High levels can lead to vision problems, reduced ability to work or learn,
reduced manual dexterity, and difficulty performing complex tasks.

  Emissions from the Mexicali Plants Are Comparable to New Plants in California,
  but Offset Requirements Would Apply in Imperial County

Sources: EPA and the Southwest Consortium for Environmental Research and
Policy.

The emissions from the Sempra and Intergen power plants in Mexicali are
comparable to emissions from similar plants recently permitted in
California and are low relative to emissions from the primary sources of
pollution in Imperial County, which are various forms of dust and motor
vehicles. However, if the plants were located in Imperial County, they
would be required, among other things, to offset their emissions by
reducing emissions from other pollution sources in the region.

    Estimated Emissions from the Sempra and Intergen Plants Are Comparable to
    Emissions from New California Plants

Power plants in Mexico are not required to report to federal agencies in
the United States on actual emissions of key pollutants generated during
plant operations. Therefore, we believe that the best data available to
estimate emissions from the Sempra and Intergen power plants comes from
emission performance tests conducted by independent third-party
contractors hired by the power plants. The average emissions from the
Sempra and Intergen plants based on the results of the third-party testing
are presented in table 2.

Table 2: Average Emissions from the Sempra and Intergen Power Plants Based
on Third-party Testing

Sempra resultsa Intergen resultsb Unit 1 Unit 1 Unit 2

                                   Pollutant

Turbine 1

Turbine 2

Turbine 1

Turbine 2

Turbine 3

                                    Turbine

                    NOX                                               
                  (ppm)     2.33   2.08      15.33c    13.37c  2.41      3.14 
                   PM10                                               
               (lbs/hr)  12.80    11.86        7.73   3.18     3.09      7.10 
               CO (ppm)     0.00   0.00        0.71   1.24     0.86      0.73 

NH3

d d

                           (ppm) 0.45 0.41 1.24 1.73

VOC

e e

                          (lbs/hr) 0.07 0.11 0.83 0.86

Legend: NOX = nitrogen oxides; ppm = parts per million; PM10 = particulate
matter; lbs/hr = pounds per hour; CO = carbon monoxide; NH3 = ammonia; VOC
= volatile organic compounds.

Sources: Sempra and Intergen.

aThese tests were conducted on June 4-6, 2003, and July 8-9, 2003.

bThese tests were conducted between September 20 and September 28, 2004.

cSelective catalytic reduction systems were installed on these turbines in
March and April 2005, after these tests had been completed. These turbines
have been emitting NOX at a level below 2.5 ppm since the installation of
the new equipment.

dNH3 is a by-product of selective catalytic reduction control technology
and was not emitted by these turbines at the time the tests were conducted
because the control technology had not yet been installed.

eVOC emissions were undetectable at the plant during these tests.

We were not able to compare emissions data from the Sempra and Intergen
plants with emissions data from an individual plant in Imperial County to
determine whether the plants would likely meet emissions requirements
because no similar natural gas-fired power plant has recently been
permitted for construction in the county. Therefore, we evaluated the

Sempra and Intergen data against a range of allowable emission limits from
the 23 natural gas-fired power plants of similar size and specifications
that were given permits to operate elsewhere in California by the
California Energy Commission between 2000 and 2004. These 23 plants are
among the cleanest fuel-fired plants in the United States. We found that
the levels of emissions for major pollutants (NOX, PM10, CO, NH3, and VOC)
from the Sempra and Intergen plants are generally comparable to the range
of emissions limits for the recently permitted California plants (see
table 3).

Table 3: Comparison of Estimated Sempra and Intergen Plant Emissions and
the Emission Limits of Recently Permitted Power Plants in California

                        Range of CA                          
                         emission    Sempra Intergen average                  
                                                           b Intergen average
              Pollutant     limitsa    average b (US export)         (Mexico) 
             NOX (ppm)c   2.0 - 2.5                  2.2 2.8             14.4 
          PM10 (lbs/hr) 3.0 - 18.5                  12.3 5.1 
               CO (ppm) 2.0 - 10.0                   0.0 0.8 
              NH3 (ppm) 5.0 - 10.0                   0.4 1.5                d 
           VOC (lbs/hr)   1.6 - 6.6                    e 0.8 

Legend: NOX = nitrogen oxides; ppm = parts per million; PM10 = particulate
matter; lbs/hr = pounds per hour; CO = carbon monoxide; NH3 = ammonia; VOC
= volatile organic compounds.

Sources: GAO analysis of data from the California Energy Commission,
Sempra, and Intergen.

aThe range of emission limits is based on best available control
technology requirements for 23 similar plants permitted in CA between 2000
and 2004. Although these limits are based primarily on the use of modern
emissions control equipment, best available control technology is
determined on a case-by-case basis and may take into consideration factors
such as potential economic impacts, as well as design or operational
standards.

bSempra and Intergen emissions data are based on the average of emissions
from the individual turbines recorded during testing.

cppm for the California plants are based on a 1 or 3-hour average,
depending on the testing method required by the local air pollution
control agency. NH3 levels are computed based on a 1, 3, or 24hour
average.

dNH3, or ammonia, is a by-product of selective catalytic reduction control
technology and was not being emitted at this unit at the time of the tests
because the control technology had not yet been installed.

eVOC emissions were undetectable during tests conducted at the plant.

As shown in table 3, the average NOX emissions from the Intergen power
plant were the only emissions that exceeded the range of emissions from
recently permitted plants in California. This was the case, in part,
because the plant was not originally designed to meet California
requirements. However, as of April 7, 2005, all combustion turbines at the
Intergen plant

had been equipped with the selective catalytic reduction control
technology for nitrogen oxide that is common in the newer California
plants. With the exception of one turbine, which will continue to operate
at a maximum NOX limit of 3.5 ppm, all other turbines are expected to emit
NOX at a level below 2.5 ppm. According to Intergen plant officials, the
last two turbines to be equipped with selective catalytic reduction
systems have been meeting these levels since the systems became
operational in March and April 2005, respectively. Data provided by plant
officials, based on continuous monitoring of all emissions from these
turbines over a 1 week period, also indicate that both turbines are
achieving the expected NOX reductions.

    Estimated Annual Emissions from the Sempra and Intergen Plants Are Low
    Relative to Emissions from Sources in Imperial County

One way to assess the environmental impact of emissions from power plants
is to examine the tons of pollutants they emit on an annual basis. The
third-party performance tests discussed above provide the best available
data to estimate annual emissions likely to occur during actual operations
at the Sempra and Intergen plants because the data are based on
observations of the actual equipment in operation. Other options for
estimating annual emissions from these plants include using (1) the
maximum allowable emissions levels for similar plants in California and
(2) the emissions estimates that DOE developed during its environmental
impact assessment of the Sempra and Intergen plants. Table 4 presents
annual emissions estimates based on each of these three alternative
operating assumptions.

Table 4: Summary of Annual Emission Estimates for the Sempra and Intergen
Power Plants Using Three Alternative Operating Assumptions (Tons per Year)

                                    Maximum allowable    
                       Third-party  emissions levels in   DOE's environmental 
             Pollutant      testing           California     impact statement 
                   NOX          374                  610                  610 
                  PM10          200                  352                1,210 
                    CO          919                1,897                3,089 
                   NH3           86                  518                  646 
                   VOC           57                  105                1,026 

Source: GAO analysis of data from Sempra, Intergen, the California Energy
Commission, and DOE.

Under the first scenario, annual emissions levels were estimated using the
values determined by third-party contractors during turbine performance
tests at the Sempra and Intergen plants. For the two Intergen turbines
that

did not have selective catalytic reduction systems installed when the
testing was conducted, we estimated annual NOX emissions using the testing
values recorded for the similar turbine that was operating with such
equipment. We did so because these two turbines are now equipped with
selective catalytic reduction systems and their future emissions are
likely to be similar to those from the turbine that was using this
technology during the tests. These estimates do not take into account
start-up and shutdown operations of the plant, which may contribute to
increased plant emissions for approximately 1 to 2 hours. However, the
total annual estimate is based on the conservative assumption that the
plants are operating at maximum emission levels, 24 hours a day, 365 days
a year. The actual operation of the plants, and the resulting emissions,
would be less than this because of scheduled maintenance, forced outages,
and varying electrical demand in California.

The second estimates of annual emissions were based on maximum allowable
emissions determined during the permitting process for similar California
plants. These maximum allowable emissions are higher than the estimates
based on third-party testing data. California grants permits to construct
power plants on a case-by-case basis. As a condition of receiving a
permit, the state places limits on emissions of individual pollutants.
These limits are based on the use of best available control technology and
take into consideration energy, environmental, and economic impacts. Under
this estimating scenario, the annual estimates also account for short term
variations in emissions levels that may occur during start-up and shutdown
operations and are based on the conservative assumption that the plants
are operating at maximum emissions levels, 24 hours a day, and 365 days a
year.

The final, and highest, emissions estimates are based on the values DOE
used in its environmental impact statement. DOE's estimates are based on
either the maximum emissions allowable by permit from the Mexican
government or the vendor guarantee limits, which are the maximum emissions
levels specified by the manufacturer that a piece of equipment is likely
to produce. These values tend to be much higher than the levels that
typically occur during normal power plant operations. For example, the
vendor guarantee limit of PM10 for turbines at the Intergen plant is 52.3
pounds per hour. However, the actual emissions of PM10 at plants using
similar equipment are typically below 10 pounds per hour. In addition,
DOE's estimates also assume that the Sempra and Intergen plants are
operating at these levels 100 percent of the time, 365 days per year.
Averaged on an annual basis, these estimates are likely to be
significantly higher than the actual emissions resulting from operations
at these plants.

According to DOE's environmental impact statement, emissions from the
Sempra and Intergen power plant would result in increases of ambient
concentrations of NOX, PM10, and CO in Imperial County. However, it is
difficult to determine the actual percentage of plant emissions that will
reach Imperial County annually. For most of the year, the winds in the
vicinity of the Sempra and Intergen plants travel predominantly from the
United States to Mexico. However, during the months of June, July, and
August, this trend reverses and the winds travel predominantly from Mexico
to the United States. Even assuming the plants operate at the maximum
emissions levels allowed in California, and that all of those emissions
reach Imperial County, annual emissions from the plants are low compared
with various forms of dust and emissions from motor vehicles-the primary
sources contributing to nonattainment of the standards for PM10 and ozone
in Imperial County (see fig. 3).

Figure 3: Relative Emissions Contributions by Source Assuming the Sempra
and Intergen Plants Operated at Maximum Allowable Emissions and All
Emissions Reached Imperial County

Percentage 100

80

60

40

20

0 NOx PM10 CO

Mobile sourcesa

Dust sources Fuel combustionb Other sourcesc

Sempra and Intergen power plants

Source: GAO analysis of data from Sempra, Intergen, and the California Air
Resources Board.

Note:

Emissions contributions of less than 0.5 percent were not included in this
figure. In the PM10 category, mobile sources (0.5 percent), the Sempra and
Intergen power plants (0.4 percent), and fuel combustion (0.2 percent)
emissions were omitted.

aThe "mobile sources" category includes emissions from sources such as on
and off-road motor vehicles, airplanes, trains, boats, and farm equipment.

bThe "fuel combustion" category includes other stationary sources, such as
electric utilities, manufacturing, food and agricultural processing, and
service and commercial operations.

cThe "other sources" category includes all subcategories identified by the
California Air Resources Board, such as farming, fires, waste burning, and
mineral processing that contribute emissions not included in the other
categories listed.

According to 2004 California emissions inventory estimates, road and
windblown dust constituted almost 89 percent of total PM10 emissions
within Imperial County. Mobile sources, which include both personal and
commercial vehicles, accounted for 79 percent of total NOX emissions in
the county. Even if they were located in Imperial County and operated at
maximum allowable California emissions levels 24 hours per day, the

plants would emit 352 tons per year of PM10, compared with nearly 77,000
tons per year from road and windblown dust, and 610 tons per year of NOX,
compared with almost 10,000 tons per year from mobile sources (see table
5).

Table 5: Estimated Annual Average Emissions in 2004 for Imperial County,
California (Tons per Year)

                Emissions sources NOX PM10 CO Stationary sources

a

                         Fuel combustion 2,537 150 325

Other stationary sources 11 1,011

           Subtotal 2,548 1,161 347 Area-wide sources Mobile sources

               Paved and unpaved road dust         0    13,647    
                   Fugitive windblown dust         0    63,068    
                Waste burning and disposal    106        799            4,395 
                       Other miscellaneous    37        7,194             252 
                                  Subtotal    142       84,709          4,647 

                On-road motor vehicles        5,143     139            25,831 
                  Other mobile sources        4,847     252             8,629 
                              Subtotal        9,990     391            34,460 
                                 Total    12,680       86,260          39,454 

Legend: NOX = nitrogen oxides; PM10 = particulate matter; CO = carbon
monoxide.

Source: GAO analysis of California Air Resources Board data.

aThe Fuel Combustion subcategory includes stationary sources such as
existing electric utilities, manufacturing, food and agricultural
processing, and service and commercial operations.

Another way to examine the environmental impact of a power plant is to
evaluate the amount of pollution emitted per unit of electricity produced.
This calculation has been used within the energy industry to measure how
efficiently power plants produce electricity. As illustrated in table 6,
the Sempra and Intergen plants produce much lower emissions of NOX for
each megawatt of energy generated than do other power plants operating in
Imperial County and the border region of Baja California, Mexico. For
example, Sempra's estimated emission rate for NOX of .04 pounds per

megawatt of electricity is over 35 times lower than that rate at El
Centro, the only major fuel-fired plant operating in Imperial County in
2002.11

Table 6: Comparison of NOX Emission Rates from the Sempra and Intergen
Plants and Power Plants in Imperial County and Baja California

                                                               NOX Net annual
                                             emissions rate Annual NOX energy
                        Power plants (lbs/MW) emissions (lbs) generation (MW)

                             Mexicali plants (2004)

                          Sempra 0.04 89,668 2,389,549

                       Intergen 0.30a 1,309,422 4,306,690

                             Imperial County (2002)

                         El Centro 1.45 610,674 421,736

                             Baja California (2002)

                 C.C.C. Presidente                            
                 Juarez (Rosarito)       2.38    4,942,713          2,077,250 
                  C.TG. Presidente                            
                  Juarez (Tijuana)       4.15    2,694,021            648,420 

Legend: NOX = nitrogen oxides; lbs/MW = pounds per megawatt.

Sources: GAO analysis of data from Sempra, Intergen, and the Commission
for Environmental Cooperation.

aIntergen's values represent emissions produced in 2004 before the
installation of selective catalytic reduction technology on two of the
four units. Future NOX emissions rates will likely be comparable to those
at the Sempra plant.

    If the Plants Were Located in Imperial County, California, among Other
    Things, Standards Would Require Them to Offset Their Emissions

If the Sempra and Intergen plants were located in Imperial County, to help
improve air quality, California regulations would require, among other
things, offsets for all emissions from the plants that contribute to
nonattainment of the PM10 and ozone standards in the county. Under the
specific offsetting rules established by the Imperial County Air Pollution
Control District, the operators of each plant would be required to reduce
emissions from other pollution sources in Imperial County by at least 1.2
tons for every ton of emissions the plants released.12 In addition to
offsetting emissions of PM10 and NOX generated by the plant, Sempra and

11North American Power Plant Air Emissions, Commission for Environmental
Cooperation of North America, 2004.

12Imperial County Air Pollution Control District, Rule 207, Section C.3
(Revised Sept. 14, 1999).

Intergen would also be required to offset all emissions of VOC, which, in
combination with NOX, contribute to the formation of ozone.13

As shown in table 7, potential offsets identified by the Imperial County
Air Pollution Control District in DOE's environmental impact statement
include (1) paving roads, (2) retrofitting emission controls on existing
power plants in Imperial County, (3) funding projects designed to increase
the use of natural gas in motor vehicles, (4) controlling Imperial County
airport dust, and (5) retrofitting diesel engines for off-road heavy duty
vehicles. According to the Air Pollution Control District, repaving
approximately 23 miles of roads could reduce PM10 emissions in Imperial
County by about 650 tons per year-more than the estimated annual PM10
emissions from both plants based on the maximum allowable emissions levels
in California. The District estimated the paving project would cost
approximately $430,000 per mile for a two-lane road, bringing the total
cost to about $9.9 million.

13The border city of Calexico, California, is also in violation of the
state ambient air quality standard for CO. Therefore, if the plants were
located in Imperial County close enough to Calexico to impact the city's
air quality, the plants would also be required to offset their emissions
of CO.

Table 7: Potential Offsets in Imperial County, California, Identified by
the Imperial County Air Pollution Control District

                                                                    Estimated 
                                                                     emission 
Potential offset    Description of project     Estimated cost  reduction   
                      o  Pave 50 road segments in                650 tons per 
     Paving roads    Imperial County, totaling 23   $9,890,000       year     
                               miles.                               (PM10)    

Enhancing use o    Fund maintenance of El Centro     $150,000    a0.1 tons 
    of natural            natural gas facility.                      per year 
gas in motor     Fund natural gas facility to be                           
     vehicles    o  constructed at the Calexico         $250,000     (PM10)
                    Unified School District.                        
                 o      Acquire land in Brawley,       $250,000 to  
                    California, for construction of a               
                        new natural gas facility.       $500,000    
                 o   Replace/update fleet of fifteen  $4 million to 
                         Imperial Valley buses.       $5            
                                                         million    

                             Begin treatment of bare                          
Controlling Imperial o   desert soil with chemical   $150,000  15 tons per 
          County                       dust                              year
                             retardants or cover soil                         
       Airport dust          with crushed rock in the               (PM10)
                              most sensitive areas.              
Retrofitting diesel  o  Update the diesel engines of          3.3 tons per 
         engines            off-road vehicles used in   $250,000         year 
                           agriculture, earthmoving, or                       
                                  construction.                     (PM10)

Retrofitting emission  o  Install selective catalytic reduction technology
on one main Not Estimated The main unit is controls on existing power unit
of the existing steam plant at the Imperial Irrigation already scheduled
to plants District, as well as all of the smaller units used only during
be retrofitted in 2007

periods of peak electricity demand. 2008

(NOX)

Legend: NOX = nitrogen oxides; PM10 = particulate matter.

Source: DOE.

aEstimated emission reduction applies only to the bus replacement project.
Emission reductions from the other projects were not quantified.

In addition to the potential offsets identified above for Imperial County,
according to DOE, mitigation measures may be even more abundant and
cost-effective if applied on the Mexican side of the border. Some
potential projects include paving roads in Mexicali, Mexico; replacing
older automobiles and buses with newer, less polluting ones; and
converting brick kilns to run on natural gas. However, according to DOE,
it does not have the authority to impose or enforce offsets in Mexico.

Finally, if the power plants were located in California, the Intergen
plant would likely be required to make additional equipment modifications
to be consistent with other plants recently constructed in California.
These modifications would include installing additional carbon monoxide
control equipment and achieving a small reduction in NOX emissions in one
of the plant's four combustion turbines. Although emissions testing data
indicate that Intergen's carbon monoxide levels are generally comparable
to those of California plants without this equipment, nearly all of the
plants

    Emissions Generated by the Sempra and Intergen Power Plants May Contribute
    to Various Adverse Health Impacts in Imperial County, but the Extent of Such
    Impacts Is Unknown

recently permitted in California have installed oxidizing catalyst systems
to control carbon monoxide emissions. In addition, the Intergen plant
would likely be required to lower the maximum NOX emissions in one turbine
by 1.0 ppm-from 3.5 ppm to 2.5 ppm. Although this turbine is currently
equipped with a selective catalytic reduction system to control NOX
emissions, Intergen has stated that certain technical aspects of the
design of the turbine prevent it from attaining emissions levels of 2.5
ppm.

Emissions from the Sempra and Intergen power plants may contribute to
adverse health impacts in Imperial County, but the extent of those impacts
is unknown for several reasons. First, in its environmental impact
statement, DOE did not calculate the total health impacts in the county
because it did not analyze all the likely asthma-related or other health
impacts from the increased pollution caused by the Sempra and Intergen
plants. Second, DOE did not analyze the health impacts from increased
power plant emissions on particularly susceptible populations, such as
asthmatic children and low-income populations. Finally, because of
uncertainty in DOE's modeling of ozone increases due to emissions from the
power plants, the health impacts related to ozone may be larger than DOE
estimated.

      DOE Did Not Analyze All the Likely Asthma-Related and Other Health Impacts
      of Increased Pollution from the Sempra and Intergen Power Plants