AG Negotiations Delay Contra Costa Plant Again

By Published On: August 28, 2004

To help ease the way for new power plants, the California Energy Commission backed off August 25 on project milestones it originally set out in its certification of Mirant?s Contra Costa unit 8 to keep the project alive. This was the second delay granted. This time, the commission allowed the delay in order to facilitate negotiations between the Attorney General?s Office and the developer over state claims resulting from the energy crisis. Mirant is under Chapter 11 bankruptcy protection. ?A critical component? of negotiations with the state is the transfer of development of the Contra Costa plant, said Mirant attorney Mike Carroll of Latham Watkins. In order for those talks to come to fruition, he said, it?s important that the project remain viable?that is, that the commission not require Mirant to forfeit certification because construction milestones have not been met. The 530 MW unit 8 project was approved in May 2001, with a completion date of June 2005. It then was delayed in February 2002, with a completion date of November 2006, because the merchant electricity market has been in flux. Also at this week?s meeting, the commission delayed a $1.2 million payment for Otay Mesa. The pollution mitigation fee goes to the San Diego Air Pollution Control District for PM 10 (small particle) impacts. Half the payment was originally due in two parts?summer 2002 and 2003. Developer Calpine requested that it be paid no later than 14 months prior to firing up the first turbine, or October 31, 2006, whichever comes first. Commission staff originally rejected that request but later agreed on the October 2006 date. The $1.2 million payment escalates with the consumer price index starting in October 2003.

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