Energy Commission Flooded With New Power Plant Applications

By Published On: August 31, 2007

California regulators are facing the largest barrage of new power plant applications–many involving renewable energy–since the state’s energy crisis of 2000-2001 some of which may not be built because of lack of remote transmission capacity and advance power purchase contracts. Of them, the California Energy Commission has approved 36 projects, with 13,000 new MW already online or under construction, Terry O’Brien, deputy director of the CEC’s Energy Facilities Siting Division told the commission in a power plant status report August 29. Another 19 projects that have been approved by the commission and are waiting to move forward will provide an additional 6,900 MW if built. Meanwhile applicants have cancelled six new power plants that would have provided 1,393 MW. The CEC is reviewing applications for another 18 projects totaling 6,654 MW. It anticipates 12 more applications that would have 4,417 MW of new capacity to be filed this year. Looking ahead, O’Brien is “reasonably confident” that another 11 new projects totaling over 3,000 MW will be filed next year and would “not be surprised if that increases.” The flood of new power plant projects constitutes a “huge work load” for the commission’s overburdened siting staff, which historically processed only seven applications per year, O’Brien stressed. “We’re struggling with being able to process that,” he said. Unlike the flood of applications for predominantly small peaking projects during the 2000-2001 energy crisis, the current deluge is for full-scale power plants up to 900 MW of capacity. While many new projects are in response to procurement requests from Pacific Gas & Electric and San Diego Gas & Electric, commission staff also is reviewing projects that do not have contracts. “How they go forward and will they be built is open-ended,” O’Brien said. The CEC anticipated that the Bright Source project would file the first solar power plant application this week and that other solar energy developers would file applications for their projects this year and next, O’Brien said. The siting staff expects applications from 13 solar projects, all but one in Southern California (the sole exception being a solar project in San Luis Obispo County). Most of these solar projects are quite large ranging up to 900 MW and some have already signed power purchase contracts with utilities Most solar projects will be constructed on public lands managed by the Bureau of Land Management or will require remote transmission lines to be built through BLM land to transport the solar power to end users. The commission’s siting staff has signed a Memorandum of Understanding with the BLM–which typically operates on a more glacial timetable–to expedite review of solar projects for environmental and other impacts. Commissioners expressed concern about the lack of adequate transmission capacity to transport the solar power from remote desert areas to interconnection points with the power grid. “That’s a key issue we’re going to have to wrestle with when they file their applications,” O’Brien responded. Commissioners also expressed concern about the growing accumulation of approved projects without firm power purchase contracts to back them up. “There’s a bit of a land rush on all these potential solar projects,” said commissioner Jeffrey Byron. “There may be more geothermal projects coming, too.” Project viability is a growing concern among energy producers, too, stressed Steven Kelly, Independent Energy Producers Association policy director. “This is a very intractable issue,” he said. Kelly warned that the California Independent System Operator has 40 MW of new power in its queue “with no idea whether they’ll come to pass.” Kelly urged the Energy Commission to take the lead and initiate a dialogue on project viability with CAISO, electric utilities, and independent generators. The process should be improved to ensure that projects that are more viable can move through more quickly than other applications, he said. In other business, the commission approved changes to its greenhouse gases emission performance regulations for local publicly owned electric utilities as mandated by SB 1368 to address deficiencies identified by the Office of Administrative Law. In June, the office rejected the SB 1368 regulations submitted by the Energy Commission The commission revised the proposed regulations to address the office’s concerns by clarifying that: -The GHG performance standard applies to procurement from baseload generators of all sizes; -Generators seeking to add up to 50 MW to baseload power plants must demonstrate compliance with the GHG performance standards; -The exemption for new investment in existing power plants does not pertain to routine maintenance; and -The rules allow for public review. The revisions were supported by a coalition of environmental organizations but partially opposed by the California Municipal Utilities Association, which urged the inclusion of an exemption for “routine maintenance” in the GHG emissions performance standard. “Routine maintenance” has been a real debacle for the Clean Air Act for the past 20 years. Now it’s written into the Energy Commission regulations,” said CMUA attorney Bruce McLaughlin. “SB 1368 is not intended to shut down currently operating power plants or lead to their deterioration,” the commission’s revised regulations stress. “Its focus is ensuring that substantial investments are not made that would lead to further costs when AB 32, or a similar program establishing a greenhouse gases emissions limit, is implemented.”

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