Pio Pico has new deal with San Diego Gas & Electric for power project

Pio Pico Energy Center LLC has worked out a sixth amended Purchase Power Tolling Agreement (PPTA) with San Diego Gas & Electric for its gas-fired, 300-MW peaking power project.

Pio Pico filed a copy of the agreement on June 11 with the U.S. Environmental Appeals Board, which is hearing appeals of the repowering project’s air permit.

“San Diego Gas & Electric Company and Pio Pico have executed an amendment to the Purchase Power Tolling Agreement (‘PPTA’) which contemplates the project starting construction in early 2014 and requires a commercial operations date no later than September 1, 2015,” said the company in the June 11 filing.

“Although Pio Pico maintains that it does not require the amendment to the PPTA to begin construction and operation of the Pio Pico Energy Center, this notice is provided given the Board’s prior request for additional briefing and a status conference on the issue,” the company added.

The Sierra Club, in a June 18 response, said the PPTA document is not relevant to the issues in this proceeding because the PPTA does not become effective unless and until the California Public Utilities Commission (CPUC) approves an application from San Diego Gas & Electric (SDG&E), which has not happened. “PPEC’s submission also raises concern because the heavily redacted document does not provide any context or substantive evidence whatsoever,” the Sierra Club added. “The Board should not consider the submission of the Sixth Amended PPTA as relevant to the issues in this proceeding.”

The CPUC has already rejected a previously proposed PPTA between Pio Pico and SDG&E on the grounds that there was no need for the facility until 2018 at the earliest, the club noted. The federal board already provided PPEC an opportunity to address this issue at the April 11 prehearing conference and again in PPEC’s April 15 supplemental brief, the club added.

Appeal is over the project’s PSD air permit

In December 2012, Helping Hand Tools, Robert Simpson and the Sierra Club each filed a petition seeking board review of a Clean Air Act prevention of significant deterioration (PSD) permit. The permit, issued by U.S. Environmental Protection Agency Region 9, authorizes Pio Pico to construct and operate a 300-MW natural gas-fired power plant in Otay Mesa, Calif.

The petitions challenge the region’s issuance, as well as several conditions, of the permit. Both the region and Pio Pico filed responses to the petitions.

The board said in an April 5 decision setting up the April 11 prehearing conference: “The recent changes in circumstances the parties report raise questions about whether Pio Pico will, in fact, be able to construct a merchant plant, as it now represents; if so, whether the nature, purpose, and design parameters of the project will remain as originally proposed in the PSD application and as permitted in the PSD decision the Region issued; when Pio Pico would likely begin construction on the proposed plant; and whether the Region would have approached its best available control technology (‘BACT’) analysis in the same manner absent Pio Pico’s contractual obligation to SDG&E under the PPTA. In previous PSD permit appeals where concerns about the construction of the proposed facility were raised during the course of the appeal, the Board and its predecessors stayed and/or remanded the permit decision as deemed appropriate under the specific circumstances of each case.”

Said Pio Pico in a Feb. 6 brief about the air permit appeal: “The proposed plant will consist of three 100 megawatt General Electric LMS100 simple cycle natural gas-fired turbines. Pio Pico will be constructed to satisfy a request by [SDG&E] for new peaking generation. The plant will support SDG&E’s wind and solar power generation assets. This requires Pio Pico to use quick-starting, simple cycle turbines that can rapidly scale through loads to produce power that will supplement intermittent generation gaps from wind and solar units.”

Helping Hand Tools, Robert Simpson and the Sierra Club challenged several technical analyses supporting the permit’s conditions, including:

  • the region’s determination that use of a simple cycle gas turbine is warranted, given the design parameters of the facility, and that a combined cycle gas turbine would not allow the Pio Pico to fulfill its purpose as a peaking power plant;
  • the determination of the greenhouse gas (GHG) and particulate matter (PM) BACT emission limitations;
  • the calculation of Pio Pico’s potential to emit carbon monoxide; and
  • the use of specific monitoring data for ambient background air quality modeling purposes.

“[T]he Board should deny the petitions for review on these issues,” said Pio Pico in the Feb. 6 brief. “For each of these challenges, the Region’s determinations are supported by the extensive record for this Permit and the petitioners fail to meet their heavy burden in showing the Region’s analysis was clearly erroneous, unsupported by the record, or otherwise arbitrary.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.