GE says co-ownership of new Calif. plant not a market power issue

Several General Electric (NYSE: GE) companies with power plants fueled by everything from natural gas to coal filed a Sept. 9 notice with the Federal Energy Regulatory Commission that the commercial start of a new gas-fired plant won’t be a market power issue.

Each of the GE companies has market-based rate authority. They told commission of a non-material change in status as a result of the achievement of commercial operation by an affiliate, Russell City Energy Co. LLC, of a 625 MW (nameplate) natural gas-fired project, which occurred on Aug. 13. The achievement of commercial operation of the Russell City Facility does not affect the findings upon which the commission relied in granting market-based rate authority to each of the GE companies, they said.

Russell City is an exempt wholesale generator with market-based rate authority. The Russell City facility is interconnected with the transmission system operated by the California Independent System Operator (CAISO). The Russell City Facility is fully committed to Pacific Gas & Electric (PG&E) under a long-term tolling agreement.

Russell City is owned: 75% by Calpine Russell City LLC; and 25% by Aircraft Services Corp. (ASC).

  • Calpine Russell City is a direct subsidiary of Calpine Development Holdings, which is wholly owned by Calpine Power, which is wholly owned by Calpine Corp. (NYSE: CPN).
  • ASC is owned 48% by General Electric Capital Corp. (GECC), and 52% by GE Structured Finance, a wholly-owned subsidiary of GECC. GECC is a wholly-owned subsidiary of General Electric.

Since the Russell City Facility is located within the CAISO BAA, CAISO is the relevant market, the Sept. 9 filing noted. Net uncommitted supply in CAISO is 17,665 MW. “Taking a conservative approach that assumes that all capacity owned by affiliates in CAISO is uncommitted, except for the capacity owned by Russell City, the GE Companies’ uncommitted capacity in the CAISO market remains unchanged at 1,543 MW,” the GE companies added. “Because the GE Companies’ uncommitted capacity is less than the net uncommitted supply in CAISO, they continue to pass the pivotal supplier screen in the CAISO market. Total uncommitted capacity in the CAISO market ranges from 24,613 MW to 27,241 MW. Based on those figures, the GE Companies’ market share remains, at most, approximately 6.3 percent of the CAISO market (i.e., less than 20 percent in all seasons). Accordingly, the GE Companies continue to pass both the pivotal supplier and wholesale market share screens.”

Calpine has started operations at two new or revamped gas plants

Calpine announced Aug. 13 that it had flipped the switch on two new or upgraded combined-cycle natural gas plants in California that will both sell power to PG&E. The deployment of the Russell City Energy Center and Los Esteros Critical Energy Facility, both located in the San Francisco Bay area, brings online more than 900 MW of generating capacity.

“Bringing this new capacity on-line demonstrates Calpine’s continued commitment to helping meet the power needs of our customers and, importantly, to helping ensure the grid’s reliability by producing flexible, natural gas-fired capacity so critical to the challenges posed by integration of intermittent renewable resources such as wind and solar,” said Calpine CEO Jack Fusco.

“We are particularly proud of the environmental attributes of these facilities, with Russell City being the nation’s first power plant to volunteer to accept a permit with a limit on greenhouse gas emissions,” Fusco said. “In addition, the two plants together will use up to 6 million gallons of recycled wastewater from the local municipalities that would otherwise be discharged into the San Francisco Bay.”

Located in San Jose, the Los Esteros Critical Energy Facility first began commercial operations in March 2003 as a 188-MW peaking power plant. The plant has now been upgraded to a combined-cycle facility capable of generating up to 309 MW, Calpine said.

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.