California agrees to another delay for 500-MW gas project

On June 30, the California Energy Commission approved a June 10 request from Valle Del Sol Energy LLC that the suspension of proceedings in a power plant approval case, lately set to expire on June 30, be extended for a year.

During the suspension, commission staff and all responsible agencies will not work on the application and all pending motions are stayed. The company will need to file quarterly status reports beginning Sept. 1, 2014. Staff and other parties may also file status reports, but are not required to do so.

The new suspension is due to expire June 30, 2015. In its June 1, 2015 status report, Valle Del Sol Energy needs to indicate whether or not it will seek a further suspension.

Valle Del Sol Energy LLC is part of NRG Energy (NYSE: NRG). This proceeding, begun in 2005, involves Valle Del Sol’s application for certification (AFC) of the Sun Valley Energy Project, a 500-MW, natural gas-fired peaking plant made up of five General Electric LMS-100 gas turbines to be located in the City of Menifee, Calif. That location is within the jurisdiction of the South Coast Air Quality Management District (SCAQMD).

As a result of an acquisition that closed in April 2014 of Edison Mission Energy assets, Valle Del Sol is now an indirect wholly owned subsidiary of NRG Energy. The commission previously granted other suspensions of this proceeding before the ownership change.

Valle Del Sol noted that it requested the previous suspensions due to permitting difficulties associated with the unavailability within the South Coast Air Basin of emission offsets from the market that would be needed to satisfy SCAQMD rules. Those permitting difficulties still exist and more time is needed to develop offsets to support the Sun Valley Project. A further extension also would afford more time to identify contracting opportunities that support development of the Sun Valley Project, which is well located to provide flexible capacity and services, particularly in light of the permanent retirement of the 2,200-MW San Onofre Nuclear Generating Station (SONGS), the company said.

SCAQMD has initiated rulemaking with the proposed Rule 1304.2, which would make the SCAQMD’s internal offset bank available to power plant developers without steam boiler capacity, the company added. This rulemaking effort has recently begun and it will take substantial time to complete rule development and achieve adoption. In addition, following NRG’s acquisition of Valle Del Sol, there could be opportunities to devise an offset strategy that involves existing steam boiler units in the NRG-owned fleet using the offset exemption in Rule 1304(a)(2).

A project contact is: Sean Beatty, Regional General Counsel-West, NRG Energy, 696 West 10th Street, Pittsburg, CA 94565, Telephone: (925) 427-3483, sean.beatty@nrgenergy.com.

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.