Pacific Gas & Electric works out 2016 power deal out of Pittsburg plant

Pacific Gas & Electric is requesting that the California Public Utilities Commission approve a proposed resource adequacy (RA) capacity agreement with GenOn Energy Management LLC for the full 2016 calendar year.

Said a resolution from PUC staff that the commission will review at its Jan. 29 meeting: “This Contract arose from PG&E’s 2014 RA Intermediate-Term Request for Offers (‘ITRFO’), a competitive solicitation seeking RA benefits from 2015 through 2018. The GenOn Contract will provide PG&E with Local RA benefits from Pittsburg 5, Pittsburg 6, and Pittsburg 7, three existing natural gas-fired generating units located at Pittsburg Generation Station. The units are in the Pittsburg/Oakland Sub-Area of the Greater Bay Area Local Capacity Area. Pittsburg 5 and 6 are subject to the State Water Resources Control Board (‘SWRCB’) once-through cooling (‘OTC’) policy, and both have an SWRBC OTC compliance deadline of December 31, 2017.

The GenOn Contract is for 1,159 MW of Local RA capacity, for a term beginning on Jan. 1, 2016, and continuing through Dec. 31, 2016. The contract does not include any energy tolling capacity.

The resolution added: “The Local RA capacity contracted for is equal to 100% of the combined Net Qualifying Capacities (‘NQCs’) of Pittsburg 5, 6, and 7, which are 312, 317, and 530 MW respectively. The Pittsburg 5, 6, and 7 units have Effective Flexible Capacities (‘EFCs’) of 267, 272, and 445 MW, respectively; the amount of this Flexible RA capacity, if any, that will be provided to PG&E is confidential.”

Pittsburg 5 and 6 both have an OTC compliance deadline of Dec. 31, 2017. The GenOn Contract ends on Dec, 31, 2016, one year prior to the OTC deadline. According to PG&E, GenOn has stated that the contract will not delay compliance by the end-of-2017 deadline, nor will it delay or prevent Pittsburg Generating Station’s compliance with any current or interim requirements prior to that final compliance deadline. More specifically, PG&E stated that the GenOn Contract will not interfere with GenOn’s plan to comply with the SWRCB OTC policy by either: retiring Pittsburg 7 and retrofitting Pittsburg 5 and 6 to utilize the existing Pittsburg 7 cooling tower system instead of their current OTC systems; or retiring Pittsburg 5 and 6. Pittsburg 5, 6, and 7 are natural-gas-fired steam boiler resources. Pittsburg 5 and 6 utilize once-through cooling technology, while Pittsburg 7 uses cooling tower technology.

GenOn parent NRG Energy (NYSE: NRG) has been working for some time on developing the 550-MW, gas-fired Willow Pass power plant, which would be located next to the existing Pittsburg plant. Willow Pass would consist of two power blocks, each containing one Siemens Flex Plant 10 combined-cycle unit. The units are expected to operate at a 40% to 50% capacity factor and would use air-cooled heat exchanger (ACHE) technology to reduce water consumption.

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.