Enviro groups mount pushback against NRG’s Carlsbad project in California

On May 5, a group of San Diego area public officials, students, health professionals, and clean energy companies plan to hold a press conference to voice their opposition to a California Public Utilities Commission (CPUC) proposal to build the new, gas-fired Carlsbad Energy Center power plant without letting clean energy compete.

The Carlsbad Energy Center would be built to partially replace the shuttered San Onofre Nuclear Generating Station (SONGS). The Sierra Club said in a May 1 statement that it has been pushed through the CPUC by planned power customer San Diego Gas and Electric (SDG&E) and project developer NRG Energy (NYSE: NRG) amid public opposition. The CPUC is expected to vote on this proposal on May 7.

When SONGS was retired, SDG&E was directed by the CPUC to make up the lost energy with at least 200 MW of clean resources. The remaining 600 MW need would be open to an “all sources” bidding process and energy proposals were submitted. However, SDG&E decided to move forward with a proposal from NRG to build the Carlsbad project without disclosing whether or not less expensive, clean energy projects were submitted, the club said. On March 6, an Administrative Law Judge at the CPUC rejected SDG&E’s plan. In response to this decision, CPUC President Michael Picker has introduced his own proposal, which would somewhat reduce the size of the plant to 500 MW. SDG&E has recommended postponing approval of the gas plant to allow it more time to review other proposals. On May 7, the CPUC will vote on Picker’s proposal.

NRG says quick approval of smaller Carlsbad project is needed

Said NRG Energy’s Carlsbad Energy Center LLC subsidiary in April 27 comments to the commission: “Pursuant to Rule 14.3 of the Rules of Practice and Procedure of the California Public Utilities Commission (‘Commission’), Carlsbad Energy Center LLC (‘Carlsbad Energy’) submits its opening comments on the Alternate Proposed Decision of Commissioner Picker mailed April 6, 2015 (‘Alternate PD’). The Alternate PD conditionally approves the application of San Diego Gas & Electric Company (‘SDG&E’) in this proceeding for authority to enter into a power purchase tolling agreement (‘PPTA’) for the Carlsbad Energy Center, subject to the conditions that: the contract capacity is reduced from 600 megawatts (‘MW’) to 500 MW; and all of the 100 MW in residual procurement authority resulting from the amendment of the PPTA must consist of preferred resources or energy storage.”

The NRG subsidiary added: “The Alternate PD provides for SDG&E to submit, via a Tier 1 Advice Letter, an amended PPTA reducing the capacity from 600 MW to 500 MW but otherwise subject to the same per-unit price and other terms and conditions in the PPTA submitted with SDG&E’s application. Carlsbad Energy supports the Alternate PD and recommends that the Commission adopt the Alternate PD at the May 7th business meeting. If the Alternate PD is approved in May, then Carlsbad Energy will agree to modify the PPTA to reduce procurement from six [General Electric] LMS-100 generating units to five GE LMS-100 generating units, while maintaining the same price, schedule and other terms and conditions in the PPTA submitted with the application. As Carlsbad Energy has stated previously, a Commission decision approving the PPTA is needed no later than May 2015 to maintain the current project schedule, which provides for financing and start of construction this year.

“Reducing procurement under the PPTA as required in the Alternate PD requires minimal changes to the PPTA that was submitted with SDG&E’s application. The only provisions that require modification are those that specify or are directly related to the quantity of contract capacity. These few changes to the PPTA can be accomplished expeditiously for submission of the Tier 1 Advice Letter as required in Ordering Paragraph 1 of the Alternate PD. Any claims that the Alternate PD approves a contract that does not yet exist or that has not been reviewed are false. The PPTA that is approved in the Alternate PD is the PPTA that SDG&E submitted with its application, with only the very few edits that are necessary to reduce the contract capacity from six generating units to five generating units. These edits are simple and straightforward.”

San Diego Gas & Electric to submit more data on Carlsbad versus other power bids

Said San Diego gas & Electric in its April 27 comments: “SDG&E will soon be presenting its proposed short list from its pending 2014 Request for Offers (‘RFO’) to its Procurement Review Group (‘PRG’) (which will include, at the request of the Energy Division, a comparison between the Carlsbad Energy Center and the bids from the RFO) and expects to notify the shortlisted bidders this Summer.

“In addition, the Commission has important ongoing proceedings dealing with Rate Reform, Net Energy Metering, and the Distribution Resources Plan rulemaking. Additionally, the legislature is considering proposals to expand direct access and increase renewable energy goals. These regulatory and legislative initiatives will influence utility and customer decisionmaking long into the future. A better understanding of the outcome of the 2014 RFO as well as the direction of related Commission proceedings and legislative initiatives will better inform SDG&E and the Commission on both the need for and make up of future long-term supply-side resources. In light of these factors, SDG&E encourages the Commission to consider the results of the 2014 RFO and the direction of these relevant regulatory and legislative initiatives prior to making a final decision on the Application.

“If, on the other hand, the Alternate PD is adopted, SDG&E will fill any remaining need with preferred resources or energy storage from either its pending 2014 RFO, a future RFO or other procedural vehicle.”

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.