Pio Pico Energy Center LLC, which is building a gas-fired power plant in California, on Jan. 11 asked the Federal Energy Regulatory Commission to accept for filing its market-based rate tariff and grant such waivers and blanket authorizations as the commission previously has granted to other entities engaged in wholesale sales of electricity at market-based rates.
The company requested expedited consideration of the application, including that the commission waive the 60-day notice requirement and shorten the response period to this application so that it may accept for filing and approve the tariff with an effective date of March 1. Pio Pico anticipates the commencement of wholesale power activities by the summer of 2016, and that the facility will be energized for testing purposes, by a date that may be as early as March 1.
Pio Pico owns and will operate an approximately 318-MW gas-fired simple-cycle facility located in Otay Mesa, an unincorporated area of San Diego County, California, that is undergoing late-stage construction. The facility will be interconnected with San Diego Gas & Electric (SDG&E), whose transmission system is operated by the California Independent System Operator (CAISO).
Once constructed, the facility will include limited, discrete, generator-side electric interconnection facilities necessary to effectuate Pio Pico’s wholesale power sales. Pio Pico will own the electric interconnection facilities that consist of generator leads, lengths of wire, step-up transformers, substations and/or other related appurtenant equipment to the point of interconnection. Pio Pico will sell at wholesale electric energy and capacity produced from the facility. Pio Pico in 2011 entered into a 20-year Power Purchase Tolling Agreement with SDG&E for approximately 318 MW of electric capacity. Among other things, the PPTA provides for an “Expected Initial Delivery Date” of June 1, 2017, and extends for a period of 25 years.
The facility must be prepared to enter commercial service by or before the fall of 2016, before the Expected Initial Delivery Date. For a period of several months (the “Pre-PPTA Period”), the facility is required to be operational but the facility’s output is to be sold and marketed in the wholesale energy and capacity markets, during that limited Pre-PPTA Period only. Following that preliminary period, all deliveries must be made to SDG&E exclusively.
During that Pre-PPTA Period, Pio Pico will procure the fuel necessary for operations. During the Delivery Period, SDG&E will provide the natural gas required as fuel to operate the facility, and will purchase all of the electric capacity and energy generated by the facility and associated ancillary services and environmental attributes.
Pio Pico is controlled by Ares EIF Management LLC (formerly known as EIF Management LLC), an investor in power plants.