California PUC asked not to approve contracts with two NRG projects

The California Public Utilities Commission at its May 26 meeting is due to look at a proposed decision from one of its administrative law judges that would reject Southern California Edison‘s request to approve contracts with two gas-fired power projects.

Up for review are the results of a request for offers (RFO) conducted by Southern California Edison (SCE). Rather than approve a contact with the gas-fired Puente Project, the proposed decisions says the PUC will complete its review of the Puente Project after an environmental review is completed by the California Energy Commission. Also, the proposed decision would deny, without prejudice, the Ellwood contract, which was presented in this proceeding for approval although the contract was not part of a need determination. Also rejected would be a deal covering a 0.5-MW energy storage project at Ellwood that is an integral part of a planned Ellwood repowering. 

With these exceptions, SCE has reasonably complied with a PUC requirement to hold an RFO for the Moorpark sub-area, said the proposed decision. This proceeding would remain open for further consideration of procurement in the Moorpark sub-area, including the Puente Project.

In 2013, the commission ordered SCE to procure, via an RFO, a minimum of 215 MW and a maximum of 290 MW of capacity in the Moorpark sub-area of the Big Creek/Ventura local reliability area (Moorpark sub-area) to meet identified long-term local capacity requirements (LCR) by 2021. The commission found this LCR need existed, in large part, due to the expected retirement of the Ormond Beach and Mandalay once-through-cooling (OTC) generation facilities, which are both located in Oxnard, California.

SCE came back with 11 recommended contracts out of this RFO.

  • One of them is a 20-year contract for gas-fired generation (totaling 262 MW of capacity). This contract is a resource adequacy (RA) purchase agreement with NRG Energy Center Oxnard LLC for a new simple cycle peaking facility known as the Puente Power Project.
  • Another contract, which is also for gas-fired generation (totaling 54 MW of capacity), does not count toward SCE’s incremental procurement requirements for the Moorpark sub-area. This contract is a 10-year agreement with NRG California South LP (NRG California South) for the existing 54-MW Ellwood Generating Station (Ellwood), which NRG California South will refurbish (without any change in size or capacity) to provide a remaining 30-year design life.
  • SCE also sought approval of an energy storage contract with NRG California South. This project is located on the site of Ellwood. The NRG Energy Storage contract is a tolling agreement for a 0.5 MW storage facility.
  • The remaining contracts include six contracts for energy efficiency (totaling 6 MW of capacity) and two contracts for renewable distributed generation (totaling 5.66 MW of capacity)

Said the proposed order about shelving the Puente Project consideration: “In this instance, the CEC’s review may enhance the Commission’s independent determination of critical safety issues and environmental justice matters and also clarify reliability risks posed by locating the new electric infrastructure on the beach in the City of Oxnard. This proceeding remains open for further consideration of this matter.”

Said the proposed decision about Ellwood: “Today’s decision refrains from approving the ten-year contract for the Ellwood Project located in Santa Barbara County. The Ellwood Project includes the refurbishment of the Ellwood plant, an existing gas-fired generation peaker plant in Goleta, Santa Barbara County. Ellwood is a combustion turbine generating unit built in 1974. Historically, Ellwood has not been a reliable resource. The Project is located adjacent to a residential area. While the project may have advantages, the project fails to conform to certain fundamental RFO requirements found in D.13-02-015 and has not been properly vetted. No need determination was made in D.13-02-015. The Commission’s consideration of the Ellwood contract in this proceeding also presents procedural concerns. Finally, the contract is of indeterminate value to ratepayers. SCE may resubmit the project for Commission approval should the circumstances be appropriate.”

As for the Ellwood storage project, the proposed decision added: “The ten-year, 0.5 MW energy storage contract between SCE and NRG California South LP at the Ellwood site would, most likely, have been found consistent with D.13-02-015 and approved today. However, as NRG points out, approval of the Ellwood contract is required to facilitate the addition of the new 0.5 MW energy storage facility at the Ellwood site, as the two contracts were linked together by NRG as a mutually exclusive offer. Because the Ellwood contract is not approved today, we necessarily reject the 0.5 MW energy storage project located at the Ellwood site.”

The proposed decision says about the other contracts: “SCE presented several additional contracts for Commission consideration. Six contracts are for energy efficiency (totaling 6 MW of capacity), and two contracts are for renewable distributed generation (totaling 5.66 MW of capacity). We find these contracts reasonable and consistent with D.13-02-015. These contracts are approved.”

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.