California PUC rejects appeals of contract for NRG’s 262-MW Puente project

The California Public Utilities Commission on Dec. 5 rejected rehearing requests related to its approval of a power purchase deal for the gas-fired Puente peaker project, but did add further details on how this project meet environmental justice criteria.

The rehearing was requested by the City of Oxnard, the California Environmental Justice Alliance (CEJA) and the Sierra Club (jointly), and also the Center for Biological Diversity.

In 2013, the commission issued what is referred to as the Track 1 Decision in the Long-Term Procurement Plan (LTPP) proceeding. That decision authorized Southern California Edison (SCE) to meet its local reliability/capacity needs by issuing a Request for Offers (RFO) in both the West Los Angeles sub-area of Los Angeles, and the Moorpark sub-area of Big Creek/Ventura.The rehearing applications at issue in this Dec. 5 order pertain to the Moorpark solicitation.

In Moorpark, SCE was authorized to procure 215-290 MW of non-resource specific electric capacity to meet local capacity requirements by 2021. The challenged decision from earlier this year approved 12 MW of preferred resource load reduction contracts with energy efficiency and solar generation projects. t also approved a 20-year power purchase contract with NRG Energy Center Oxnard LLC for the Puente Project, a 262-MW natural gas-fired peaker facility. The project company is a unit of NRG Energy (NYSE: NRG).

Oxnard argued that the commission should have acted as the lead agency under the California Environmental Quality Act (CEQA) to conduct environmental review before approving the Puente contract. CEJA and Sierra Club alleged the decision erred in approving the Puente contract because it: failed to adequately consider environmental justice issues; failed to comply with Government Code; relied on a procurement plan approved by the Energy Division; approved the contract before environmental review by the California Energy Commission (CEC) was complete; and failed to adequately apply least-cost best-fit procurement criteria. The Center contended the commission erred in approving the Puente contract because it: is contrary to the preferred resources Loading Order; approved the contract before environmental review was complete; was tainted by a biased RFO; and failed to assess project need.

Said the Dec. 5 decision: “We have carefully considered the arguments raised in the applications for rehearing and are of the opinion that good cause has not been established to grant rehearing. However, as set forth in the below ordering paragraphs, we modify D.16-05-050 to clarify our discussion regarding consideration of environmental justice issues, and add and/or modify certain findings of fact and conclusions of law for clarity. With these clarifications we deny the applications for rehearing of D.16-05-050, as modified, because no legal error was shown.”

The Puente Project will be sited on a brownfield site where the Mandalay Generating Station is currently located. The commission noted that its policy directs utilities to take advantage of brownfield sites like this one. It was also beneficial that the Puente Project will be a reliable peaker plant with fast-start, fast ramping capabilities which provide important grid support services. “Overall, the contract‟s economics and general terms and conditions were found to represent the best resource available from the RFO, and the energy is needed to meet local reliability needs in Moorpark given pending retirement of Mandalay Units 1 and 2, and the Ormond Beach once-through cooling (‘OTC’) generation units,” the commission noted. “Thus, on balance, it was reasonable to approve the Puente contract.”

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.