CA's First Merchant Plant Nears Starting Gate
Although gas supply and power contracts probably won't be signed
until next year, California's first major merchant generation plant
is expected to get its final state regulatory approval next week
and break ground this summer north of Sacramento in Sutter County
near the agricultural town of Yuba City. A set of environmental
concessions by the project sponsor, San Jose, CA-based Calpine
Corp., pushed it into the lead spot among seven other projects
undergoing the state regulatory approval process. Project
financing, gas supply contracts and power supply deals will all be
wrapped up in the second and third quarters of 2000, according to
Calpine's Sutter project manager, Curt Hildebrand.
Calpine's proposed $310 million, 500 MW natural gas-fired,
combined-cycle plant incorporates various environmental measures
that have leapfrogged it into first place over an earlier proposed
desert-based project in Southern California that is sponsored by
Baltimore Gas and Electric Co.'s affiliate Constellation Power
Development. The latter plant's water requirements and more recent
decision to include a second, 30-mile natural gas supply pipeline
from Kern River-Mojave have caused its slowdown for further
environmental and local permitting considerations in the high
desert, 100 miles northeast of Los Angeles.
California Energy Commission sources, which have to approve all
new merchant power plants, speculate that a project in the Kern
County 40 miles west of Bakersfield most likely will be the second
one started. The $500 million, 1,045 MW, gas-fired plant, called La
Paloma, sponsored by US Generating Co. enters the hearing phase
this month. Both Sutter and La Paloma will require new 230-KV power
transmission lines to connect with the state's transmission grid.
Calpine also needs a 16-inch-diameter, 14-mile pipeline to tie-in
to PG&E's gas transmission system. La Paloma needs only a
370-foot link to tap into the nearby Kern-Mojave interstate natural
gas transmission pipeline.
With seven other merchant plants, totaling nearly 4,000 MW also
in the state application process, and another dozen on the drawing
boards, state energy commission officials are downplaying how much
of Calpine's environmental concessions may be required of other
proposed projects. Calpine's concessions on water and other
environmental factors added $25 to $35 million over its original
estimates two years ago.
"I think Calpine has shown that these are feasible measures,"
said Roger Johnson, energy commission siting program manager. "I
doubt that they will become a requirement, but if there are similar
types of problems with other projects, they could bear some weight
on those projects.
"For the High Desert project I think it is being looked at a
little more seriously now because of the water problems being
encountered there." While environmental requirements may get
stiffer, regulators and power plant proponents are all still
assuming that the first eight project proposals will all get built
one way or another. But for the short term, Calpine appears to have
the only sure thing.
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