California regulators last Thursday agreed to shut two natural gas-fired electric generation units along the Southern California coast as a means of facilitating the development of a new gas-fired facility inland in eastern Los Angeles County.
The action is significant, involving two of the nation's major independent power producers, AES Corp. and Edison Mission Energy (EME), part of the independent generation unit at Rosemead, CA-based Edison International.
Earlier this year AES transferred ownership of its Units 3 and 4 at its 900 MW gas-fired Huntington Beach complex to EME, with an agreement for AES to lease back the units from the Edison company. Subsequently, EME and AES will close the two units, combined representing 450 MW of capacity, around Nov. 1, 2012.
The two units that will be retired now use once-through cooling, which the state is phasing out over the next decade. They will provide EME with the emissions credits it needs to complete its plans to build a new 500 MW gas-fired combined-cycle plant, Walnut Creek Energy Park, in the City of Industry, about 30 miles east of downtown Los Angeles.
Walnut Creek was approved by the California Energy Commission three years ago and has been held up, pending resolution of the emissions credits. The project was originally targeted for commercial operation in August 2008.
The CPUC resolution said the new plant will offset the loss of the two units at Huntington Beach, and the California Independent System Operator (CAISO) has indicated that the switch from the old to the new units will not create any reliability problems. Both plants fall within what CAISO designates as its Los Angeles Basin West Local Reliability Area.
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