PG&E Power Plant Plans Pass One Test, Face Many Others in AZ
PG&E Corp. is the latest energy giant to seek a toehold in
the fast-growing Arizona merchant power plant market, gaining an
initial state approval last week, but facing up to a half-dozen
county, state and federal environmental reviews for a proposed $500
million, 1,040 MW natural gas-fired plant near Phoenix.
Obtaining an environmental compatibility certificate from the
Arizona Corporation Commission "is certainly a green light" along
the path to construction of the plant," said Patrick Hurston, a
Bethesda, MD-based spokesperson for PG&E Generating Co., which
proposed to build and operate the facility. It envisions selling
power in the fast-growing, three-state market of Arizona, southern
Nevada and southern California.
Construction could start as early as the end of this year,
according to the spokesperson, but the target start-up date is the
latter half of 2003. Other approvals include county planning and
environmental services reviews; state land development (for rights
of way) and environmental quality agency (aquifer protection
measures); and the U.S. land management bureau.
"There are at least four or five more steps in the process along
the way, but this was a big hurdle that we have overcome, so we are
hopeful we can get on an aggressive timetable with the rest of
these," Hurston said.
The proposed plant will be near major interstate natural gas
pipelines from the Southwest and major transmission lines serving
the three-state area and northern Mexico. With a fuel requirement
averaging about 180 MMcf/d, PG&E will have firm transportation
agreements and then play the markets in the West and Southeast,
according to a Houston-based manager in the national energy group,
"We don't have any one particular area dedicating supplies out
of --- they could come from the Rocky Mountains, Permian Basin, San
Juan Basin or Gulf Coast supply areas," Tramuto said. "We'll trade
and price the most economically attractive supplies we can get into
Environmental issues --- not fuel supplies --- are the biggest
challenges. "The most sensitive issue, as you can imagine, is water
supply," said Hurston, noting that PG&E has agreed to use water
from the Central Arizona Project. The plant will follow what
PG&E characterizes as "much more stringent" restrictions on
groundwater use even though it characterizes the Harquahala Valley
as "an area with extensive groundwater supplies."
Richard Nemec, Los Angeles
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