CA Merchant Plant Survives Court Challenge
The first merchant electric generating plant proposed following
industry restructuring in California more than three years ago
finessed a crucial court challenge Tuesday and moved toward a
construction start-up early next year on a $300-350 million, 700 MW
plant on a former Air Force base in the high desert 75 miles
northeast of Los Angeles.
An interceder's petition for the state Supreme Court was turned
down, making final the project's authorization by the California
Energy Commission last May.
By far the most complex merchant plant siting so far, because of
water, air quality and natural gas requirements, the High Desert
Project, sponsored by Constellation Power Source, a non-utility
affiliate of Baltimore Gas and Electric, and Newport Beach,
CA-based developers who formed High Desert Power Project, LLC, back
in early 1997, is within a few days or weeks of obtaining federal
environmental approvals from a half-dozen agencies. "We have
completed the environmental impact statement (EIS), so we know what
all the permits will look like," said Andy Welch, project director
since its inception. "But they still haven't been issued yet."
The project now calls for a 32-mile natural gas pipeline that
will be built by Southwest Gas Corp. to interconnect with both the
PG&E and Kern River pipelines that traverse the area. A
7.3-mile transmission line also will be built to connect with the
230 kv Victor Substation.
Welch said once the federal permits are in hand, his firm will
arrange for financing, something he appears certain will come
together before the end of this year. Lurking in the background,
however, is the current statewide debate on the future of
California's electric restructuring due to the volatile wholesale
prices and resulting rate shock on retail customers in San Diego.
Welch said High Desert is ready to finally break ground early
next year for an anticipated 27-month construction timetable that
estimates having the plant operable by the spring of 2003.
"We're watching (the restructuring debate) with interest," Welch
said. "At this point, we still believe the deregulated market will
continue, and state officials are not going to do something rash.
Nevertheless, we haven't financed the project yet, so we still
haven't made irreversible commitments. We're still optimistic at
Richard Nemec, Los Angeles
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