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California Regulators Challenged on NatGas-Fired Generator Plans

Calling it a "carbon-polluting power grab," Earthjustice on Monday filed an appeal challenging the California Public Utilities Commission's (CPUC) approval of a key agreement to repower an existing natural gas-fired generation plant site in Carlsbad, CA.

The appeal by the environmental group, filed in the First District Court of Appeal, challenges CPUC’s approval of a tolling agreement by Sempra Energy's San Diego Gas and Electric Co. (SDG&E) with NRG Energy Inc., which operates the existing gas-fired generation plant. The appeal focuses on a ruling by a CPUC regulatory judge that renewable energy alternatives were available instead of the approved plan to build a series of gas-fired peaking plants (see Daily GPIMay 27).

The CPUC approved SDG&E's power purchase and tolling agreement with Princeton, NJ-based NRG's proposed Carlsbad Energy Center, a five-unit, 500 MW gas-fired peaking plant that would replace an outdated existing baseload generation plant at the site. Environmentalists criticized the 4-1 vote of approval and said regulators had not taken the time to determine if a series of renewable energy projects could provide the power supplies called for in the 20-year deal.

Ultimately, the CPUC decided the gas-fired generation was needed for reliability as the state moves to more reliance on intermittent solar and wind power sources.

Last August, the California Energy Commission approved the long-stalled plans to transform part of the existing 95-acre site into a state-of-the-art gas-fired peaking facility, leaving two-thirds of the site for future commercial development. Earthjustice, representing the Sierra Club, is challenging the CPUC’s role in the approval process.

NRG is ready to begin building the project but won’t start construction until it has an "unappealable decision" from the courts, a Houston-based spokesman told NGI on Wednesday.

The company "appreciates the CPUC's continued confidence in its final decision that the Carlsbad Energy Center is the best approach to have the appropriate, flexible capacity online by 2017." He said it would allow additional renewable generation projects to be added in the region while “preserving the reliability of the grid.”

"We need judicial review to ensure that the CPUC is not only complying with the law, but also making the best decisions in the interest of the people," said Earthjustice attorney Will Rostov. He accused regulators of contradicting the state’s clean energy objectives. Earthjustice further contends that the proposed Carlsbad project is "out of line" with San Diego's commitment to clean energy and joint plans with other cities in San Diego County to eventually use 100% renewable energy.

The CPUC had no comment on the appeal.

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