Calpine Expands California Power Plant, Gas Network
A new nonutility natural gas supply network and some
environmental concessions to local agricultural interests are two
new twists to a major 500 MW merchant natural gas-fired power plant
proposed for northern California in proximity to the Sacramento
Valley gas fields. As a result, the project sponsor, Calpine
Corp., has agreed to invest an additional $20-$25 million in the
estimated $300 million project to use a more environmentally benign
air cooling system at the plant instead of the traditional
water-based evaporative cooling approach.
The move is strictly to assure "local community support," which
includes organized labor and environmental groups, according to Ron
Walter, Calpine's senior vice president for business development.
The air-vs.-water approach eliminates three environmental concerns
in the rural area north of Sacramento: use of ground water,
discharge into the water runoff system and vapor plumes that
develop from traditional evaporate cooling at power plants.
In addition, the proposed plant will stimulate an average 80
MMcf/d natural gas requirement that will be fulfilled by a
combination of Calpine-owned local supplies and a variety of short-
and long-term deals on the open market. Walter noted that about
three-quarters of the gas will come from contracts now being lined
up, some of which he thinks will come from Canadian sources.
Similarly, Calpine is negotiating possible gas storage services
with the two proposed merchant storage operators in the area,
Canadian-backed Wild Goose and U.S. private investor-backed Western
The rest of the gas will come from local sources that Calpine
owns or has contracts for in the greater Sacramento Valley gas
fields and will be delivered through a pipeline system it is
developing. An additional 10-mile pipeline link, Walter said, will
be built to connect existing Calpine-owned gathering and
transmission pipelines in the Western part of the Valley north of
Pittsburg, CA, and another pipeline system connected to supplies it
owns north of Sacramento closer to the proposed power plant, called
the Sutter Project.
Some of the latter suppliers already are serving two existing
smaller (Greenleaf) cogeneration operations that Calpine has in the
Sacramento Valley. Walter said the use of Calpine's gas and
transmission helps make the power projects in the area more
competitive because it avoids the transportation charges on the
Pacific Gas and Electric transmission system and mark-up of the
gas. The Calpine gas also can be non-pipeline-quality supplies and
still be used since it is being used exclusively for power
production, Walter said.
However, the supplies being negotiated on the open market as a
portfolio of supplies-spot and longer term-will be shipped through
PG&E's utility transmission system, requiring that Calpine pay
Richard Nemec, Los Angeles
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