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Calpine Expands California Power Plant, Gas Network

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 Hub Properties.

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&ampE's utility transmission system, requiring that Calpine pay transportation charges.

Richard Nemec, Los Angeles

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ISSN © 2577-9877 | ISSN © 1532-1266
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