California energy officials declared another power alert Mondayas statewide electricity reserves threatened to dip below 7% in theface of near-record cold weather power demand and more than 11,000MW out of service, about 4,000 MW of which were on an unplannedbasis. Part of the unplanned loss of generation capacity wasattributed to a transmission breakdown in the San Joaquin Valley onpart of Pacific Gas and Electric Co.’s system.

Ironically, on Wednesday the California Energy Commission, theagency responsible for approving all new power plants of 50 MW orlarger capacity, will meet to decide whether to follow staffrecommendations that will further slow down development of newshort- and long-term generation. On the energy commission agendaare items to further delay as “data inadequate” a revised,two-year-old proposal by Duke Energy to modernize its Morro Baypower plant into a totally new 1,200 MW facility, and the last ofproposed temporary peaking plants by San Jose-based Calpine Corp.is recommended for rejection.

By declaring the alert, California’s independent transmissiongrid operator (Cal-ISO) noted that it expected a peak demand latein the afternoon of 34,267 MW, nearing the state’s all-time recordwinter peak of 34,432 MW. The majority of the idle generatingcapacity (7,000 MW) was on planned maintenance and could not becalled back into service, a Cal-ISO spokesperson said. Other lostcapacity was due to air emission credits running out for the year.

Meanwhile an energy commission announcement late last week said,”If energy commissioners vote to accept the Executive Director’srecommendation (at their business meeting Wednesday), review of theproposed Morro Bay Power Plant will be postponed until Dukeprovides additional information.”

On Oct. 23, 2000, Duke submitted plans for a 1,200 MW powerplant “modernization” at its existing 1,030 MW facility in the Cityof Morro Bay, in San Luis Obispo County. Since then Commissionstaff has been examining the application to see if it containsenough detailed information for an assessment of the project toproceed. Based on the staff’s recommendation, Steve Larson, thecommission’s executive director, has recommended to thecommissioners that the application not be accepted as ‘dataadequate’.”

To be considered “data adequate,” the energy commission said, anapplication must include detailed information in 23 technicalareas. Energy commission staff found that Duke Energy’s Morro Bayapplication is incomplete in eight technical areas, including airquality, land use, traffic and transportation impacts, visualresources, cultural resources, socioeconomics, water resources, andtransmission system engineering.

At the same meeting, the energy commission will decide whetherto go along with another recommendation to reject the onlyremaining Calpine proposal for a temporary peaking power plant tobe reviewed under a newly developed four-month fast-track stateapproval process in order to get more peaking power on line fornext summer. Calpine was proposing an 86 MW peaker at theWarnerville Substation in northern California connected to apublicly owned hydroelectric system.

If it is rejected as recommended, the only remaining fast-trackpeaking plant proposal still alive will be a 51 MW unit proposedfor San Francisco International Airport by El Paso Merchant Energy.It is also on the agenda for energy commission action Wednesdaywith a recommendation to approve it moving ahead in the four-monthreview process.

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