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California Summer Power Looks Good; More Gas Plants Coming
Southern California Edison Co. (SCE) officials said Southern California power supplies will be adequate through the summer, and as many as three new or upgraded natural gas-fired plants with a total of more than 1,800 MW are scheduled to begin operations by the end of September.
Echoing a recent summer outlook by the California Independent System Operator (CAISO), SCE’s Charley Wilson told NGI that “there are sufficient system-wide resources to cover all of the adequacy requirements, so long as the transmission lines and large generation resources remain available.”
State and utility officials for a second consecutive summer are scrambling to make up for the 2,200 MW of capacity that sits idle at San Onofre Nuclear Generating Station (SONGS) in San Diego County. SCE has 80% ownership and is operator, while Sempra Energy’s San Diego Gas and Electric Co. as a 20% stake. SONGS is the largest baseload source of electric generation in Southern California, but both units have been shut sinceJanuary 2012 because of unusual wear on tubing on four steam generators.
“The reality now is that we have to plan for SONGS not being there, and the question becomes how do you replace those 2,200 MW?” Wilson asked. “How do you keep the voltage up in a high-load, very important area such as Orange county?” Other than SONGS, there is no baseload electric generation in Orange County.
The three new and upgraded gas-fired plants are adjacent to Orange County, but not within its borders. They are the repowered NRG Energy Inc. El Segundo plant (560 MW) in coastal Los Angeles County; the Walnut Creek peaking plant (500 MW) in the City of Industry also in Los Angeles County; and the 800 MW CPV Sentinel peaking plant in the Coachella Valley in Riverside County.
“Each of these plants supply new capacity, but they don’t supply the type of voltage support in Orange County that is necessary, and both SONGS or [the idled] Huntington Beach gas-fired generation plant units would have provided when they were running,” Wilson said. “Realistically, one of the questions that has to be answered [longer term] even with high-efficiency gas-fired baseload units, involves the fact that you still have to get air quality permits” from the state’s South Coast Air Quality Management District.
All of the new plants are available currently, he said, but SCE contracts don’t kick in until August. In the meantime, CAISO could call on one or all them for supplies in a high peak-load situation. “The plants are in final testing, and everything is ready to go from what I have heard,” Wilson said.
In the meantime, Sen. Barbara Boxer (D-CA) and others are politicizing the almost 18-month shutdown of SONGS, according to Edison International CEO Ted Craver, whose company is SCE’s parent. He told financial analysts in New York City last week that the “favorable economics” for restarting the plant are diminishing with the passage of time and no action by federal regulators. In SONGS absence, SCE is running up a bill that approached about $500 million at the end of 1Q2013 for purchasing replacement power supplies, mostly from gas-fired generation.
The U.S. Nuclear Regulatory Commission (NRC) continues to review SCE’s request to restart Unit 2, but Boxer last week released 2004 letters from an Edison utility executive that she said should cause tthe Department of Justice to investigate possible wrongdoing by the utility. Boxer is questioning SCE’s handling of regulatory requests for its 2008-09 changeout of four steam generators at the two SONGS units.
“We’ve clearly signaled that we cannot wait indefinitely for a decision to restart Unit 2,” Craver said at the Sanford C. Bernstein & Co. Strategic Decisions Conference 2013. “As time marches on, the fact that a safe restart of the unit would be in the most economical for our customers becomes a diminishing advantage compared to other approaches, such as buying power on the open market or building new generation and transmission.”
Craver was asked if state regulation was becoming more troublesome, but he deflected that, saying that most of the “politicization” of SONGS was not from the California Public Utilities Commission. “Elected officials, however, have more of a responsibility and may have more of a need to respond to these issues.” Boxer has “weighed in heavily” and “raised a number of issues concerning the wisdom of restarting the plant.”
SCE’s handling of the new steam generators was “nothing unusual or untoward; we did what the industry has been doing for some time,” Craver said. Further, he won’t “trade barbs” with Boxer regarding allegations of the utility “intentionally misleading” the NRC.
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