After navigating California regulatory maze successfully withsome precedent-setting environmental planning, the backers of thefirst new power plant slated for electron-starved San Diego Countystill have some difficult decisions ahead regarding gas supply forthe 500-MW Otay Mesa generating plant.
Supplies of gas still are not lined up, said Susan Segner,project manager for PG&E’s national energy group. She saidPG&E is “negotiating” all aspects of supply and deliveryinfrastructure, including talks with San Diego Gas and Electric.About 80 MMcf/d of supply and transportation needs to be found byPG&E Generating. A connection eventually could be made with aproposed gas transmission pipeline from the California-Arizonaborder south through California to the U.S.-Mexico border and theneast into the North Baja industrial corridor. PG&E and SempraEnergy are proposing the pipeline, which is aimed at generation andlarge industrial loads on the Mexican side of the border. APG&E official indicated it is a potential supply line for theOtay Mesa plant, which is expected to come online in summer 2003.
A second proposed new natural gas interstate pipeline intoCalifornia – Questar’s Southern Traisl project, a conversion of theinactive Four Corners Oil Pipeline running from New Mexico to LongBeach Harbor – is not a possibility, according to PG&E.
PG&E expects final state approvals to start construction byJanuary or February 2001. It made it through California’sregulatory mine field by obtaining an air emissions permit througha $33 million agreement with Waste Management, Inc. to build arefueling station and convert Waste Management’s heavy duty truckfleet to operate on liquefied natural gas (LNG). PG&E willcreate a private LNG refueling station and clean fuel fleet for thewaste hauler with the emission credits going to offset projectedemissions from the power plant, which is near the U.S.-Mexicoborder.
“We believe that reductions on the mobile side are a good policycall, and to the extent it is applicable to other areas of thecountry, we would be open to the concept,” Segner said. “It is avery strategic and important regulatory offset call in thisprogram. We worked a year and a half with the California AirResources Board (CARB), U.S. EPA and the San Diego Air QualityDistrict.”
The deal announced in September reduces air emissions from thewaste hauler’s operations by 50%, according to PG&E, which saidthis is the first power plant project in the nation to offset itsemissions with reductions of mobile sources. San Diego County likemany local governments today manages its air quality within aregulatory framework that requires new sources of emissions to beoffset by reductions from other sources, which normally are otherstationary sources.
The mobile offsets deal broke a permitting stalemate with theCalifornia Energy Commission, the state agency siting new powerplants. Segner said PG&E has made “significant progress” withthe state energy commission since the air district approvals weremade final and permits obtained Sept. 18.
The plant itself will be equipped with state-of-the-art airemission equipment and it will be air-cooled, so use of water willbe kept to a minimum. Otay Mesa will use about 15 acres of the46-acre site owned by PG&E, and Segner said that expansion ofthe generating units longer term could be a possibility, althoughany additions would require added mobile air emission credits asoffsets to permit the added generation capacity. And they wouldrequire added gas supplies, too.
Richard Nemec, Los Angeles
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