Backers of the Elk Hills Power Plant in the western edge of the San Joaquin Valley’s oil patch held groundbreaking ceremonies Monday –on a 570-MW gas-fired plant in the midst of plentiful local gas supplies. The plant’s sponsors are Occidental Petroleum (Oxy), which owns the nearby Elk Hills oil/gas production fields once a part of the U.S. Navy’s Strategic Reserves, and Sempra Energy. The new plant will get all of its fuel supplies — up to 94 MMcf/d — from nearby Elk Hills, delivered through an Oxy pipeline, eliminating the normal utility transportation charges.

No contracts are in place for its output — all of which is now mandated by state law to be sold in California — but a Sempra spokesperson said negotiations are currently ongoing with several potential buyers, which could include the state department of water resources (DWR). The plant will pay Oxy “market-based competitive rates” for the natural gas supplies, the Sempra spokesperson said. The sponsors will also build a nine-mile, 230-KV transmission line to connect the plant, which is about eight miles from the oil/gas town of Taft, CA, to the state’s grid.

In another part of the state, Duke Energy reported that its $500 million modernization of its Moss Landing Power Plant along the central California coast is proceeding on schedule, and that it will double the work force to 800 this summer as a means of assuring the expanded 2,560-MW plants will be operational next summer, becoming the largest single power plant in the state, 260 MW larger than Pacific Gas and Electric Co.’s Diablo Canyon Nuclear Plant.

In response to a question about FERC staff’s proposed sell and price cap requirements during Stage Three power alerts, California Gov. Gray Davis Monday said it is “a step in the right direction” and he could be supportive, but third-stage alerts are inherently chaotic. He went on to add that the word “Regulatory” is part of FERC’s title and charge, but so far it has been “unwilling to regulate anything.” The federal regulators need to finally do something to mitigate wholesale price spikes, he said.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.