NRG Stops Plan for California Gas Plant

NRG Energy has stopped development of a proposed natural gas plant in Oxnard, California, after two state regulators earlier this month recommended the California Energy Commission (CEC) reject the project.

NRG on October 16 asked the CEC to suspend its review of the plans for the Puente Power Project, or P3, a proposed $300 million, 262-MW gas-fired plant designed to replace two units of the Mandalay Generating Station in Oxnard that have used seawater for cooling, a process that now violates a State Water Resources Control Board rule.

The units are scheduled to be decommissioned in early 2021. The power plant on Mandalay Beach was built in 1959; it is currently used as a peaking plant, operating only when demand for electricity spikes. A third unit that does not use seawater will continue operating.

Two CEC members, Karen Douglas and Janea Scott, earlier this month said the full commission should not support the P3 project. “We hereby notify the parties and interested members of the public that we intend to issue a [decision] that recommends denial of the project on the grounds that it creates inconsistencies with LORS [laws, ordinances, regulations or standards] and significant environmental impacts that cannot be mitigated,” Scott and Douglas said.

The commissioners’ statement in advance of a full CEC ruling on the project was considered unusual but was thought to alert NRG and its power purchaser Southern California Edison (SCE) to the likelihood P3 would not be approved, and would give the utilities more time to create a request for offers (RFO) for clean energy alternatives.

The project has been opposed by many residents and officials in Ventura County as well as state lawmakers and environmentalists, including the California Coastal Commission. Opponents said the gas-fired plant would hurt air quality and harm coastal wetlands and dunes, and said renewable energy resources should be considered for the project.

NRG, which has headquarters in Princeton, New Jersey, and Houston, Texas, on Monday asked the CEC to suspend its review of plans for P3 and cancel any hearings on the project. NRG would have owned and operated the power plant, and had contracted with SCE for the power supply. SCE had said the P3 project was needed to help meet electricity demand in the region as other power plants close. NRG had expected the plant would come online in mid-2020.

In a statement prior to Monday’s action, SCE said “While there are potential solutions to the needs addressed by the Puente project, it is speculative to assume that preferred resources can be developed on the scale and at the cost needed to competitively replace the Puente project by 2021.” NRG did not immediately respond to a request for comment.

The California Independent System Operator (CAISO), which manages the state power grid, in August detailed other energy sources as alternatives to the gas-fired plant, though all would come at a higher cost. CAISO issued a statement on September 29 that said clean energy alternatives at the site were “technologically feasible to meet local capacity requirements” and said “the economic feasibility of the preferred resource portfolios can only be established through a new RFO.”

NRG spokesman David Knox in a statement on October 7 said the project should move forward, saying “NRG favors California’s move to a carbon-free electrical grid, but remains concerned about local reliability during the transition.” NRG previously had said it designed P3 to minimize its impact on the environment, since it would be constructed “on a previously disturbed site within the boundaries of an existing power plant, allowing for re-purposing and re-use of the existing infrastructure.”
Darrell Proctor is a POWER associate editor. (@DarrellProctor1, @POWERmagazine)