San Diego Gas & Electric (SDG&E) on July 21 formally requested permission from the California Public Utilities Commission (CPUC) to enter into a power purchase agreement (PPA) with NRG Energy for up to 633 MW from the proposed Carlsbad Energy Center.

The move is what SDG&E and NRG hope is the last chapter in a long-running effort to replace the 1950s-era Encina Power Station with a modern gas-fired plant. NRG first proposed building a 540-MW two-unit combined cycle plant on the site in 2007, but this plan drew stiff opposition from the City of Carlsbad because it left open the possibility that the newest units at the five-unit Encina plant—which came online in the 1970s—might continue operating. The 400-foot stack at Encina has been, in the eyes of most local residents, an eyesore since it went up with those units, and the city was not prepared to have it joined by another power plant.

Another Try

The dispute dragged on until 2012, when the California Supreme Court rejected the city’s appeal of the California Energy Commission’s (CEC’s) decision granting the proposed plant an operating license. That appeared to clear the way for the new plant, until the CPUC announced a new rulemaking process to decide what to do about the retirement of San Onofre Nuclear Generating Station (SONGS) in 2013. That plant produced 2,200 MW from a site about 20 miles north, and the loss of its power meant a major reassessment of the region’s needs.

In August 2013, the CPUC proposed authorizing SDG&E to purchase up to 600 MW of new conventional capacity by 2017. The only plant that size that could, realistically, be built fast enough was the Carlsbad Energy Center—provided the city stopped trying to block it. (Though the decision on the license was final, other litigation could have caused further delays.) That meant getting the city on board with a design it could live with.

Smaller, More Nimble

In the fall of 2013, SDG&E, NRG, and the city came up with a new proposal: The two large Siemens combined cycle units would be replaced with six General Electric LMS100 combustion turbines. Though capacity would increase to 600 MW, the new design would have a lower profile and smaller footprint that would alleviate the city’s concerns about emergency access to the narrow site along Interstate 5.

The baseload role envisioned for the original design would become a peaker plant that would be barred from operating between midnight and 6 a.m. And—most importantly for the city—NRG would commit to retiring and demolishing the entire Encina plant by the end of 2017. (Something it was almost certain to do anyway, since the plant has to cease using once-through ocean cooling by that date.)

NRG is fully on board with the revised role for the plant. Ahmed Haque, director of asset management for NRG, told GAS POWER, “You’re going to see more peaking type facilities that are more flexible” in California.

“The nature of the need is changing,” he said, as California brings more and more renewable generation online. That means added responsibility for generators, but one NRG is eager to take on. “We want to showcase sustainable development,” Haque said.

In January, the Carlsbad City Council voted to accept the deal, and SDG&E filed its proposed resource procurement plan with the CPUC in March. That plan was approved on July 18, and the request to approve the PPA was filed three days later. SDG&E is requesting expedited approval no later than Dec. 18, 2014, in order to keep the project on track for a late 2017 startup. The CEC conducted a hearing in Carlsbad on Aug. 7 in which several city officials also urged approval.

“The settlement agreement is a great example of what can be accomplished when we work together for the benefit of the public,” Carlsbad City Councilmember Mark Packard said.

Some opposition to the plant remains, though. The CPUC plan following the retirement of SONGS requires SDG&E to secure 800 MW of generation, of which 200 MW must be renewables with the remainder being unspecified. The Sierra Club and other organizations have argued that SDG&E is required to consider renewables first before contracting for conventional generation, but the CPUC appeared to reject that argument in its July 18 decision.

—Thomas W. Overton is a POWER associate editor. 

[This story has been updated with additional details about the new plant.]