SDG&E’s got a gas problem

Will San Diego Gas & Electric bulldog through their Carlsbad plan?

Encina power plant (building with tall stack)
  • Encina power plant (building with tall stack)
  • Imagery © 2015 Google

Efforts by San Diego Gas & Electric to push through a new gas-fired power plant in Carlsbad fly in the face of instructions from the California Public Utilities Commission, Sierra Club lawyers contend. “Under the state’s clean energy policy, which the San Onofre decision reiterated, you’ve got to look to clean energy first before you go to gas,” explains Matt Vespa, counsel for the Sierra Club. “And obviously they didn’t do that.”

Before joining the Sierra Club as a clean-energy expert, Vespa spent several years with the Center for Biological Diversity. From his office in San Francisco, he refers to a July 2014 application submitted by the utility to the California Public Utilities Commission seeking approval for the Carlsbad Energy Center, a 600-megawatt gas plant set to be sited next to the aging Encina Power Station. Situated on the Carlsbad coast, Encina was commissioned in 1954. It’s owned and operated by NRG Energy, a Texas-based energy consortium that also seeks to operate the newly proposed facility.

On March 13, 2014, the commission adopted a plan allowing the utility to add between 600 and 800 megawatts of power to the local electric grid to replace energy lost from the demise of San Onofre Nuclear Generating Station. San Onofre permanently ceased operations in June 2013 after being in a state of emergency shutdown for over two years following the failure of tubes carrying radioactive steam.

Proposed Carlsbad Energy Center (area with the 4 larger circular structures)

Proposed Carlsbad Energy Center (area with the 4 larger circular structures)

Imagery © 2015 Google

The commission’s decision was part of Track 4 of the Long-Term Procurement Plan, a complex document that outlines the procedures for replacing the roughly 2200 megawatts — enough to power 1.7 to 2.2 million homes — of generation lost with the retirement of San Onofre. It’s unprecedented in that it calls for new power to specifically rely upon “preferred” resources, including energy efficiency, demand response (including “peaker” power plants such as what’s proposed at Carlsbad, able to start producing power quickly in times of high demand and ramp down at other times), and energy storage (capable of holding excess power, such as that produced by solar systems on sunny days, for distribution later), giving these sources preference over traditional fossil-fuel-powered plants, particularly those designed to run continuously.

San Diego Gas & Electric was specifically instructed to source at least 200 megawatts of new power from clean energy like renewables, with an additional 300–600 coming from any source. The utility issued an “all-source Request for Offers” from prospective providers in September 2014. But that was months after the utility submitted the proposal for the Carlsbad gas project, which by itself is slated to fill the full 600 megawatt “any source” portion of the allotment, leaving nothing but the mandated minimum for clean-energy projects. In fact, NRG’s bid to build Carlsbad wasn’t included as part of the request for offers the utility sent out.

What was included, however, was a full 14,494 megawatts’ worth of proposals, enough to replace the entire generating capacity of San Onofre seven times over. It’s unknown, however, how much of that power is from the “preferred resources” as laid out by the commission.

“SDG&E filed everything confidentially, and now we’re fighting over what we can make public,” Vespa explains. “All we got was total megawatts bid in, and what we wanted was a breakdown between clean energy and gas.”

The Sierra Club filed a 17-page brief in December 2014 arguing that the utility’s pushing for approval of the Carlsbad project violates the spirit of the Track 4 decision because it fails to give preference for green solutions to fill the entire void left by San Onofre, which produced no carbon pollution.

“What we’d like to see is all feasible clean energy and energy storage built first, and if there’s a remainder then let’s fill that with gas,” Vespa continues. “It’s just a better investment for the future. We know we’re going to need to de-carbonize, and we’ll have more renewables coming on the grid, so if you invest more in storage now, that’s a resource that will be needed to integrate renewables.”

Vespa leaves open the idea that a Carlsbad gas plant could still be a part of the overall energy mix for San Diego. In his Sierra Club brief, he bemoans that proposals to scale down the size of the facility to, say, 400 megawatts, were dismissed immediately by San Diego Gas & Electric as being “too expensive” to be worthy of consideration.

“They could always contract for less than the full 600. What bothers us is that they didn’t even ask how much a smaller facility might cost, to give some room for some competition for some of the remaining allocation.”

The utility, the Sierra Club says, is also trying a different tactic to push for approval of Carlsbad Energy. San Diego Gas & Electric says it’s needed to replace the neighboring Encina plant, due to go offline in 2017 as the antiquated “once-through cooling” method of pumping seawater through the plant and then back into the ocean is abandoned due to concerns for marine life. “The fact of the matter,” Vespa objects, “is that Encina’s retirement was dealt with last year, and that’s how Pio Pico got approved.”

The new Otay Mesa facility, approved as part of a separate commission proceeding last February despite opposition from neighbors and environmentalists, would provide 300 megawatts of natural-gas-fueled power on demand.

Vespa insists that the two matters are completely unrelated and that the Encina issue has no place in the San Onofre debate. “It’s about replacing San Onofre — that’s what this authorization is for. At one time, SDG&E didn’t say a thing about needing to replace Encina, it was all about San Onofre.... I think it’s really a red herring.”

Opponents of the Carlsbad plant received what appeared to be a gift from the commission on March 6 in the form of a proposed decision rejecting the utility’s application. The utility has until June to identify a “short list” of potential projects to fill at least the minimum “preferred resources” requirement, possibly more if the plans for Carlsbad fall through. Vespa is happy, but says in an email trumpeting the news. “Looking ahead, we still need Commissioner [Michael] Picker and the [commission] to uphold the decision. This is an opportunity for the commission to regain public trust during a time when they have shown favoritism to utilities.”

It didn’t take long for San Diego Gas & Electric to respond, however. Rather than waiting for a final decision, the utility and NRG amended the proposal on March 20, seeking permission to build a slightly scaled-down, 500-megawatt gas plant if the proposed 600-megawatt version is indeed rejected, as appears likely. They’re requesting a complete rewrite of the preliminary decision.

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So? SDG&E is a corrupt corporation in bed with the corrupt CPUC so what is the problem? No matter what happens the rates will go up.

SDG&E along with the CPUC and of course SCE need to realize that SoCal ratepayers are no longer going to stand for being ripped off by our Public Utilities and their State Regulators who have been so cozy in their behind the scenes dealings, that many are now not at all surprised that their proposed pro-utility settlement is being appealed by Michael Aguirre's office. Tip of the hat to the SD Reader for keeping this story in the public's spotlight, since so many of SoCal's MSM and elected Leaders have chosen to either look the other way or downplay the importance of SCE's multi-billion dollar debacle at San Onofre.

Note: the Carlsbad plant issue was originally to be heard by the CPUC tomorrow - that decision has been pushed back to a May 7 meeting, possibly to consider the scaled-down version of the plant SDG&E first claimed was financially implausible, then proposed following the recommended 600 megawatt rejection.

It goes without saying that SDG&E could enable all owners of rooftops to install solar panels through an ultra low interest loans which would make this project unnecessary, especially during daylight hours when the most energy is used but they will never do that since it would cut into their shareholders profits. At some point cleaning up the air quality in SoCal should trump Utility shareholders profits, since that is a State mandate, yet the CPUC always looks the other way, I wonder why that is?

It is past time for all ratepayers to demand that both the CPUC and the Utilities they regulate offer to enable as much non-Utility owned generation as possible, since then ratepayers could not only help provide a solution to our future Energy needs, but also reduce our dependance upon distant generation that has shown itself to be problematic especially during earthquakes, wildfires and other disasters.

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