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Calif. panel leads toward rejection of NRG gas plant

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Calif. panel leads toward rejection of NRG gas plant

A panel overseeing review of NRG Energy Inc.'s proposed Puente project intends to recommend that that the 262-MW gas-fired plant be denied.

California Energy Commissioners Janea Scott and Karen Douglas on Oct. 5 issued an "unusual" statement about the status of their deliberations over the project, which would be built in Oxnard, Calif. The plant, referred to as the Mandalay Generating Station CT (Puente Power Project) by S&P Global Market Intelligence, is intended to help shore up reliability, as roughly 2,000 MW of gas-fired generation is due to retire by 2021 under the state's once-through cooling water regulations, but has faced pushback from the local community.

In the statement, the commissioners said that while a proposed decision is still in the works,"it is clear to us that the project will be inconsistent with several laws, ordinances, regulations of standards (LORS) and will create significant unmitigable environmental effects."

This, in turn, requires consideration of feasible alternatives that avoid or reduce those impacts and inconsistencies, the commissioners said.

The statement references a Sept. 29 letter from the California ISO noting that preferred resource alternatives to the project are technologically feasible. The grid operator earlier this summer had concluded that there are ways to meet reliability in a portion of Ventura County, Calif., without the Puente power plant but likely at a much higher cost.

In its recent communication to the commissioners, CAISO said economic feasibility of alternatives can only be determined through a new request for offer process. That process would have to be sped up to make sure that plants required to retire under the once-through cooling regulations do so on time.

The commissioners said there is no current information about whether an expedited request for offer is forthcoming, but the timing constraints identified by CAISO prompted them to let stakeholders know of their position before a proposed decision is complete.

"We cannot recommend approval of a project that creates significant unmitigable impacts or is inconsistent with LORS unless we make the override findings required by law," the commissioners said. "That decision is entirely discretionary and allows the Energy Commission to consider the balance of any project benefits against the impacts the project will cause. On the record currently before us, we are unwilling to override the significant impacts or LORS inconsistencies."

NRG spokesman David Knox said the company is disappointed.

"We believe the record fully supports the approval of Puente," he said. "NRG favors California's move to a carbon-free electrical grid, but remains concerned about local reliability during the transition."

The commissioners said once the proposed decision is issued, a conference will be held to receive comments and determine whether any revisions are required. The panel will then forward the proposed decision, or a revised proposed decision, to the entire energy commission for consideration at a public hearing.

The full commission will have the opportunity to accept, reject or modify the proposed decision's conclusions, the statement said. (California Energy Commission Docket No. 15-AFC-01)