Plant adds to state’s power grid but at a steep price |

Plant adds to state’s power grid but at a steep price


PITTSBURG, Calif. (AP) – Gov. Gray Davis condemned out-of-state power generators Monday as he symbolically switched on the largest licensed power plant to come online this year in California.

”We are in a war with generators, mostly out of state, that are trying to bleed us dry,” Davis said. ”Clearly, they don’t have the best interests of California at heart.”

Los Medanos Energy Center is the largest natural gas-fired power plant to come online in California since 1976. It’s also the third plant Davis has opened during the past two weeks, adding more electricity to the state’s power grid than in the past decade – a total of at least 1,400 megawatts, which is enough to power 1.4 million homes.

The plant will be 35 percent more efficient than other plants currently online in the state, Davis said.

Californians will have to pay a steep price for the plant’s electricity at first. The plant will provide 555 megawatts of power to the state’s energy grid, but it will cost consumers $232 per megawatt for 300 megawatt hours during the next three months. One megawatt is enough to power 750 homes.

The state bought those 300 megawatt hours in March to accommodate any initial down time the new plant may experience for testing and monitoring, said Calpine Corp. spokesman Bill Highlander.

After that, the price per megawatt hour will be about $58, an amount well below the $91 per megawatt hour federal price cap for spot market energy imposed July 6, Highlander said.

Davis said the high price of power came down in June, which was the warmest month since the state began buying power in January.

”Even though it was the hottest month, we paid about $100 million less than at any point (this year) prior to June,” he said.

Davis said there were four reasons for the cost reduction.

”We’re bringing more power plants online. We’re conserving power like there’s no tomorrow,” he said. ”Long-term contracts for power during the peak period are kicking in. And the federal government, which has been deaf to our pleas for assistance for more than a year, is finally giving us some price relief.”

Calpine’s Los Medanos facility will be producing at full capacity later this week, said Claudia Chandler, Energy Commission spokeswoman.

Two other plants came online in the state during the past two weeks. Edison’s new 320 megawatt Sunrise Power Plant started running in Bakersfield on June 27. That plant is owned by Texaco and Mission Energy.

Last week, Calpine’s other new facility, the 540 megawatt Sutter Energy Center near Yuba City, also opened.

Chandler said a fourth plant, that will produce 450 megawatts, is scheduled to come online next month in Huntington Beach. That plant is owned by AES.

Talks between California power users and providers over billions in alleged overcharges Davis said generators owe the state ended Monday with no resolution. An administrative judge said the state is probably owed no more than $1 billion, far less than the nearly $9 billion Davis had sought.

The Federal Energy Regulatory Commission ordered the talks last month in an effort to resolve differences between producers and the state over the breakdown of California’s deregulated electricity market.

Besides boosting the state’s megawatt supply, Los Medanos will also provide revenue for the city of Pittsburg. City officials estimate the plant will add between $2 million and $3 million in annual property taxes to the city’s coffers. The plant will also provide power and steam to the USS-POSCO steel plant nearby.

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