Southern California Public Power Authority's Magnolia Power Project earns POWER's highest honor

Power, Sep 1, 2005 by Peltier, Dr Robert

The Magnolia Power Project, a 310-MW combined-cycle plant in downtown Burbank, proves that "urban load-centered generation" is indeed practical, if the right pieces are put in place. SCPPA financed and owns Magnolia on behalf of six of its member municipal utilities. When water disposal concerns threatened to derail the project, SCPPA reclaimed wastewater for plant cooling and makeup purposes and put in a zero liquid discharge system. For helping to narrow southern California's looming capacity gap in an innovative, cost-effective, and environmentally sound way, the Magnolia Power Project is POWER magazine's 2005 Plant of the Year.

The fallout from California's electricity crisis of 2000/2001 continues to be felt four years later. The state's deregulation bomb was built by mixing equal parts price regulation, plant construction delays, regulations prohibiting long-term wholesale power supply contracts, and gross mismanagement by public officials. The fuse was lit by the market-fixing shenanigans of a few traders, and consumers took the brunt of the blast.

But Californians are a resilient lot, and their future now seems brighter with a larger-than-life governor, a solvent Pacific Gas and Electric Co., renegotiated long-term supply contracts, and the commissioning of a few new power plants. However, the state's energy future still is clouded by the lack of a comprehensive planning approach for new generation.

A quick analysis of data from the California Energy Commission (CEC) web site reveals the depth of the problem. Since the advent of deregulation in 1996, the CEC has approved 53 new plants with a total capacity of just under 22,000 MW. Only half (27) of these projects have been completed, representing 9,808 MW currently in service and another 1,825 MW due to come on-line soon, in time for this summer's peak demand. On the surface, these numbers are appealing, but their beauty is only skin-deep.

Too little, too late

A closer look at CEC figures reveals recent downturns in project applications and capacity expansion. Since October 2003, only four new projects totaling 541 MW were submitted for approval. And no new CEC-approved projects went on-line in 2004. According to CEC data, only 13 projects totaling 4,867 MW of capacity will be ready to be commissioned by 2008--not nearly enough for a state whose annual load growth is 4% and whose summer peak demand exceeds 45,000 MW.

Exacerbating the problem, California's electricity supply system is old (40% of power plants in the state are at least 40-something), and its reliability continues to rely heavily (20% in 2004) on kilowatt-hours imported from nearby states. As a result, the impact of anticipated new capacity must be put in context. For example, the unfinished 1,050-MW Mountainview Project that Southern California Edison (SCE) bought from AES early last year and is hurrying to complete by later this year will just offset the planned retirement in 2006 of SCE's 900-MW share of the coal-fired Mojave Generating Station.

As you can see, planning California's electricity future is as frustrating as trying to assemble a jigsaw puzzle with several pieces missing. Even worse, occasionally, pieces thought to be in place suddenly disappear. Here's one example: This year's first Southern California Stage II power alerts were broadcast on July 21 and 22 when 2,000 MW were lost when a Utah plant tripped unexpectedly. At the time of the loss, an estimated 4,798 MW of in-state capacity were out of service, dropping the region's reserve margin for hot-weather conditions to near zero. CEC projections indicate that Southern California's operating reserves could dip to -15% by 2009--well below the desired 7% margin.

Public power serves its people

Looking forward, the good news for some Californians is that the state's public power systems remain in control of their destiny. Marcie Edwards, president of the California Municipal Utilities Association (CMUA) and general manager of the Anaheim Public Utilities department, says, "California's publicly owned utilities take their mandate to plan for their customers' needs very seriously. While the state's investor-owned utilities were in turmoil, public power entities were insulated from the deregulation fiasco and continued to focus on what they do very well: generating and delivering electricity." According to the CMUA, California's publicly owned electric utilities serve nearly 30% of California's load and are expected to average 23% to 26% reserve margins this summer.

Like privately owned systems, public power utilities have at their disposal several strategies for serving consumers efficiently and cost-effectively. To meet those goals, one generation option long favored by planners is siting new plants closer to demand centers. Known as load-centered generation (LCG), the strategy would appear ideal for replacing generating units that are being retired at urban sites. In theory, LCG has the potential to reduce the complexity of an already tedious plant siting process by reusing a brownfield site and its existing T&D connections and auxiliaries. But in practice, NIMBY (not in my backyard) syndrome has often made such sites "off limits" to any new plant, even one that will operate very cleanly.