Construction to Start Early Next Year on 300-Megawatt Peak Generator Near San Diego

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--California regulators awarded a construction permit to the Pio Pico Energy Center, a 300-megawatt (MW), grassroot, gas-fired peaking plant located southwest of San Diego. The project, named for the last governor of California when it was still a province of Mexico, is scheduled to begin construction next March and begin operating by May 2014. The California Energy Commission (CEC) (Sacramento, California) approved the project last month. When completed, the $300 million generator will sell its electricity to San Diego Gas & Electric (SDG&E) (San Diego, California), a unit of Sempra Energy (NYSE:SRE) (San Diego, California).

"This power plant will be able to respond quickly and follow load fluctuations in the San Diego area when power demand is high," said CEC Commissioner, Carla Peterman, who presided over the committee reviewing Pio Pico.

Pio Pico is being developed by Apex Power Group LLC (South Jordan, Utah). Kiewit Power Company (Lenexa, Kansas) is providing engineering, procurement and construction services to the simple-cycle generator, which is located near the Otay Mesa Generating Project in southwestern San Diego County. Pio Pico will use three General Electric LMS100 combustion turbine generators. An average of 148 workers will be needed during the power plant's construction phase.

Locating Pio Pico about a half mile from a substation operated by SDG&E, and adjacent to the Otay Mesa Generating Plant, means only minimal upgrades will be needed to interconnect Pio Pico to the transmission grid. "We always locate as closely as we can to existing substations and lines," Apex President Gary Chandler said in an interview.

Apex, a gas-fired power developer, also developed the 400-MW Panoche Energy Center, located in California's Central Valley, about 50 miles from Fresno. That project began generating electricity in 2009. Both the Panoche and Pio Pico projects are owned by Energy Investors Funds (EIF) (San Francisco, California), a private equity fund that invests only in merchant power and electric utility projects. EIF has mobilized more than $4 billion in capital raised in eight funds. These funds have made more than 100 Electric Power Industry investments that have an underlying asset value greater than $15 billion. EIF owns more than 3,675 MW of generating capacity in operation and under construction, as well as an additional 2,875 MW under development.

Pio Pico, which has been under development since 2009, will be built on an industrial site to minimize environmental impacts that could have occurred if the project was developed on undisturbed land. Apex Power Group would like to use recycled water to cool the generator, but the Otay Water District's reclaimed water facility is still under construction. Chandler said he doesn't know when the water-treatment plant will be completed.

But that won't slow down construction of Pio Pico, Chandler said. "We will be using a hybrid cooling system at the plant that can use air and whatever water is available--reclaimed water or potable water." There's "plenty" of potable water in the area, he added, estimating it would take about 49 million gallons of water per year to cool the 300-MW plant if it operated 2,000 hours per year and used only potable water. The plant is permitted to use potable and reclaimed water.

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