Kern County 3,194 MW Power Up Being Placed in Uncertain Market

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). The California Energy Commission (CEC) is looking to commissioning three of five new power plants in Kern County California that have been in planning, development, and construction since the beginning of the decade. The total power capacity of all five plants would be 3,194 MW.

La Paloma station, sited near McKittrick in Kern County is now generating 562 MW of electrical power and the commissioning of the second two Alstom (PARIS:ALSO, NYSE:ALS) (Paris, France) GT24 combustion turbines with associated facilities and systems is expected within a month completing the 1,121 MW of total output specified. The $500 million power plant, approved by the California Energy Commission in late 1999 was originally scheduled to go online around the beginning of 2002. The project developer PG&E National Energy Group (Bethseda, Maryland) has secured long-term contracts for the plant's power output. The 550 MW Elk Hills plant, 25 miles west of Bakersfield, which Sempra Energy (NYSE:SRE) (San Diego, California) is building with Occidental Petroleum (NYSE:OXY), should be commissioned at total capacity before June this year, in time to coincide with higher summer energy demand. The $395 million dollar plant was scheduled to start operations in March. Using combined cycle technology, which combines natural gas with steam power for high efficiency and reliability the plant is claimed to produce 45% more electricity for the same fuel input when compared to older plants operating in California. The project will feature state-of-the-art air emissions-reduction technology compared.

Occidental has a 2002 lawsuit in progress against Sempra over Elk Hills, claiming that Sempra cut Occidental out of a $6.6 billion deal to sell power to California. Sempra has denied the charges. The lawsuit is said not have affected the construction of the power plant.

Chevron Texaco (NYSE:CVX) (Houston, Texas) is developing the Sunrise cogeneration plant in Kern County with Edison Mission Energy (NYSE:EIX) (Irvine, California) and is on schedule to complete phase 2 of the project in, or before, July. The first 320 MW phase of Sunrise was completed in June 2001 and phase 2 will generate 265 MW to give a project total of 585 MW. The initial phase was a simple cycle peaking power project. With the second phase coming, the plant will convert to a combined cycle plant. The combined cycle operations will provide baseload and peaking power up to 24 hours per day, seven days a week.

The Calpine (NYSE:CPN) (San Jose, California) plant at Pastoria is still more than a year away from being commissioned with construction 30% complete. Calpine has adopted a less aggressive construction schedule among to time project completion with market demand. Calpine has just announced deals with a number of major turbine suppliers giving it the option to cancel $3.4 billion of future orders if the depressed industry does not pick up. The company has cancelled 11 gas turbines and two steam turbines and can elect to go forward with other turbines in which case it will negotiate a purchase price and receive credit for payments previously made. The company's shares rose on the news that it had been working to shed assets and scale back for future expansion plus obtaining agreement on the restructured turbine deal.

The 500 MW Midway-Sunset plant near McKittrick has been put on hold. Uncertainties in the energy market have caused Aera Energy (Bakersfield, California) with Edison Mission Energy and the CEC to put out a revised commissioning date of March 2006. The original scheduled date was July 2003.