Project Manager: Rick Buell

Staff Counsel: Caryn Holmes

Hearing Officer: Stan Valkosky

Presiding Member: Commissioner Robert Laurie

AFC Filing, Data Adequacy, and Project Description

High Desert was the first merchant plant Application for Certification (AFC) filed at the Energy Commission in the electricity restructuring (de-regulation) era. The AFC was submitted on June 30, 1997 for a project with multiple configurations (peaking plant or combined cycle), including a variety of generating capacities, ranging from 678 MW to 832 MW. This confusing set of project descriptions was thankfully not repeated by subsequent applicants, however it was a clue that High Desert would have problems. (The Energy Commission Decision in High Desert expressly states at page 8 "We wish to discourage other potential Applicants from proposing more than a single project configuration, or a project involving multiple descriptions."

Data adequacy was not achieved until December 3, 1997. It would then take a long and difficult two and a half years before High Desert finally received an Energy Commission license. By then, four much less complicated merchant plants filed after High Desert had already been certified and were under construction. (Sutter, Pittsburg, La Paloma, and Delta.)

High Desert's location was never in doubt: the former George Air Force Base in the City of Victorville, San Bernardino County. The facility was backed by local politicians, including the Mayor of Victorville. However, at the time of licensing, the project's capacity was still either 678 MW or 720 MW. The applicant consisted of affiliates of Constellation Power, Inc., of Baltimore Maryland. The project's water supply was always difficult to pin down, but sources included the Victor Valley Water District, City of Victorville, the Mojave Water Agency, and the State Water Project.

Issues

Multiple configurations.

The complexity of analyzing multiple configurations was a major factor in delaying High Desert. CEC staff, in its role as lead agency under the California Environmental Quality Act (CEQA), had to try and determine project impacts from what was essentially more than one project. The most practical approach was to analyze worst-case impacts from all possible options, a time-consuming approach.

Intervenor Gary Ledford wanted the "project" defined as the overall redevelopment of the former George Air Force Base. Intervenor's proposal was rejected by the Committee and the Commission because it was both highly speculative and clearly beyond the CEC's powerplant jurisdiction.

Water Supply.

This was the dominant contested issue in High Desert. On one hand, it was unclear if the water required by High Desert would actually be available to the project. On the other hand, project opponents such as intervenor Leford also contended that High Desert could monopolize the local water supply to the detriment of other water users. Another intervenor was California Unions for Reliable Energy (CURE), but CURE was able to reach a labor agreement (union contract) with High Desert and also satisfy itself that the project's water impacts would not be significant.

The Mojave River provided the major source of surface water in the region, flowing one mile east of the High Desert site. But the Mojave River flows had been declining for twenty years. Groundwater sources were in a severe overdraft condition, which means that far more water was being pumped out than replenished. This was, after all, the desert, and water is a scarce commodity, especially since the area kept growing, developing an ever larger appetite for water.

The Mojave Water Agency was the primary agency responsible for meeting the needs of area customers. (It held the title of "watermaster".) The Mojave Water Agency depended upon imports delivered by the State Water Project, operated by the Department of Water Resources (DWR), continuously pumping Northern California water to the drier areas of the south.) The Mojave Water Agency had to buy this water from DWR, which it has failed to do in 1999 due to financial limitations. Not encouraging.

However, the City of Victorville had it's own water district ally, the Victor Valley Water District. As a promoter of High Desert, the City of Victorville, teamed with the Victor Valley Water District, promised to supply the powerplant with water through contractual arrangements to be made with both the Mojave Water Agency and the State Water Project.

Plus there was ongoing, lengthy, and continuous litigation in which plaintiffs such as the City of Barstow brought suit against the Mojave Water Agency, seeking to obtain judicial control over the area's water supplies in order to protect the rights of existing users. This litigation led to both a settlement among certain parties and an appeal to the California Supreme Court by dissenters, including intervenor Ledford.

The Energy Commission attempted to grapple with the complexities of the settlement and various related court decisions, but chose not to wait for final Supreme Court action before licensing High Desert. Nor did the applicant ever seriously consider the dry cooling option, which it declared was infeasible for this project. Dry cooling, in whole or in part, had eliminated or reduced water supply problems in other cases, such as Sutter and Three Mountain.

Ultimately, applicant, Energy Commission staff, the Mojave Water Agency, the City of Victorville, and the Victor Valley Water District, with added support from CURE and the California Department of Fish and Game, managed to convince the Committee and the Energy Commission that the proposed wet cooling water supply scheme for High Desert could work. Applicant and its allies committed themselves to making sufficient purchases from the State Water Project, including banking water in good years, to avoid adverse impacts to the groundwater supply in drier years when it would pump out more water than was received. In other words High Desert would be "water neutral" and not contribute to any further groundwater decline.

Water modeling results were used to develop a lengthy set of Conditions of Certification to implement this highly complex proposal, and they included the requirement for High Desert to actually shut down if the water balancing plan failed to function as intended. (See Soil & Water Condition of Certification 1(c).)

In the end, whether the High Desert water supply plan would actually work proved less important to the Energy Commission than protecting the local environment against the plan's potential failure. Only time will tell if there really is an adequate, long-term water supply for High Desert.

A related issue was adjudicated concerning the potential growth-inducing impacts of the High Desert project and its water facilities. Further Conditions of Certification were added and clarified to address this problem, leading to another series of disputes and delays. Compromises were finally reached that satisfied the major parties.

The Energy Commission ultimately concluded that while it could not solve the water supply problems of the region, it would avoid making them any worse. The Commission Decision contains 19 Conditions of Certification for Soil and Water to deal with the challenge of High Desert.

Adoption.

The High Desert Power Project was unanimously certified by the Energy Commission on May 3, 2000.

Intervenor Ledford filed a lawsuit asking the California Supreme Court to halt the project due to defects in the decision primarily related to water use. The Supreme Court rejected his case on August 9, 2000. Construction on High Desert commenced, with the facility scheduled for completion by July 2003. The 830 MW powerplant became operational ahead of schedule, on April 22, 2003.