Kern River Field Cogeneration Project (Kern River, later Omar Hill)

Docket No. 82-AFC-2

Certification Granted on August 24, 1983

Project Manager: Chuck Najarian

Staff Counsel: Arlene Ichien

Hearing Officer: Stan Valkosky

Presiding Member: Commissioner Karen Edson

AFC Filing and Data Adequacy

Getty Oil Company and Southern California Edison (SCE) jointly filed an AFC on July 29, 1982 for a 300 MW cogeneration plant at Getty’s Kern River Oilfield in Kern County, near Bakersfield. It was found data adequate by the Energy Commission on September 8, 1982, with the condition that additional structural engineering data be provided. Once the condition was met, the regulations then in effect deemed the AFC to be accepted as of July 29, 1982, the original filing date. The one-year clock started, and the AFC was certified in thirteen months, an expedited process for its time.

Cogeneration Overview

Kern River would be the first cogeneration plant certified by the Energy Commission. A parade of cogeneration facilities were to follow, as natural gas-fired cogeneration quickly became the CEC’s dominant preferred technology, replacing geothermal. Oilfield and oil refinery cogeneration plants led the way, with their heavily industrial sites that generally featured available air emissions offsets and few opportunities for additional adverse environmental impacts.

Although technically a qualifying facility (QF) rather than a utility project, Southern California Edison (SCE) owned 50% of Kern River. SCE or unregulated SCE subsidiaries such as Mission Energy, would be co-applicants on similar projects in the future. Thus, SCE began selling power to itself under the mandate of PURPA, an unanticipated development. The price SCE paid for such electricity came from a complex and often shifting set of non-standard, negotiated contracts. This practice became known as "self-dealing", and much later, after an investigation, the PUC staff found that, for some powerplants, it led to inflated prices for Edison’s ratepayers.

However, when the CEC licensed Kern River, an electricity sales contract only existed "in principle". In later years, the CEC would require these contracts during an AFC, seeking to evaluate their impacts upon ratepayers as part of the demand conformance review.

Project Description

The cogeneration project would be fueled by natural gas, with low sulfur oil as the back-up fuel. The industrial process would generate steam for Thermally Enhanced Oil Recovery (TEOR), in which the thick, underground oil is heated to a more liquid state, so that it can be pumped to the surface. Getty’s old system relied on oil burning in steam generators for TEOR, using one barrel of oil for every three produced. In addition to saving approximately 7,000 barrels of crude oil per day, the cogeneration plant would also generate 300 MW for sale to Southern California Edison.

Issues - Air Quality

Air quality was the most difficult issue in the Kern River case. Applicants’ original proposals were deficient as to both NOx emissions control technology and the emissions offset package. Air quality concerns delayed the proceeding while applicants made substantial changes in hopes of satisfying CEC staff, the Kern County Air Pollution Control District (KCAPCD), and the Air Resources Board (ARB). More time was necessary for a proper review of Kern River’s new air quality submittals, which reduced emissions, as well as shifted, and added offsets.

By the time KCAPCD presented its Final Determination of Compliance at a June 16, 1983 Committee hearing, the air quality problems had been resolved, and all parties agreed that Kern River would comply with applicable air quality standards.

There were no other significant issues. The SCE service area had a need for additional capacity and energy, so that demand conformance was uncontested.

Adoption

The Energy Commission unanimously certified the Kern River Field Cogeneration Project on August 24, 1983. The facility was constructed, began operating in 1985, and later changed its name to Omar Hill.