Certification granted on October 6, 1999

Project Manager: Marc Pryor

Staff Counsel: Jeff Ogata

Hearing Officer: Stan Valkosky

Presiding Member: Commissioner Robert Laurie

AFC Filing, Data Adequacy, and Project Description

On July 10, 1998, the La Paloma Generating Company submitted its AFC for a nominal 1,048 MW natural gas-fired combined cycle power plant in the western Kern County oilfields near the community of Buttonwillow. The applicant was a limited liability corporation formed by an unregulated PG&E affiliate, the PG&E Generating Company. PG&E, by another name, was back in the business of building powerplants under de-regulation.

La Paloma promptly met data adequacy requirements and was accepted by the Energy Commission as complete on August 26, 1998. La Paloma would become the third and by far the largest merchant plant licensed by the Energy Commission, nearly doubling the CEC's all-time capacity records only recently set by Sutter (Docket No. 97-AFC-2) and Pittsburg (Docket No. 98-AFC-1). The Commission had never previously certified a facility exceeding 1,000 MW.

This project was similar to the three AFCs in the same oilfield area that would follow it (Sunrise, Elk Hills and Midway Sunset), interconnecting with the Midway Substation, and receiving its water supply from the West Kern Water District. But La Paloma was the first merchant plant AFC to re-visit the Kern County oilfields where so many cogeneration facilities had been licensed in the 1980s.

As heavily disturbed areas, the Kern County oilfields appeared to remain a desirable location for thousands of additional megawatts under de-regulation. Demand conformance had been the most difficult issue in the past, but ER 96 had already found 6,737 MW to be needed, more than enough for La Paloma. (Bills implementing de-regulation would later remove the demand conformance finding from the Warren-Alquist Act, entirely eliminating "need" from future cases.) Local opposition to powerplants in Kern County oilfields had always been virtually non-existent, so the road appeared open to La Paloma and its compatriots.

The La Paloma applicant had signed a union contract, thus avoiding conflict with California Unions for Reliable Energy (CURE). CURE intervened in La Paloma, but followed its pattern of not contesting a union project. (See Elk Hills and Sunrise as examples of CURE interventions that effectively delayed certification of non-union projects.)

Issues.

La Paloma's strategy was to overwhelm the Energy Commission with data, cooperation, and mitigation of environmental impacts. Such responsiveness by a PG&E affiliate marked a new era. This was not the PG&E the Commission was familiar with. By choosing its site well and avoiding mistakes, La Paloma became a model applicant, satisfying both the CEC Staff and the other agencies involved in reviewing the project.

Delays primarily caused by federal agencies and reviews of the San Joaquin Valley Unified Air District Determination of Compliance (DOC) slowed the schedule, and La Paloma requested an extension of the of the 12-month certification deadline.

However, no contested issues ever arose, even in air quality, where refinements were necessary over matters such as use of Best Available Control Technology (BACT). Biological impacts were fully mitigated. Under water supply, the alternative of Dry Cooling (95% water savings) was evaluated at pages 178-179 of the Commission Decision, but deemed unnecessary and too expensive for this project. Traditional wet cooling towers were allowed. In the end, La Paloma never had to significantly modify its project. This AFC for the largest powerplant ever licensed by the Energy Commission was essentially uncontested and devoid of real issues. There were no adjudications.

Adoption.

The Energy Commission unanimously approved certification of the La Paloma Generating Project on October 6, 1999.

Construction promptly began in January 2000, but this gigantic facility would take far longer to finish than its smaller contemporaries. La Paloma was not one of the competitors racing in the summer of 2001 to be the first new AFC going on line. The winners would be Sunrise, Sutter, and Los Medanos (Pittsburg) in that order. Rumors of turbine shortages (which turned out to be true) were one possible explanation for delay in La Paloma. Ownership would now rest with the PG&E National Energy Group, another un-regulated PG&E affiliate.

La Paloma was approximately 70% constructed by the summer of 2001. Originally scheduled to be complete in the summer of 2002, the project became operational in early 2003. Construction of La Paloma took more than twice as long as the AFC licensing process at the Energy Commission.