Dive Brief:

• The California Public Utilities Commission last week rejected a proposed refurbishment to the Ellwood gas-fired peaker plant in the Moorpark region of southern California, finding that "no reliability need justifies approval" of the plant at this time. 
• The unanimous decision follows a proposed decision from a California administrative law judge in April that urged the CPUC to reject upgrades to the NRG-owned plant and the installation of a small battery. Any electricity needs in the region can be met "in a manner more consistent with the [CPUC's] goals of reduced reliance on fossil fuel," ALJ Regina DeAngelis wrote.
• The decision came as the California ISO filed comments at the CPUC urging it to reconsider approval of the 262 MW Puente Power Project, saying that renewable resources and reactive power can serve local electricity needs instead of the refurbished plant. 

Dive Insight:

Gas peaking plants are in the crosshairs in California — targets of scrutiny from legislators and regulators alike. 

Last month, California lawmakers passed SB 338, which would mandate that utilities develop carbon-free alternatives to gas generation for meeting peak demand in their integrated resource plans. The bill awaits an expected signature from Gov. Jerry Brown (D). 

In the meantime, California regulators and energy stakeholders are debating pending proposals for gas peaker plant upgrades. On Thursday, regulators adopted ALJ DeAngelis' proposed ruling, striking down a plan to upgrade the 1970s-era Ellwood plant and add a 0.5 MW battery. 

In her proposed decision, DeAngelis noted that Ellwood is “highly polluting resource permitted to emit as much as 103.59 pounds per hour of nitrogen oxide — which is over 20 times the normal emission rate of a modern peaking unit with modern emission controls." The plant is situated near a school in the Moorpark area outside Oxnard. 

Southern California Edison, which purchases power from the plant, argued that refurbishing it is necessary for the resilience of the power system — recovery after an outage — but not for the basic reliability of the local system.

"This new standard is referred to by SCE as the resiliency standard and is purportedly based on the unique geographic area and transmission challenges related to serving the Santa Barbara/Goleta area in the event of an emergency," the final decision reads. "Our review of Ellwood does not rely on this proposed resiliency standard because no such standard has been vetted and approved by the Commission."

In her proposed decision DeAngelis also noted that planned upgrades to the 262 MW Puente Power Project could negate the need for refurbishment of the Ellwood plant. But despite approval last year, the plant has been sucked into a high-profile debate over resource valuation and capacity needs. 

CAISO agreed to look into alternatives to the Puente plant this summer after calls from several state lawmakers and the publication of a Los Angeles Times report that suggested the state was overbuilding power plants. Green groups say solar, storage and efficiency can cost-effectively meet power needs without carbon emissions and argue the CPUC is using outdated cost estimates for clean resources. 

Last week, CAISO filed its comments at the CPUC, recommending regulators reconsider approval of the plant. CAISO studies find that renewables and storage are "technologically feasible to meet local capacity requirements in the Moorpark sub-area," the grid operator wrote, and new cost estimates for clean resources should be established through a new request for offers (RFO).

"Without such an analysis, the CAISO does not believe there is sufficient information to establish that the preferred resource alternatives are economically infeasible," the grid operator wrote. 

There are just over three years before new power plant cooling regulations come into effect in California, expected to push hundreds of megawatts of capacity offline, CAISO notes, meaning "there appears to be an opportunity to conduct an expedited RFO and operationalize preferred resources prior to the summer 2021 timeframe."

Southern California Edison and plant owner NRG have said they still support completion of the Puente project. The CPUC will have the final say over the plant's future.