A.V. Gas Plant Losing Steam?

Summit Power Group is ready to spend nearly $600 million to construct a natural gas power plant in Palmdale. But there’s one big hurdle: Lancaster. The neighboring cities have been squabbling for years, and the power plant appears to be the latest issue to fight over. Palmdale has long wanted a plant and worked to secure the necessary permits. But costs ballooned to $27 million, and in May, the city decided to turn the project over to Summit, a privately held builder of natural gas, solar, wind and carbon capture power plants based in Seattle. But before Summit can begin construction on the 570-megawatt plant, it must get approval from the Antelope Valley Air Quality Management District to approve a transfer of credits related to the pollution the plant will generate. A hearing is set for Dec. 17 during which Palmdale’s neighbor will have a forum to lodge objections. Lancaster, led by Vice Mayor Marvin Crist, opposes the power plant project on environment grounds, saying the emissions are too close to schools and residences. Palmdale, in response, chalks up the opposition to mere politics and instead touts the 800 construction jobs and the new energy supply the project creates. Summit, founded in the late 1980s by two former Department of Energy officials, considers it unfortunate the project is wrapped up in a long-standing dispute between the two cities, said Tom Johns, the company’s vice president of development. “We just have to deal with this as professionally as we can and convince the community we will be a good neighbor,” Johns said. Summit struck a deal in May to take over the project after being chosen by Palmdale among six applicants. The city will receive $27 million as reimbursement for what it has already spent on the project, including $10 million in studies and permitting fees. The energy company also is acquiring 50 acres on which to build the plant that is adjacent to Plant 42, U.S. Air Force property that is the location of several aerospace companies. The project’s cost was initially pegged at $1 billion, but Summit now expects it will cost about $600 million. The company typically takes on debt to finance its projects. The power plant has been approved by the California Energy Commission and the U.S. Environmental Protection Agency. In fact, Johns said, being so far along in the permitting process is what attracted Summit. “There aren’t a handful of projects like Palmdale that are so advanced on the permitting process,” Johns said. Proposed to be operational as early as 2017, the Palmdale power plant would be the second natural gas plant in California operated by Summit. The company has developed power plants generating 10,000 megawatts in 13 states, including four photovoltaic solar projects in California that are expected to go online starting in 2014. Michael Mischel, the public works director for Palmdale, noted that the plant is being proposed at a time when the San Onofre nuclear power plant is being shuttered and there are concerns about the state’s energy supply. “Someone needs to supply the electrons to the grid and that comes from a plant like this,” Mischel said. Pollutant exposure? The permits that have been issued for the power plant make little difference to Lancaster officials. The city hosted three meetings in November and December for what Crist said was to educate area residents about the power plant and the potential dangers from the nitrogen oxide (NOx), volatile organic compounds (VOCs) and other pollutants it will generate. The city’s presentation claims 6,400 school children in Lancaster would be exposed to the pollutants versus fewer than 400 schoolchildren in Palmdale. “We believe the process they went through was flawed,” Crist said. To address air quality issues, Palmdale got approval from the Mojave Desert Air Quality Management District and the San Joaquin Valley Air Pollution Control District to transfer emissions credits to the Antelope Valley Air Quality Management District. The credits, which would be paid by Summit, would allow the plant to discharge 152 tons of NOx a year and 60 tons of VOCs a year. The Antelope Valley Air Quality Management District board meets this month will decide whether to allow the emissions credits transfer to move forward. In anticipation of a large crowd, the meeting will take place at Antelope Valley College, with the board hearing public comments in the morning and taking a vote in the afternoon. The seven-member board is made up of two representatives from Palmdale, two from Lancaster, including Crist, who also serves as chairman, two from Los Angeles County, and one at-large member. Palmdale officials, including Mayor Jim Ledford, who also sits on the air district board, blame politics for Lancaster’s opposition, an allegation Crist denies. Due to prevailing winds, pollutants created by the plant would affect Lancaster more than Palmdale, Crist said, adding, “it is 60 feet from our border.” The Dec. 17 meeting is critical. If the air district rejects the credit transfer, the project is stopped. If that were to happen, the matter might move into court. “There is always that option but quite frankly we are not anticipating that (being rejected) happening,” Mischel said. Evolving proposal But even if the air quality district approves the transfer, there could be other hurdles. The Palmdale plant has been in the works since 2005 and was originally conceived as a hybrid plant generating energy from both natural gas turbines and solar thermal mirrors or lenses. However, with natural gas costs far lower than a decade ago, Summit is considering dropping the solar component. (And even if it were to remain, Johns said, Summit prefers traditional photovoltaic technology over solar thermal.) But the permits from the California Energy Commission and the EPA include a solar component. A revision to the power plant that eliminates solar generation would require a revised permit from the EPA, an agency spokesperson said. Additionally, when Palmdale transfers the project to Summit, a petition will have to be filed and approved by the state energy commission. “At this point, no such petition has been filed with the commission,” said Sandy Louey, a spokeswoman for the energy commission.