Central Valley Power Plant may close to make room for Newer Building
The giant La Paloma power plant located near Bakersfield might shut down because it is in the midst of bankruptcy proceedings. The independent power plant sits close to a key transmission connection between areas served by Southern California Edison and Pacific Gas & Electric (PG&E). The power plant’s location has allowed La Paloma’s electrons to zip easily north to San Francisco or south to Los Angeles despite a sometimes jammed transmission link-up between the utilities’ historic territories. The location has also helped the natural-gas power generator become California’s most heavily used independent power plant in the past decade behind only PG&E’s Diablo Canyon nuclear plant. Neil Millar, executive director of infrastructure development at the California Independent System Operator, which manages the long-distance transmission lines for most of the state, stated:
We can’t rely on the La Paloma plant because it’s outside of the L.A. basin. It is here, all about location, I’m afraid.
The agency is supporting the construction of the Puente power plant in Ventura County, which would cost about $250 million and would be paid for by electricity customers. La Paloma is just 14 years into a lifespan that could stretch 30 or 40 years and it was built by private developers at a cost of about $500 million. Critics are arguing that replacing La Paloma with an expensive new plant is shortsighted and wasteful and that it underscores the illogical decision-making that has led to Californians paying about 50 percent more for electricity than the national average. In filing for bankruptcy, La Paloma blamed market factors such as low natural gas prices, California’s increasing use of renewable energy, and slow growth in electricity demand. Unfortunately, older independent plants such as La Paloma lack the kind of contracts newer plants receive that allow for recovery of construction costs from the utilities’ customers.