East Bay set to become electricity powerhouse

source: Alan Doyle East Bay BizTimes 2001.12.14

Six new East Bay power plants will make the region a major player in California's attempts to avoid rolling
blackouts next summer.

Construction in Contra Costa, Alameda and Solano counties is one major reason the California Energy
Commission is cautiously predicting the state may avoid outages when summer heat sends temperatures and
electricity usage soaring.

The new installations range from the huge 880-megawatt Delta Energy Center in eastern Contra Costa County
to a 51-megawatt co-generation plant in Solano County to a 4.5-megawatt landfill biomass generator in
Alameda County. One megawatt can power 750 homes at normal demand.

Combined, the six new gas-fired and wind-powered plants at normal operating capacity will generate 996.8
megawatts, or 26.6 percent of the statewide total, to the 3,749 new megawatts expected on-line by Sept. 1.

That's almost triple the East Bay's current 9.25 percent contribution to total generating capacity in 2000, the
last year for which complete figures are available from the state energy commission.

And the commission's guarded projections don't include solar energy plants, which aren't regulated by the
state, or small peaker plants licensed by the counties that come online during high-demand periods.

Alameda County, for instance, expects to have a 1.14-megawatt solar unit, the largest of its kind in the world,
on-line by spring at the Santa Rita Jail in Dublin. And, depending on the overall economy, power economics
and permitting procedures, another 200 to 300 megawatts could be added by peaker plant construction in the
three counties.

In an annual state outlook laced with generation, conservation and weather caveats, the energy commission
projects a July surplus of 340 megawatts ­ enough to power 255,000 residences at normal demand ­ if all
goes according to plan.

The plan hinges on continued conservation at close to the same levels, a normal or cooler than normal summer
and all the permitted plants coming on-line on schedule.

In the East Bay, all six plants are on schedule or close enough to their projected startup dates to be generating
during the summer peak demand months, according to the companies and commission documents.

Adding to the guarded summer optimism is the fact that another 1,740 megawatts would be available from
large industrial users participating in the state's interruptible/emergency responsiveness program.

The commission's projection does contain two important caveats for Bay Area business and residential power
consumers:

Although supplies from all sources ­ in-state generators, imports from the grid and power diverted from
interruptible sources ­ may be sufficient to avoid outages, demand may result in price spikes in California's
deregulated market.

Because aging, and inadequate transmission lines haven't been upgraded and expanded, some areas of the
state could experience outages next summer because there's no way to get enough power to them. The East
Bay appears to be safe, but the Peninsula, which lacks sufficient lines to draw enough electricity from the grid
to meet peak demand, could experience local outages, a commission spokeswoman said.

In the East Bay, the new plants will join 55 public power, government and industrial facilities that had a normal
operating capacity of 4,968 megawatts of California's total 54,000-megawatt generating capacity in 2000.

Current facilities range from the 2,022-megawatt Mirant Corp. plant, one of California's largest, in Pittsburg to
on-site generating units at refineries and chemical plants to small government and factory facilities of less than a
half-megawatt. Concord, for example, operates a 0.105-megawatt plant at the Cowell Swim Center; Borden
Chemical Inc.'s Fremont plant has a 0.2-megawatt unit; and Vallejo, Fairfield and Vacaville operate plants
producing less than 1 megawatt each to augment grid supplies.

The new East Bay plants show the diversity in source and purpose in the scramble to provide enough power
to keep California both working and cool during the summer months.

Topping the list is Calpine Corp.'s Delta Energy Center in Pittsburg, near the USS-Posco Industries plant.
Rated at 880 megawatts and expected to produce 844 megawatts at normal operating capacity, it will be the
second-largest plant coming on-line next summer and a major supplier to Posco, the largest steel finishing
plant on the West Coast, and to the power grid.

Valero Refining Corp. is building two plants, totaling 90 megawatts normal operating capacity, to power its
Benicia operations without relying on the grid. The first plant, with an anticipated normal capacity of 45
megawatts, is expected to be online by April 30. That will free enough grid electricity to power 33,750
homes, about 26 percent of Solano County' s residences.

CalPeak Power LLC, the San Diego-based subsidiary of United Technologies Corp., is building a
49-megawatt peaker plant at a Pacific Gas & Electric Co. substation between Vacaville and Dixon. The plant
should be on-line by June 30.

Altamont Wind Inc. is adding 50.4 megawatts in turbine generation by Aug. 31 at Altamont Pass.

And at two landfills, Keller Canyon near Pittsburg and Vasco Road in Livermore, plants that will be fueled by
gas created by decomposing garbage are scheduled to generate 8.4 megawatts to power dump operations,
freeing enough grid electricity for 6,300 homes.

And more power is on the way in the East Bay in coming years, including the two largest proposed new plants
in the state. FPL Energy LLC plans to bring the 1,120-megawatt Tesla Power Project in eastern Alameda
County on-line by 2005. Calpine plans to have the 1,100-megawatt East Altamont Energy Center generating
by 2004. Both plants are going through the state permitting process.

In addition to other traditional generation facilities under consideration, Vallejo plans to bring a 1-megawatt
municipal solar unit on-line by 2003; Livermore is considering a 500-kilowatt solar installation.

Vallejo is negotiating with a Wyoming company to build what could become a 500-megawatt wind turbine
facility in hills surrounding the city, and several companies are said to be considering major windpower
installations in the Fairfield-Vallejo corridor and the Montezuma Hills wind farm complex in far southeastern
Solano County.

If all those plants are built, the East Bay could become one of California's regional power-generating centers,
joining the corridor extending east from Los Angeles into Kern, Riverside and San Bernardino counties.

Reach Doyle at adoyle@bizjournals.com or 925-598-1404.