Duke Energy outlines South Bay plant plan:
New owner may have other ideas

By Tanya Mannes
STAFF WRITER
May 5, 2006

CHULA VISTA – Residents learned details this week of Duke Energy's plan to replace the 46-year-old South Bay Power Plant with a cleaner facility that would be a fraction of the size of the existing plant.

Questions remain, however, about whether the plan will be revised by the facility's new owner, LS Power.

New York-based LS Power announced yesterday that the company had finalized the purchase of nine Duke Energy power plants, including the South Bay facility, under an agreement signed in January.

The announcement came a day after Duke Energy representatives spoke at a community forum about plans to rebuild and demolish the old plant.

David Hicks, a spokesman for Duke Energy who joined LS Power yesterday as a spokesman for the western region, said it would be premature to predict whether LS Power would make significant changes to the plan drafted by Duke.

“I can tell you that LS Power is a development-oriented company and that this is a very good opportunity for this company, and they plan to pursue it,” Hicks said. “As a new owner, they will have to evaluate all their options.” The Port Commission scheduled Wednesday's forum in response to requests from the Environmental Health Coalition and Chula Vista residents.

In a presentation, Duke Energy said the new plant would be built on 15 acres just south of the existing facility's 110-acre footprint. The old plant would be demolished once the new facility became operational. The new power plant would produce 500 megawatts, downsizing from the current 710-megawatt capacity. It would continue to use natural gas but would decrease air emissions per electrical unit generated.

The plant also would reduce the power plant's impact on fish and other marine life by ending the use of bay water for cooling.

The Environmental Health Coalition, a local advocacy group, has called for transparency in negotiations surrounding a replacement power plant. The coalition objected to several components of Duke's plan, including the lack of sustainable elements such as solar power, and called for more information on how the plant's supplemental power production during periods of high demand would affect emissions. EHC director Laura Hunter also questioned whether LS Power would honor the commitment to end the use of bay water.

Mayor Steve Padilla also is calling for an open public process in decisions about the power plant.

“A power plant is something that's going to last many years,” he said yesterday. “This is about more than just whether to build a power plant, or what kind of plant to build. It's about public access, public health and protecting the environment.”

Several South Bay residents praised the idea of replacing the outmoded power plant, which is widely viewed as an eyesore, with a lower-profile facility.

“It's satisfactory in the sense that it's better than what we have now,”said Greg Alabado, a Chula Vista resident. Alabado said he was interested in how the sale of the plant would affect plans. “I guess everything is in a moving pattern,” he said.

“I thought the plan had great potential,” said Jack Monger, another South Bay resident. “The idea of erasing that overwhelming, ugly structure and opening up more bayfront land seems like it would be a win for the community.”

But Monger said that the sale of the power plant seems like “a step backward” in the power plant's dialogue with the community.

“To some extent, you're almost starting over again. Those people who have concerns will have to hear a plan from the new owners,” he said.

Duke Energy of North America, which operates the plant under a lease from the San Diego Unified Port Commission, is transferring the lease to LS Power. The Port Commission granted its consent this week to the change in ownership. Duke's $110 million lease with the Port District took effect in April 1999. The leaseholder, formerly Duke and now LS Power, is responsible for tearing down the power plant by February 2010 and also must seek permission from the California Energy Commission for a replacement plant.

Building a state-of-the-art power plant is a huge investment – between $400 million and $500 million – and it remains to be seen whether LS Power will find the project feasible. A key factor will be whether the company is able to negotiate a long-term contract to sell the power to a local utility, such as San Diego Gas & Electric Co., or another buyer.

LS Power is expected to file a formal application for a replacement plant next month with CEC, which will kick off an 18-to 24-month process involving dozens of public hearings. Even if the application is approved, LS Power is not obligated to build the new plant.


Tanya Mannes: (619) 498-6639; tanya.mannes@uniontrib.com

Copyright 2005 Union-Tribune Publishing Company. Used by Permission

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