A move that was read by some as a sign of surrender in NRG's Puente natural gas plant application isn't really that.
After two members of the California Energy Commission said they would recommend rejecting the controversial peaker plant's siting application, NRG came back with its own surprise. Its counsel, Michael Carroll of law firm Latham and Watkins, filed a motion to suspend the application process, "while Applicant considers whether or not to withdraw."
"Granting this motion will ensure effective use of resources of the Committee and the parties to these proceedings in the event that Applicant determines to withdraw the [application for certification]," the motion argues.
That prompted the L.A. Times Editorial Board to herald "[t]he beginning of the end of big, climate-changing power plants in California," in an article that says Puente likely will never get built.
The commissioners' opposition stands, but it's important to note that suspension would not end the application process; it simply pauses it before the plant receives an official rejection.
Opponents of the plant, including the City of Oxnard, environmental justice groups and clean energy advocates, want to see the CEC move ahead with its rejection so that stakeholders can get serious about developing alternatives. Puente would serve a local reliability need triggered by the retirement of older power plants in the area in 2020.
If rejected, this would become the clearest case yet of energy storage beating out a fossil fuel plant to serve grid reliability.
"The community really deserves finality on this," said Matt Vespa, an attorney at Earthjustice representing the Sierra Club in the proceeding.
The suspension request, he added, is a way for NRG to keep its options open.
That company's intentions became clearer in a follow-up filing Monday. Originally, NRG requested suspension for an undefined period of time. That could theoretically save the commissioners some trouble, if NRG did decide to withdraw its application, but it would also drag out a process that needs to be resolved to meet the grid reliability deadline.
The new document suggests a timeline of six months. Carroll argues that this would allow time to implement a new request for offers, whereby energy storage and other clean energy assets ("preferred resources," in California's parlance) could compete to cost-effectively replace the gas plant.
"The results of the RFO are necessary to determine the feasibility of preferred resources as an alternative to the Project," Carroll writes. "Until the results of the RFO are known, it would be premature to proceed with a recommendation to deny the Project in favor of preferred resources."
In other words, he is asking regulators not to reject the gas plant until it's certain that a cleaner alternative will materialize.
Another outstanding question is whether utility Southern California Edison is at liberty to run a new RFO when the project it already chose in the earlier procurement still has a pending application.
The City of Oxnard and several environmental groups argued that the existing contract between SCE and NRG prevents an alternative procurement from happening until NRG's application gets rejected.
NRG doesn't believe this to be the case.
"Applicant is not aware of any basis upon which the pending [application for certification] would act as an impediment to proceeding with a preferred resources RFO," the filing says.
The utility appears to be actively exploring this possibility, documents show.
SCE executives held an ex parte meeting with a California Public Utilities Commission staff member October 17 to discuss next steps, according to a filing.
"SCE stated that it is considering options on how to meet local capacity requirements obligations without the Puente project, including launching a solicitation for preferred resources," the document states. "SCE indicated that it intends to act as expeditiously as possible, and that it is coordinating with NRG on the status of the Puente Power Project power purchase agreement."
A spokesperson for the utility noted in an email, "SCE is working to address the contractual constraint to allow SCE to commence with a full examination of best options to move forward with an assumption that Puente is not approved. We don't anticipate needing a regulatory decision to address the contractual constraint."
Puente isn't dead yet, but a consensus seems to have formed among all the key players that an alternative procurement for cleaner assets should happen -- fast.
