Californian city halts 262 MW gas plant to look for clean option
A city in California has halted plans to upgrade a gas power station, in order to seek cleaner energy alternatives. At a meeting of the city in Glendale, members voted by four to one to explore alternatives to the $500m project at the Grayson gas plant, which had been proposed by a city-controlled utility company. Strong public opposition and changes in the economic climate of the energy industry are thought to have changed the context of the decision.
The city council of Glendale, California last week voted to study clean energy options rather than approve a gas plant that has been years in the making.

The city-controlled utility had proposed a rebuild of the existing Grayson plant. The council could have upheld the $500 million gas plant Tuesday, but in the wee hours of Wednesday morning, members voted four-to-one to examine other options.

Economic shifts in the energy industry and strong public input changed the context of the decision.

This appears to be the first time a municipal utility declined to approve a gas plant in favor of distributed energy resources. By doing so, Glendale joins a trend of grid planners halting new gas plants in favor of cleaner distributed tools to fulfill the same grid needs.

Community activists have cheered such decisions, as in the city of Oxnard, Calif., where the Puente plant would have loomed over the coastline. Inland, a Native American-led nonprofit has challenged Calpine’s plan to put a gas plant on a river sacred to the Chumash people.

Glendale may pose a greater challenge to gas plant opponents, because it’s a dense urban environment with transmission constraints and a plant that’s aging out of operations, exposing a real reliability need.

“This is a place for the clean energy sector to step up and show that they can do this,” said Angela Johnson Meszaros, an Earthjustice attorney who testified on behalf of the Sierra Club. “If they don’t, the city will approve this power plant and the takeaway will be that the clean energy solutions aren’t there.”

This local proceeding in a small city adjacent to Los Angeles could soon become the test case for how the lofty hopes of clean energy providers run up against real-world constraints.

“Failure to take action”

Glendale’s proposed 262-megawatt gas plant emerged from a planning process begun in 2014 to deal with the impending retirement of the old Grayson Power Plant.

As an independent operator in a transmission-constrained pocket of the Los Angeles Department of Water and Power balancing authority, Glendale Water and Power wants to ensure electrical self-sufficiency. That means planning around the record peak load of 346 megawatts, from September 1, 2017.

The utility calculated additional capacity needed in case the first- and second-largest power sources fail (the N-1-1 contingency, in grid planning terms) and determined that the plant to replace Grayson should wield 262 megawatts of generating capacity.

In a filing for the April 10 meeting, the city utility specifically warned against pausing the power plant to consider other options.

“Failure to take action to modernize the aging Grayson Power Plant creates risk for the City,” the filing argues.

The power equipment the utility wants to would go up in price if the deal doesn’t close by the end of May, driving up costs by $2 million for a six-month delay, according to the document. New permitting and design work would cost additional time and effort. The city has already spent nearly $12 million preparing this plan; changing it now would mean those costs can't be recovered.

The argument for spending $500 million because the city has already spent $12 million did not sway the city council members.

Indeed, the cost of the project, to be paid for with municipal bonds, significantly exceeds the $300 million price tag for Puente, which would have had the same capacity.

That said, the Grayson proposal is not dead. It remains a possibility while clean energy providers respond to the 90-day request for information. After that process, the council will vote on the available options.

Alternatives arise

Power plants are complex contraptions that take years to plan. In the time since the Grayson design began, the energy storage industry has blossomed from an experimental technology into a grid tool that has proved itself at scale.

That evolution is reflected in Glendale Water and Power's recent consideration of coupling a smaller gas plant with a 50-megawatt battery. The utility initially concluded that batteries could leave the city more vulnerable to contingency scenarios during peak demand moments than the larger power plant option. However, as the city considers a range of cleaner options, it now needs to re-evaluate how solar, demand response and batteries can support reliability.

Those resources individually can’t provide the same kind of assurances that a gas plant can. Operating in concert, however, they may be able to fulfill the needs of the grid.

That was the conclusion when grid operator CAISO examined DER alternatives to the Puente plant in Oxnard. That decision carried ample weight, coming from the independent body charged with balancing the grid.

Having established that the gas plant was not the exclusive solution to the local capacity problem at hand, regulators said they intended to reject the gas plant proposal. That led to a new procurement round to identify cost-effective alternatives.

Puente seems like an obvious comparison, but Glendale’s utility distinguishes the two projects. For one thing, Puente would have tapped into the CAISO transmission network, which has an abundance of capacity, whereas Glendale’s transmission import rights are “extremely limited.”

Puente represents a tiny fraction of Southern California Edison’s peak load, while Grayson would supply the vast majority of Glendale’s peak.

“Not repowering Grayson would have a much more dramatic impact than deferring the repowering of La Puente,” the staff report noted.

Recent advances in grid modernization allow the community to reframe that problem, said Meszaros, the Earthjustice attorney.

“If you’ve got $500 million to spend on energy resilience and reliability, you should be really focusing on how you’re going to attack that peak,” she said.

That could happen through the deployment of centralized or distributed battery systems. Indeed, California’s energy storage industry is monitoring the developments in Glendale.

“The storage industry is ready to compete to serve the electric needs of Glendale,” said Alex Morris, director of policy and regulatory affairs at the California Energy Storage Alliance. “This competition is a good thing for Glendale residents and businesses since it can only help determine the least-cost, best-fit grid resources.”

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