SDG&E Proposes Adding 450 MW of Local “Peaking” Power

Smaller Generators to Bolster Reliability During Periods of High Demand

May 23, 2011

SAN DIEGO, May 23, 2011 – San Diego Gas & Electric (SDG&E) announced today that it has filed for regulatory approval of three new power-purchase contracts for a total of 450 megawatts (MW) of quick-start generation from peaker plants proposed for San Diego County.
  
Peaker plants are small, efficient power units that can reach full generating capacity within 10 to 15 minutes to meet immediate demand on the grid.

The new plants – Pio Pico Energy Center, LLC (Apex Power Group); Quail Brush Generation Project (Cogentrix Energy, LLC); and Escondido Energy Center, LLC (Wellhead) – are the selected projects that met the specifications of SDG&E’s 2009 solicitation for conventional generation.  

“SDG&E continues to sign contracts for as much renewable power as we can get to meet the state’s 33-percent mandate, but we also need resources that can be brought online quickly to provide power when other sources, such as wind or solar plants, are not available,” said James P. Avery, SDG&E’s senior vice president of power supply.  

“The output from most kinds of renewable generation fluctuates throughout the day, posing a challenge for our system operators who must balance supply and demand every few seconds to maintain reliability in the region, ” Avery added.
  
In addition to helping to integrate renewables with other generation sources, the new peaking units also will be called on when demand for power is highest, such as on a hot, summer day.
  
The Pio Pico Energy Center project consists of three natural gas-fired combustion turbine units, which, at about 100 MW each, are twice as large as a typical peaker and can power up faster and more efficiently.
  
“This project not only can reach full power quickly like other peaking generation, it also automatically adjusts its output, much like a combined-cycle plant, to follow dips and peaks in demand, but in a much more environmentally responsible manner,” said Dave Jenkins, vice president of Apex Power Group.
   
The proposed project will be built on about 10 acres of land near the existing Otay Mesa Energy Center.
  
The California Energy Commission (CEC) began its review of the Pio Pico project in April 2011.  The CEC is responsible for reviewing, and ultimately approving or denying, all applications for power plants with a maximum capacity of 50 MW.  If Pio Pico is approved, construction should start in the first quarter of 2013 and the units could be online by summer 2014.
   
The 100-MW Quail Brush Generation Project consists of 11 natural gas-fired engines that generate about 9 MW each.  The plant will be built near the Sycamore Canyon landfill in San Diego and, because it is made up of a number of small units, can operate anywhere between 5 MW and 100 MW as needed.  The plant should start producing electricity in May 2014 and will provide power and transmission support to SDG&E’s customers for 20 years.

The Escondido Energy Center is a repowering of an existing facility and includes the installation of a new 45-MW combustion turbine generator, which replaces a vintage gas turbine generator.  The new unit will be built at the same site as Wellhead’s existing facility in Escondido.  SDG&E has a 25-year purchase power agreement with Wellhead for the output of the plant, which is scheduled to be online in July 2012.
 
“This Escondido project will be the third, fast-start generator project Wellhead has undertaken with SDG&E,” said Hal Dittmer, president of Wellhead.  “We are pleased to support their reliability and renewable energy integration efforts with cleaner, more efficient and more reliable technology than what had been built on the site.  We look forward to continuing our long-term relationship with SDG&E and the communities in the San Diego area.”
   
Avery said the highly efficient performance of the new peaker plants will help SDG&E to reduce its greenhouse gas (GHG) emissions and to contribute toward the state’s overall GHG reduction goal. 

All the contracts require approval of state regulators.

SDG&E is a regulated public utility that provides safe and reliable energy service to 3.5 million consumers through 1.4 million electric meters and more than 850,000 natural gas meters in San Diego and southern Orange counties.  The utility’s area spans 4,100 square miles.  SDG&E is committed to creating ways to help our customers save energy and money every day.  SDG&E is a subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy services holding company based in San Diego.

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For further information: Media Contact: Stephanie Donovan, San Diego Gas & Electric, (877) 866-2066, www.sdge.com