Consumers just scored a victory with NRG's announcement that it is pulling the plug on a natural gas power plant in Ventura.
The Houston utility had contracted with Southern California Edison (SCE) to build the hotly contested Puente plant in Oxnard. Ratepayers would have shouldered the $300 million price tag.
But a recent decision by two of five California Energy Commission (CEC) members to recommend denial of the project appears to have prompted NRG to act before the full commission took a vote.
In actual fact, SCE can afford to walk away from that relatively small project since it already got the greenlight from both the Public Utilities Commission (PUC) and the CEC for two far more massive power plants at Huntington Beach and Long Beach to be built by AES. They would be virtually impossible to undo.
And NRG is making inroads with SCE on clean techology contracts for battery storage in any case.
But the good news is that NRG’s pullout could encourage the Los Angeles Department of Water & Power to permanently ice plans for $2.2 billion worth of natural gas power plants. The largest municipal utility in the U.S. put those plants on hold in favor of studying clean energy alternatives.
Under Jerry Brown, the Public Utilities Commission approved or saw built 15 natural gas power plants that needlessly added billions to consumer bills and nearly tripled the amount of excess capacity that the state requires utilities to build in. The CEC doled out the site permits all the while.
A Los Angeles Times investigation found that generating overcapacity will produce at least 21 percent more electricity than the state needs by 2020. Californians are paying $40 billion a year for their electricity, which is $6.8 billion more than they did in 2008 when state power use peaked. Electricity consumption has fallen since and is flat. Meanwhile solar power and battery storage technologies are expanding and dropping in price.
That investigation prompted lawmakers to call for dialing back on natural gas power plants.
Brown has been a big booster of climate-warming natural gas power plants despite his image as a climate change warrior, and has been known to intervene and advocate for specific power plants even when PUC commissioners were dubious.
Whether NRG and SCE’s move signals a sea change away from natural gas in favor of solar power and battery storage, or is merely a tactical move to scrap a fossil fuel project worth relative peanuts compared to others already approved and worth billions of ratepayer dollars, remains to be seen. But it is still something to celebrate.