Los Angeles approves $1.7 billion power proposal

Against the backdrop of a statewide power emergency, the Los Angeles city council Tuesday approved a sweeping $1.7 billion proposal to upgrade and repower 2,900 Mw of electric generating capacity owned by the municipal Department of Water and Power. The program is intended to help satisfy a growing demand for electricity, repower existing plants, add new capacity to meet super peak needs, and help finance the expansion with the sale of DWP's share of the Mohave power plant.


Against the backdrop of a statewide power emergency, the Los Angeles city council Tuesday approved a sweeping $1.7 billion proposal to upgrade and repower 2,900 Mw of electric generating capacity owned and operated by the municipal Department of Water and Power (DWP).

The program is intended to help satisfy a growing demand for electricity, repower existing plants in the Los Angeles basin, add new capacity to meet super peak needs, and help finance the expansion with the sale of DWP's share of the Mohave generating station. (OGJ Online, Aug.7, 2000).

Los Angeles has an old, inefficient power supply system, said DWP General Manager S. David Freeman. DWP has been able to supply its customers' power needs this summer, while the rest of California has endured weeks of power shortages. But Freeman said DWP can't afford to sit on its lead.

A central element of DWP's plan is a proposal to sell its share of the coal-fired Mojave power plant in southern Nevada and use the proceeds to help finance upgrades to its in-basin facilities. The DWP owns 20% of the Mojave generating station and must sell by September, if it is to participate in an AES Corp. proposal to buy out Los Angeles, Southern California Edison Co., and Nevada Power Co., for $600/kw. The Mojave plant is the biggest single source of sulfur dioxide emissions in the Southwest. DWP will also save about $75 million needed to upgrade pollution controls at the Mojave plant.

In turn, DWP would use about $190 million in profits from the sale of the Mojave plant to repower the Scattergood, Haynes, and Valley electric plants, while also adding about 500 Mw of new generating capacity. The three plants are natural gas-fired, but they don't meet new stiffer environmental restrictions on nitrogen oxide and other pollutants.

DWP proposes to modernize 10 units with more efficient combined cycle natural gas units which have state-of-the-art emissions controls. Freeman estimates repowering the units with modern equipment will cut NOx emissions by 65% by 2010.

Freeman said 300 Mw in combustion turbines will be ready to serve super peak needs next summer. Local generation cuts the risk of power lost through congested transmission lines and other outages associated with power traveling hundreds of miles, he said.

Renewable energy, distributed generation, and demand side management will add another 460 Mw to DWP's in-basin power supply, Freeman said. The Valley station will be completed in 2003, followed by Haynes in 2006, and Scattergood in 2008.

In addition to the proceeds from the Mojave plant sale, DWP's plan calls for cash funding the balance of the projects over a 10-year period to avoid additional debt. The DWP expects to pay off existing debt by July 2002 and has committed to lowering electricity rates by 5% in 2002 and 10% in 2003.

More in Pipelines