The utility, which last year agreed to buy a portion of the plant's potential output, also chose to purchase the plant's remaining capacity recently.
The 10-year agreements are critical for obtaining financing for the $440 million project, according to the developer, Competitive Power Ventures Inc. Kevin Cini, vice president of energy supply and management for Southern California Edison, said the utility supports development of the power plant because it would be in a hot, fast-growing area where there is rising summer demand for electricity. Cini said the Competitive Power Ventures project also won Edison's favor in competition with other proposals because it is designed with the latest and most cost-effective technology.
The generators would be able to kick into operation quickly during periods of peak demand.
"Basically we are doing this for system reliability," Cini said.
Southern California Edison plans to buy all of the electricity generating capacity of the plant, he said. He said that then, the electricity the plant produces will be auctioned under state guidelines into the region's electricity retail market. The bidders could include Edison, municipal utilities and other private providers. Construction of the Sentinel CPV power plant is contingent upon licensing by the California Energy Commission and approval of Southern California Edison's power-purchase agreements by the California Public Utilities Commission.
If government approvals are obtained, construction would begin in early 2009, said CPV project manager Mark Turner. Turner said five generators capable of producing 455 megawatts of power during highest demand periods will go online by August 2010, and another three generating units capable of delivering 273 megawatts will start operating by May 2012. Turner said the power plant would be the first built in California by Competitive Power Ventures, a privately held company based in Silver Springs, Maryland. The company has a regional office in San Francisco and is seeking to expand in California because of the state's need for new generation capacity, Turner said.
The Sentinel power plant is expected to be built on 37 unincorporated acres, five miles north of Palm Springs and conveniently close to an Edison substation so electricity generated at the plant can feed into the state transmission grid. The plant site is surrounded by wind farms and transmission lines, Turner said, and is compatible with existing land-use zoning. Turner said because the power plant is designed to come online only when the region's demand is greatest, it is expected to operate only about 15 percent of the time.
Environmental issues will be addressed during the permitting process by the California Energy Commission and Southern California Air Quality Management District.
One area of potential dispute is how water will be provided for the plant. Turner said it will need 550 acre-feet of water a year, which he said compares to the requirement of a nine-hole golf course. He said his company plans to pump the water from onsite wells.
Turner said the company proposes to finance conservation and reclamation projects that would conserve enough water to replace what it uses, and also to import enough water to replenish the underground aquifer. However, Randy Duncan, president of the board of Mission Springs Water District, said he has concerns that the water that Competitive Power Ventures plans to use to recharge the water basin would degrade the area's exceptionally high-quality drinking water.
He said he hopes the company and water district can resolve the issue. Turner said the economic benefits the plant could include about $5 million in annual property tax revenue. He said 350 workers representing a $40 million payroll would be employed during the plant's construction. After construction is completed, he said, the plant's operation would provide 14 jobs with an annual payroll of $1.3 million.