Palmdale proposes sale of Power Plant

At a press briefing Thursday, city officials joined executives from Summit Power Group to share details of the proposed agreement and how it would benefit residents.

At a press briefing Thursday, city officials joined executives from Summit Power Group to share details of the proposed agreement and how it would benefit residents.

PALMDALE – The Palmdale City Council will consider the purchase and sale agreement of the Palmdale Hybrid Power Plant (PHPP) by and between City of Palmdale and the Summit Power Group, LLC at its next meeting on Wednesday, May 1, at the Palmdale City Council Chamber, city officials announced Thursday. (Read the purchase and sale agreement draft here)

The purchase of the project, which includes initial purchase price, development costs, development premium, 50 acres of land, transmission construction cost savings, and potentially additional acreage will bring the City of Palmdale $27.4 million dollars.

“The sale of the power plant will generate millions of dollars that will be invested back in our community,” Palmdale Mayor Jim Ledford said. “It will also create up to 600 high paying construction jobs for the project that can take up to 30 months. Once in operation, the power plant will provide up to 35 high paying jobs.  Plus, the plant will infuse up to $5 million dollars annually into our local economy, through the purchase of parts, supplies and items at local restaurants and retailers. Add to that the revenues generated by property and business taxes and it will have a tremendous positive economic impact for the region.”

In October 2012, the City released a Request for Proposals (RFP) for the PHPP.  “The City and its consultants met with and discussed the project with several firms that knew and understood the process of siting and building a power plant and could recognize the value of partnering with the City to complete the steps necessary to complete the PHPP,” wrote Palmdale’s Administrative Assistant Ben Lucha in a staff report on the project.

After receiving proposals in early 2013, staff began interviews with prospective partners.  “After the interviews, it was clear that Summit Power Group (Summit) had the right mix of experience, knowledge of the California Energy Market, and plan for the PHPP to take the project to the next level and bring the project to fruition while providing value to the City,” wrote Lucha.

“This project adds a stabilizing element to the electrical power grid that will enable renewable power generators to produce electricity more efficiently and with enhanced reliability,” said Palmdale’s City Manager Dave Childs.

Summit Power Group LLC, a Seattle, Washington based company, develops all types of energy projects, including carbon capture projects for enhanced oil recovery, natural gas, coal, wind, solar projects and other energy-intensive industrial projects using proven technologies. Summit also works with select new technology companies in related areas. Summit has led or had significant involvement in the successful development of more than 9,250 megawatts of projects either operating, in construction or in late stage development and has over $3 billion in projects in early stage development. For more information on Summit, visit www.summitpower.com.

City staff recommends moving forward with Summit for their broad experience, familiarity with California’s market and the fact that their proposal offered the most value to the City.  “Summit has worked on similar successful projects in California, across the Country, and internationally,” said Director of Public Works Mike Mischel.  “Beyond their experience, they have demonstrated a firm knowledge of an ever changing market and atmosphere to make the project a success.”

Artist's conception of the Palmdale Hybrid Power Projec

Palmdale Hybrid Power Project. (Artist concept)

According to the staff report on the project, there are “several scenarios across the State that will influence the need for the PHPP to be constructed and placed into operation in the near future.”

“A lot has happened in the energy marketplace over the past five years,” added Mischel. “Summit has the pulse of what is needed in terms of producing electricity, lowering emissions, ensuring the continued success of renewable energy sources and making it all happen in an economically viable manner.”

Some of those issues include: filling the need created by additional renewable energy sources that are unable to provide electricity consistently, particularly at night or when the wind is not blowing; the planned phasing out of “once-through” cooling plants; the State’s mandate to reduce CO2 emissions to 1990 levels; the phasing out of older coal burning power plants; the questionable future of nuclear energy in California; and increased demand for power as the economy and population increase.

According the Western Electricity Coordinating Council, the Regional Entity responsible for coordinating and promoting Bulk Electric System reliability in the Western States, major new generating capacity will be needed in Southern California in the near term.  According to their predictions, major shortfalls in energy production will start in 2017, which is when the PHPP is expected to come online.

“Those who remember the ‘brown-outs’ of the late 1990s and during the energy crisis of 2000-2001 know that we don’t want to go down that road again,” Mischel said.

“Summit will update the PHPP to make it a flexible capacity plant that can best address the issues facing us, especially the need to help balance variable resources such as wind and solar,” said Mischel.  “As a flexible capacity plant, it will utilize modern proven technology, consisting of highly efficient natural gas turbines with quick-start capabilities.  The turbines will be able to stay online at lower operating levels when energy needs are low and ramp up the quantity of power as needed.”  Palmdale is poised to become an important power producer in the Antelope Valley and the State of California. Currently in the City of Palmdale, there are 13 solar power projects under construction or in the planning stages, which will produce a total of 158 megawatts of electricity.

In addition, the City recently entered into a Power Purchase Agreement (PPA), with PsomasFMG who will install solar shade structures in the parking lots of several City facilities, selling the resulting energy to the City at a discounted rate.  It is anticipated that in the first year, the City will purchase the energy for approximately $283,500, saving over $63,000.  Through the life of the 20-year PPA, the City will spend approximately $7.8 million for the energy, saving approximately $1.4 million based on conservative estimates.  Palmdale will also retain the rights to the Renewable Energy Credits (RECs).

The PHPP is currently designed to produce 570 megawatts of electricity, which can service approximately 600,000 homes.

(Information via press release from the City of Palmdale.)

Previous related story: EPA issues permit to Palmdale Power Plant

UPDATED 5/2/2013: The Palmdale City Council on Wednesday, May 1, unanimously approved the purchase and sale agreement of the Palmdale Hybrid Power Plant (PHPP) by and between City of Palmdale and the Summit Power Group, LLC,

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  29 comments for “Palmdale proposes sale of Power Plant

  1. Michael Rives
    April 27, 2013 at 8:03 pm

    Let’s backtrack a little. Are cities in California suppose to meet a deadline coming up to show that they are becoming environmentally friendly? Does this apply to waste management or energy (gas and electric)? Does anyone know abou this?

    • John Mlynar
      April 27, 2013 at 10:47 pm

      Dear Mr. Rives: I do not know of a deadline coming up to show if cities are environmentally friendly, but I do know that Palmdale is very much so. We have over a dozen solar projects on the books; a major power plant that will help retire old coal and oil burning power plants; and several solar projects at various parking lots. We installed low energy air conditioning; practice water conservation at all our facilities; introduced xeriscaping throughout the city, practice recycling as a city and always look for ways to improve energy efficiency. Any suggestions are welcome.

      • Michael Rives
        April 28, 2013 at 7:12 am

        Thx for the info. I re-read the article and it mentioned reducing CO2 emissions to 1990 levels per state mandate. I think that I was alluding to because I have read about cities doing projects to meet this standard. I wonder if the energy projects (solar and natural gas) that both Lancaster and Palmdale are engaged in (and, of course, I disagree with both) are an attempt to meet these standards? Mm…You might throw in Lancaster’s upcoming BYD electric bus facility in the category of trying to meet the state’s standards in an indirect way as well as creating jobs. Finally, all of the projects mentioned in your post may help Palmdale meet the standards, so you guys may be good to go.

  2. John Mlynar
    April 27, 2013 at 7:37 pm

    Dear Nik, if one person finds gainful employment I rejoice. If 35 people find employment, I rejoice 35 times.

  3. Nik
    April 27, 2013 at 2:03 pm

    Wow we have roughly 200,000 people living here but you’ll supply us with 35 high paying jobs? Bravo for job creation.

    Sure, sure, you can come at me with all that they’ll employ during construction but that’s only 30 months! Then all those people will be with out a job, once again. 30 months of work wont buy you a house, hardly a car but will give the state plenty of tax money.

    Bravo.

    • William
      April 27, 2013 at 3:23 pm

      Darn. They shoulda never built the Golden Gate Bridge or Hoover Dam during the Depression because, y’know, once they were done, the workman were out of work.

  4. John Mlynar
    April 26, 2013 at 6:25 am

    While I do appreciate your opinion, I must respectfully disagree with you, Mr. Rives. It will take millions of dollars to run and operate the Palmdale Power Plant, and the $5 million dollars that is pumped back into the economy is much more than what will be spent on Big Macs. It will be for supplies and parts to run a high-tech, ultra efficient state of the art power plant. It will be in the houses purchased by employees, and all the money they spend at local shops and restaurants. In addition, with reliable power in the AV, it will help attract and retain businesses. Finally, there are tax revenues that the plant will generate, which help fund city programs like public safety and the like.

    I, for one, am proud that the cities of Lancaster an Palmdale, as well as the County, are doing tremendous work to help the AV and the state meet its power and emission goals. The success of renewable energy has been amazing; so much so that it has created a need for clean, efficient and quick starting power plants to fill the gaps in demand and supply that renewables do not meet. Any dust generated by solar can be mitigated; and to obtain permits for a natural gas plant, you must purchase emission credits. Those credits are at a 1 to 1 or 1 to 1.25 ratio. That means that you can’t build a power plant and “add” pollution without first ensuring that equal and more amounts of pollution are removed.

    I used to think that all that stuff was governmental nonsense. But having moved to Southern California in the early 80s and flying into the brown haze at LAX, I personally have seen a vast improvement in air quality, due to improvements in auto smog devices, and programs like emission credits. The more old coal and oil burning power plants we can replace with renewables and natural gas, the cleaner our air will be.

    • Michael Rives
      April 26, 2013 at 7:52 am

      Hey, I was born and raised in So Cal. I remember the smog so bad that your eyes watered on the way to school. Things didn’t really improve until the formula for gasoline was changed. We have already seen the effects of the solar plants with the recent wind storms. Even Mayor Ledford has acknowledged this on Channel 3 news and thinks it(sand storms from solar plants) can be mitigated. But now we are going to have emissions emitted in a densely populated area from the Palmdale power plant to their neighbors to the north. Bottom line: you don’t build a power plant in the middle of a populated area and you don’t build solar plants surrounded by loose sand and dust. I have spoken against every solar project agreed to by the Lancaster city council and I have campaigned against the Palmdale power plant, too. These are environmental disasters which we have only begun to see occurring.

      • John Mlynar
        April 26, 2013 at 9:22 am

        Mr. Rives, the modeling studies on the power plant show that if it were running at full capacity, pedal to the metal, there would be no significant impact beyond 400 meters of the steam tower. It is ambient air outside that range. Natural gas burns extremely cleanly and this plant is very, very efficient. Add to that all the mitigation and credits that will accompany this project and it meets the very stringent regulations required. May I ask if you have a natural gas stove or heater in your home? It burns so cleanly that you can have an open flame in your kitchen.

        • William
          April 26, 2013 at 2:56 pm

          John. I think some people have the impression that the exhaust from the power plant is like solid waste and that it will ‘land’ north of the plant on Lancaster and stay there.

          Well, if the wind is blowing, it will blow the exhaust beyond Lancaster and anywhere north of it and just keep it going as it’s dispersed over a large area.

          We all know, as shown by the building of the Walmart across from Quartz Hill High School, that if the tables were turned and Lancaster wanted to build a natural gas plant that would discharge in the direction of Palmdale, ol’ Rex and others in Lancaster would be behind it 150%.

          So, we can ignore the whining from the north.

          • sikntired
            April 26, 2013 at 4:42 pm

            Thumbs up Bill

        • Michael Rives
          April 26, 2013 at 4:18 pm

          So the Palmdale power plant is going to run on clean, natural gas. Thank-you very much because I have interest in a natural gas well. However, in order to reach the plant, the pipeline will go through a densely populated area. What if there is a leak? What if there is a terrorist attack? It will make the fertilizer plant explosion look like a small candle in comparison. You supporters do admit there will be emissions. You and I nor anyone knows what the effects will be in the wind tunnel environment we live in. This was a bad idea in the beginning and it is a bad idea now to build it in a densely populated area. I hope we have some Quartz Hill- type residents who will tie this up for years in court.
          By the way, they should also go fight the solar plants which are blights, also, on our environment, backed by the Lancaster City Council.

          • John Mlynar
            April 27, 2013 at 8:10 am

            Mr. Rives: You are correct that there will be gas pipelines for this project. There currently are gas pipelines on virtually every street in the AV where gas service is utilized, which is essentially every home and business. Some of the main gas lines are quite large and go through populated areas. When they are built they have a series of safety shut off valves/station which can be quickly switched on and off in an emergency.

          • John Mlynar
            April 27, 2013 at 8:54 am

            Mr. Rives: Yes, there will be emission. Just like there are emissions from automobiles, restaurants, airplanes, etc. I recently read where there are more emissions generated to create a Prius than a conventional auto. Yet, the final product–the Prius—helps reduce overall emissions. This power plant, by providing reliable, affordable and clean power will enable the older, less efficient and dirtier coal and oil burning plants to come off line and help reduce emissions overall. Plus it helps make solar and wind even more effective by filling in the gaps in which they cannot meet the demand on the grid. All the mitigation and credits that the project requires will result in overall lower emissions.

    • ...
      April 26, 2013 at 10:41 am

      While I agree that Nat gas is better than a coal or oil fired plant, I think you inflate the benefits people will see from this. What if these 35 employees are already residents? If they are, they already have homes here, so there is no benefit realized with “new homes purchased”. I also don’t think there would be a large benefit from “supplies and parts”. What Palmdale company currently sells parts and supplies for a high-tech power plant? Most of those parts will be purchased elsewhere. I also have a problem believing a company looking to relocate somewhere cares about a power plant being here, so I don’t see how this will “attract and retain businesses”.

      I’m also curious how dust storms are mitigated (at least in some meaningful way). Seems to me, the only way to mitigate that is not to have large areas of unprotected desert.

      • John Mlynar
        April 26, 2013 at 12:53 pm

        Mr. …, you are absolutely correct that natural gas is much cleaner than coal and oil—about twice as clean as coal. I must disagree with you on your assessment of the values of jobs created by this project. 600 jobs will be created for up to 30 months in the creation. These will be good paying jobs. Then there will be permanent jobs—stable permanent jobs for generations. As someone who commuted down below for 17 years, the opportunity to work here at home is most welcome. Considering our Valley’s high unemployment levels, the 12-16 percent of people without work will undoubtedly benefit from the opportunities presented here.

        I also disagree with you that most of those parts will be purchased elsewhere. Places like Home Depot, Lowes and (INSERT A WISE ENTREPRENEUR HERE) will certainly capitalize on this opportunity.

        I am sorry you have a problem believing that companies do not consider energy reliability and costs in their relocation or decisions, but my experience has shown me otherwise. In fact the genesis of this project years ago was the question of whether there would be reliable energy. I’m guessing you are old enough to remember the brown outs. Experts are telling us they may be back. This power plant, along with all the other new renewable projects coming on line will prevent that.

        Also, CALISO has indicated that there is a need for power plants to fire up quickly and bring power to the grid during times when sources from renewables are unable to meet the demand. Renewables have been very successful and will continue to be. A plant such as this which can fire up quickly and burn cleanly helps keep renewable viable, provides the electricity we need and because it burns cleaner and more efficiently, enables the retirement of older, dirtier coal and oil power plants.

        As for dust storms, more dust and dirt generated when the surface of the land is broken up for development. In my opinion that can be easily mitigated by covering the newly disturbed ground with some sort of emulsion or ground cover. In my own personal opinion, I don’t think that should stop development.

        As for large areas of unprotected desert, isn’t that what the Mojave Desert Preserve was created for?

        • Nikolas
          April 26, 2013 at 2:41 pm

          ^^ LIKE!

          • John Mlynar
            April 27, 2013 at 10:48 pm

            Thank you Nikolas!

  5. Hello
    April 26, 2013 at 6:16 am

    Here goes Jimbo again. Wow, the people that moved up here for the cleaner air, will leave if plants like this get built. Does he ever actually make decisions that benefit the community and not just his pocketbook?

    • William
      April 26, 2013 at 7:45 am

      Is that you, Rex?

      • OT
        April 26, 2013 at 2:29 pm

        If it walks like Rex, talks like Rex, and looks like Rex, well……..
        Wonder what it is that makes Rex so jealous of Jim? Maybe it’s the fact that Jim can actually appear in a local parade without fear of being Booooooooooooo’d?

        • William
          April 26, 2013 at 2:48 pm

          “The truth gets communicated”

          Parris is a jerk and we all know it.

          Mayor Ledford has been a great mayor for Palmdale and we all know it. He doesn’t have to pat himself on the back all the time like Parris does in his smarmy, silly, obvious way.

      • Not Enthused
        April 27, 2013 at 10:42 am

        You know it’s Rex! Rex can’t stand the fact that people like Jim Ledford and despise him. Not only that, he can’t stand the fact that there might be industry in the Antelope Valley that he didn’t get a little piece of through one of his LLC’s. In Rex’s world, you gotta “pay to play.” Just ask some of the folks building stuff in Lancaster now…..

    • John Mlynar
      April 27, 2013 at 7:41 pm

      Dear Hello: take a look at the projects documents at http://www.energy.ca.gov/sitingcases/Palmdale. You will see how clean this project in, and what mitigation and credits will be a part of the project. This power plant will help take dirtier coal and oil burning plants off line and provide the electricity we need when renewables are unable to meet the demand.

  6. Michael Rives
    April 26, 2013 at 12:25 am

    Huh? The project when completed will generate $5 million dollars for Palmdale by the purchase of parts, etc, through restuarants,etc. Let’s see: the plant will have 35 full time employees. Man, that is a lot of big Macs. Come on, Jim. The Lancaster solar plants are an environmental disaster creating the worst sandy storms in memory. What’s this power plant do? How about polluting the AV, for starters? You and Rex oughta get out of the power business and focus on the basic needs of your two cities.

    • wow
      April 26, 2013 at 6:14 am

      Worst sandstorms in memory, you obviously have not lived here very long.

      • OT
        April 26, 2013 at 2:30 pm

        Being on Old Timer here, I can attest to the fact that we haven’t seen a sand storm like the one couple weeks back in decades.

        • Nikolas
          April 26, 2013 at 2:40 pm

          I’ve lived here since 1989.. which is old-timer enough.. And I can say I HAVE seen sand-storms that bad, back in 1990-1991… Hmm.. And what was similar back then? We were in a drought.. :-)

          Frankly, the sand-storms we had a few weeks ago were amplified MORE by the fact that we have had VERY little rain since January, than the solar developments in the Western AV. Take the total acreage of land in the AV, divide by the total acreage of solar developments.. and you’ll end up with a VERY small % of land that is solar development. Those are the facts. deal with it, and move on. ;-)

          • OT
            April 27, 2013 at 11:22 pm

            90/91? Thanks for proving my point.

Comments are closed.