Romoland to become power center

By: CHRIS BAGLEY - Staff Writer | Saturday, December 3, 2005 9:55 PM PST ∞

ROMOLAND ---- This rural community off of Interstate 215 is poised to become a new energy center for western Riverside County, with a pair of electrical generators planned that could, according to one prominent developer, boost the value of industrial properties both nearby and throughout the region.

The two projects, the first of which is scheduled to break ground this week, are expected to begin generating electricity in the summer of 2008. Together, the two would cost $750 million and generate 1,275 megawatts of electricity at times of peak demand, enough for nearly 1 million households, according to the companies' estimates.

Calpine Corp. and General Electric Corp. plan to begin construction this week at a 50-acre plot on Antelope Road, just south of Pinacate Road. That $500 million plant is expected to generate 775 megawatts of power around the clock.

Edison Mission Energy, a sister company of the Southern California Edison utility, announced plans last week to build a $250 million, 500-megawatt station that could be switched on during summer afternoons and other times of peak demand to power the region's factories and air conditioners.

The company plans to begin construction some time in early 2007, assuming it receives the necessary permits and can negotiate long-term contracts. Edison Mission plans to have the plant, to be located on a 37-acre plot near the intersection of Palomar and Rouse roads, ready for commercial generation the following summer.

The extra gigawatt-plus of available energy will almost certainly lower ---- or at least limit any increases in ---- the price of electricity in western Riverside County and throughout Southern California, said Bob Wolf, chief executive of Germania Corp., a Moreno Valley-based developer that's active in industrial projects throughout the inland region.

Price and reliability of power is crucial to businesses deciding where to locate. The city of Riverside, which operates a municipal utility, has an edge over surrounding areas, which buy more expensive electricity from Southern California Edison, Wolf said.

"This, I know, has made the difference for several people making siting decisions," Wolf said.

Edison Mission hasn't sealed any deals to sell energy from its plant. (Though Southern California Edison and Edison Mission are co-owned, Edison Mission would sell the plant's energy on the open market through a competitive process, a spokesman said.)

San Jose-based Calpine will market the electricity from the other plant, according to General Electric spokesman Mark Reilly. Calpine spokesman Kent Robertson couldn't be reached for comment Friday.

It isn't clear how or whether Calpine's current financial woes would impact plans to build and operate the plant. The company is burdened by debt it racked up building several power plants in the late 1990s. A growing number of analysts have hinted in recent weeks that the company could seek bankruptcy protection after a Nov. 22 court ruling that it repay more than $300 million to bondholders.

Calpine's board of directors replaced its chief executive and chief financial officer Tuesday.

The company's shares plunged from $1.75 before the ruling to close at 28 cents Friday. The dramatic fall in the company's market value led Standard & Poor's to replace the company in its index of the 500 largest publicly traded U.S. companies.

Power from the plant, once it is completed, could very well be sold and distributed to customers throughout Southern California, Wolf said, and thus become a small but potentially significant factor in thousands of companies' decisions on where and whether to relocate.

Edison Mission's plant will be its first major plant built in the state since 2001, company spokesman Doug McFarlan said. Edison Mission plans to complete a similar plant in the City of Industry, in eastern Los Angeles County, soon after its Romoland plant.

The expected completion dates of the two plants coincide with California Energy Commission projections that demand for electricity could exceed supply in many parts of the state by 2008, forcing even industrial customers to cut back or shut down.

The commission's 2005 Integrated Energy Policy Report, the final version of which was released last month, repeatedly urged the construction of more electrical generating capacity and additional conservation measures.

Southern California Edison has already begun offering financial incentives to households and factories who volunteer to have air-conditioning automatically shut off at times of peak demand.

Earlier this year, that utility began to consider new ways to entice investment in new electrical generators.

The decisions on where to build the plants, too, had a lot to do with utilities and infrastructure, according to Wolf and representatives of General Electric and Edison Mission. Both will likely be cooled with reclaimed waste water, which is more cost-efficient than the drinking-quality water from the Colorado River or the northern California watershed.

Both have easy access to a nearby "brine line," which carries away water that is clean but laden with minerals. Both are just a few hundred yards from a main that will supply them with natural gas. And both are close to a station that distributes and transmits energy, and is operated by Southern California Edison.

The plants would require an extension of existing natural gas and other utility lines. Where these extensions go beyond the two plots where the plants are located, they could add to the value of nearby industrial plots, Wolf said.

Though electricity produced at the two new plants would flow into a larger grid and could theoretically become available across the state, the power would be most immediately available to utilities and users closer to the plants.

But homes sprouting out of the ground in places like Menifee hint that the region's power needs will increase. In announcing the two projects, both General Electric and Mission Edison cited recent projections that several hundred thousand people will move into the I-215 corridor between Riverside and Temecula in the next two decades.

That stretch of I-215 is lined with brokerages' signs advertising industrial land for lease.

Contact staff writer Chris Bagley at (951) 676-4315, Ext. 2615, or cbagley@californian.com.