Calpine's Sutter Energy Center struggles to find business

Calpine's Sutter Energy Center west of Yuba City faces a tenuous future, with no contract in hand to provide electricity in 2012.

Two state agencies are working to keep the natural gas plant, which opened in 2001, operating until there's enough demand in California again for electrical supply.

"It's not our desire to retire this plant," said Joe Ronan, a senior vice president with Calpine Inc. "It's just the state of the market at the moment."

The local plant is located on agricultural land on South Township Road.

California's severe and by some estimates continuing recession has led to a downturn in electrical demand in the state, in contrast to the energy crisis of nearly a decade ago, when the center opened at nearly the optimal time.

Under one measure to keep the plant operating, the California Independent System Operator is seeking to preserve the plant's 578-megawatt capacity for when it might be needed again, perhaps not for another five years.

The CalISO is asking the Federal Energy Regulatory Commission for a waiver to allow the capacity to be acquired under the operator's auspices sooner, though there's no given timeline for when the commission will rule on the request.

As well, the state Public Utilities Commission will hear a presentation on Feb. 16 on ordering a sale of electricity from the plant to the state's three public utilities, including the Sacramento Municipal Utility District, for 2012.

Ronan said either option would keep the plant operating.

"We're hopeful that'll be the case," he said.

If neither option happens, Calpine could have to begin moving the plant into retirement, essentially shutting down its operations and locking the gate.

In that scenario, Ronan said, the plant's roughly 30 employees could be transferred to other Calpine plants, none of which are in Yuba-Sutter.

And evolving environmental regulations make it unlikely the plant, once retired, could be reactivated again, he said, even though its reliance on air cooling makes it more environmentally friendly than other plants set to be retired in upcoming years.

"The problem is once you retire a plant in California, it's very difficult to get it repermitted," he said.

Sutter County officials support keeping the plant operational, said spokesman Chuck Smith, pointing out the plant generates property taxes, and Calpine contributed $2 million to a fund for local flood control.

Ronan added the plant also had several vendors who helped contribute to the local economy.

"It's been a pretty big economic engine for the area," he said.

Supervisor Larry Munger, who supported opening the plant during its contentious approval process in the late 1990s, said it would be foolish to shut it down when the state's energy demand will inevitably rise.

"It would take probably 10 years to even get it permitted again," he said. "We're going to have growth in the future. We're not building any more dams, and we're not going with nuclear."

But if shuttering is its fate, not everyone will be sad to see it go.

Joan Joaquin-Wood, who owns farming land within a few miles of the plant, said a better location would have been in the Sutter Buttes, instead of the rice field on Township.

"I know the asthma rates are still higher in Sutter County than in most other places in California," said Joaquin-Wood, who splits time between San Francisco and a home in Sutter. "It was placed in the wrong place, and the emissions are still there."

CONTACT Ben van der Meer at bvandermeer@appealdemocrat.com or 749-4786. Find him on Facebook at /ADbvandermeer or on Twitter at @ADbvandermeer.