White Papers

A California Muni Fights Back with an Advanced 50 Mw Combined Cycle Power Plant

By Frank Ryan, P.E. (City of Redding), Paul Bianchet (ALSTOM Power) and Todd Krankkala (POWER Engineers)

Introduction 

The Redding Electric Utility (REU) is the municipal utility for the City of Redding, California. In 2002, REU completed a major capacity addition project, the City of Redding Generating Unit #5 Plant Installation. This plant provides a nominal 43 MW baseload capacity addition. The steam generated by exhaust heat recovery from the new plant displace steam currently generated by natural-gas-fired boilers and used for an additional 11 to 13 MW of power generation capacity from an existing steam turbine. The new plant is built around an ALSTOM GTX100 light industrial gas turbine engine, the second of its breed to be installed in the U.S. ALSTOM intended and designed the GTX100 to be a high-efficiency industrial machine that would compete favorably in a size and application field largely dominated by aero-derivative combustion turbine engines. The new plant also includes the largest application of SCONOX NOx reduction technology to date.

The project was executed by Prenco Services, the turnkey project arm of ALSTOM Power, with POWER Engineers providing detailed design as ALSTOM’s engineer.

REU – A California Utility in an Enviable Position 

REU is a California utility in an enviable position: it has access to more power than it needs, and can sell the excess to other California entities who need it. Counting the output of its own power generation facilities (136 MW worth, including the new generation plant) and existing contracts with the Western Area Power Administration and others, REU has access to approximately 300 MW of capacity, while its own peak demand is 215 MW. REU’s current position is a result of an accurate strategic decision by REU’s management in the 1990s, to make costly expenditures in power plant infrastructure and long-term supply contracts in order to be able to contain future power price rises.

REU’s current position is also the result of the participation and support of REU ratepayers, who shared personally in the decision by REU’s management to invest up front in the expectation of future reward when the payoff comes. REU funded that investment program in the 1990s by a then-controversial 23 percent surcharge on customer bills: rates went from 8¢ to 10¢ per kilowatt hour, with the surcharge originally planned to expire in 2004.

Now, because of high revenues from excess power sales, REU scheduled the end of the surcharge for 2002, with customer’s rates dropping back to approximately 8¢. This pleasant electrical situation has been a strong factor in economic development in Redding, which offers manufacturers and businesses a refuge of power infrastructure stability and predictability.

Don’t Tread On Me – Diversification as A Defensive Weapon Against a Hostile Grid 

The new Redding combined cycle plant has innovative features: a new and exotic gas turbine engine, a high-performing NOx reduction system. But in many ways, the new plant is a continuation of an existing REU and City of Redding strategy to defend its citizens from potential depredations from outsiders, in a utility strategy similar to the medieval civic defense practice of pouring hot tar from the battlements upon attackers and extortionists from other towns far and near.

REU’s resource manager recently observed, “Forecasting can be difficult, especially when it pertains to the future.” Such forecasting difficulty has been most evident in California’s recently deregulated electric utility industry where market trends of the past are no indication of what the future may hold in store. The REU resource manager explained, “For example, we have seen wholesale market prices for electricity go from 4 cents per kWh on average to spikes of $1.50 per kWh and new averages around 18 cents per kWh. That translates to a 350% wholesale price increase. If such an increase were passed on to a typical household in Redding that uses about 1,000 kWh per month, the electric bill would soar from $100 to $240.” To hedge Redding’s ratepayers against vulnerability to this kind of volatility, REU has deliberately planned a diversified inventory of power sources. According to the Resource Manager, “REU’s electric resources consist of a balance of various fuel sources that include hydro, coal, and natural gas. Electric supply reliability is maintained by not having all REU generation resources located at any one site. REU has generation resources located within the city limits, in and around Northern California, and outside the state. By diversifying both fuel source and generation resource location, REU is able to maintain a highly reliable and cost effective power supply.”

In 2001, REU’s determination to protect the interests of ratepayers became most evident in the utility’s reaction to a threat levied by California’s governor to seize surplus power from California municipalities for use elsewhere in the state. REU Director James Feider’s reaction was a assertion – remarkable for its vigor in the normally staid electrical utility industry – of REU’s and the City’s historic concern the soundness of its electrical battlements: “The Governor needs to understand that when we have excess generation to sell, it is usually at the highest incremental cost to produce, and these costs must be passed on to protect those who invested in the system: the Redding community.”

He continued: “We will continue to work with the Governor and his staff to find the right avenue and make our excess generation available to them as long as the City of Redding is compensated on a fair return and a guaranteed payment. Additionally, we will make sales to the State, as long as we have the right to stop the flow of electrons and return this energy supply back to the City, if there is a need here at home.” He noted that REU could not justify selling power to the state at cost if it meant using up permitted run hours and then later having to buy power at the market price. “We have no intentions of selling low today, and having to buy high tomorrow.”

According to Feider, his community has had to make tough choices that over the years have paid off in stable prices and the highest reliability. REU notes that since 1997m Redding citizens have endured a 23 percent rate increase. “Because we have managed our resources well to eliminate debt,” Feider said, “we anticipate reducing rates for our community in 2002, two years earlier than originally projected.

The Repowering Debut of an Advanced High-Efficiency Combustion Turbine 

The Redding installation represents the second U.S. installation of the new ALSTOM GTX100 combustion turbine, intended to serve in a medium-sized CT market niche hitherto dominated by aeroderivative combustion turbines. The new Redding turbine, fired with natural gas, is fitted with an ATS/Express HRSG, which provides steam to drive an existing steam turbine at the REU plant to generate additional energy and achieve higher thermal efficiency. The HRSG utilizes state-of-the-art SCONOX technology to reduce NOx and CO emissions, as opposed to conventional SCR and CO catalyst technology.