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FOR IMMEDIATE RELEASE - November 26, 2003

KRCD POWER APPLICATIONS INITIATE REGULATORY, ENVIRONMENTAL REVIEW OF PEAKER POWER PROPOSAL

KRCD Power is launching the permitting and environmental review process for a peaking power generating facility that the Kings River Conservation District plans to develop and build near Malaga to provide additional electrical energy reliability to the Fresno area.

After several months of preparation, the District is submitting a pair of important applications to regulatory agencies that are crucial to making the new generation capacity a reality by early 2005.

  • Tomorrow, November 26, an application to the California Energy Commission (CEC) for a small power plant exemption will be submitted, beginning a process under which the Energy Commission would, in effect, perform review under the California Environmental Quality Act on the project. KRCD Power officials believe it is likely a mitigated negative declaration of environmental impact will ultimately result to clear the way for the District to obtain the necessary permits to build the facility.

  • In early December, an application will be filed with the San Joaquin Valley Air Pollution Control District, seeking authority for a construction permit for the gas-fueled generating facility. The air quality permit review process will run concurrently with the CEC's environmental review.

An 18-acre parcel in an industrial area near the community of Malaga, on the south side of Fresno, has been selected for the project. This site was selected following an extensive site selection process involving 24 potential sites within the KRCD service area.

"This project will improve energy reliability and stability to the customer and the system," said KRCD General Manager David Orth. "The Fresno area has long been identified as being energy short. KRCD Power is committed to assisting the area's electrical utility in meeting this shortfall while looking for ways in which customers can eventually realize savings and even greater reliability."

The facility's two generating units will have a combined output of 97 megawatts, enough to serve over 90,000 homes. All of the new generation will be used to provide energy to meet peak demands in the Fresno area. Under a 2002 settlement with Williams Energy, the state of California received six gas-fired turbine-generator sets. The state has provided two of these units to KRCD Power at no cost. KRCD Power agreed to find sites for the facilities, obtain all permits, finance, construct and operate the new generation. The agreement covers 10 years. During that time, the California Department of Water Resources is to acquire all energy produced by the plant and pay its fixed and variable costs, including debt service, as long as KRCD Power meets strict plant availability requirements.

Jack Sinor, KRCD Assistant General Manager-Chief Engineer and Project Manager, said decisions are expected from regulators by late May 2004. "We are in the process of pre-qualifying potential contractors to handle the construction," Sinor said. "We plan to release bid documents in early January 2004."

At the same time, the District is working with Pacific Gas and Electric Company to finalize an electrical energy interconnection with the PG&E system. Plans call for construction of a half mile of 115 kV transmission line to link the generating facility site with PG&E's Malaga Substation.

"All of the electricity KRCD Power will generate in Malaga will go directly into the PG&E system to permit the Fresno area to cut back on its power imports to meet peak demands," Orth said.

Sinor said the District anticipates issuing approximately $42 million in revenue bonds to construct the Project which will be wholly repaid with revenue from power sales. The financing will probably occur next June once all regulatory approvals have been received.

KRCD Power hopes to begin construction in July 2004 and have the two units ready to provide commercial peak-demand electrical energy in February 2005.

"We continue to be very pleased that the state sees KRCD Power as an agency that can meet the energy needs of the Fresno service area," Orth said. "KRCD has a record of energy generation success that spans nearly two decades at our Pine Flat Power Plant. These plants will further build on the District's desire to improve the energy situation for our region."

The Kings River Conservation District is a multi-county special district created in 1951 by a special act of the California State Legislature. KRCD serves the constituents within its 1.2 million acre service area covering portions of Fresno, Kings and Tulare counties.

KRCD's mission is to provide flood protection, achieve a balanced and high quality water supply, and develop power resources on the Kings River for the public good.

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Note: Photos available in electronic format upon request. Please contact Cristel Tufenkjian, 559.237.5567. email: ctufenkjian@krcd.org