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Company looks to resurrect decrepit Bakersfield, Calif., power plant

By CHIP POWER, The Bakersfield Californian

Oct. 26, 2000 (Knight Ridder/Tribune)—The idea of reopening an old Pacific Gas & Electric power plant in the city limits got a warm reception from Mayor-elect Harvey Hall Friday.

Hall said he was positive of North American Power Group’s potential to reopen the plant at Coffee Road and Rosedale Highway in a way that did not deteriorate environmental quality.

“I’m sure as it progresses, we will have input from everyone,” said Hall, “and the environmental permit process will require it to have new technologies” that are cleaner than older generation plants.

Noting that the plant was close to the Northwest Promenade, which seems destined to become one of the city’s largest shopping areas, Hall said proposals to plant greenery and landscaping at the power plant site were especially welcome.

Industry estimates say it may take more than $9 million to retrofit the old PG&E plant in Bakersfield to allow it to produce juice again.

However, a principal in the ambitious plan, which would need several regulatory approvals to become a reality, said his company is up to the task.

Michael Ruffatto, president of the Colorado-based power group, conceded that a June startup date was an aggressive schedule to restart the plant, which was shut down 15 years ago because it cost too much to run.

As a storage yard for utility trucks and sundry items like spools of cable, the 159-acre site doesn’t look like it is on the cusp of renewal.

Locked gates keep out trespassers. Inside, cooling towers, emission stacks and a square-shaped building collect dust.

The main activity there Friday morning was a utility truck towing a long wooden pole down an empty access road.

“Inside, though, it really is a fully functional plant,” said Ruffatto, who was in Bakersfield Friday to meet with city officials to brief them on his plans, announced earlier this week.

He said the plant could provide enough electricity to power 200,000 homes and that with California facing an electrical shortage, market conditions were right for the plant to be reborn.

Ideally, the electricity would be consumed locally, he said. He plans to sell the power to PG&E. There was no assurance that the power would be consumed locally, PG&E said, because the rules for transmitting electricity in California were in a state of flux.

Ruffatto envisions operating the plant at a 200-megawatt capacity. As a general rule, one megawatt can light 100 homes.

He has proposed buying the plant and 124 acres for $500,000. Without the ancient facility, that works out to $4,032 an acre.

Real estate developers have said that the site would be ripe for commercial development, although questions about potential environmental problems lingering at the site might have discouraged some bidders.

The utility could not discuss the number of potential offers, said Tom Allen, PG&E project manager for power generation.

David Gay, a commercial real estate veteran in the city, said he found the announced purchase price “intriguing.”

He speculated that the relatively low price would enable the utility to shift environmental liability to the new owner.

Other potential purchasers who may have wanted to buy the property would have had their net acreage reduced by utility infrastructure that remained there, he added, such as transmission lines.

“Then, if you were going to tear it down, I imagine it would cost quite a bit to demolish something like that,” Gay said.

The plant, built more than 50 years ago, is no longer in an isolated area. In recent years, areas near the plant have experienced tremendous residential and commercial growth.

Along Rosedale Highway near the power plant, Bakersfield resident Frank Salvucci, who lives in the Haggin Oaks subdivision, said he thought the plant could be a plus for the community again.

“I’d rather that PG&E operate it, because that’s what they do,” said Salvucci, owner of a manufacturing company called Anthony Welded Product Inc., which has a plant in Delano.

“I don’t think anyone has any right to complain about it being in their back yard,” said Salvucci, who had stopped on Rosedale to buy a pumpkin. “What are you going to do? We all need power.”

North American, of Englewood, Colo., is a private company that already operates two smaller plants in the region, selling power to both PG&E and Southern California Edison Co. The first is called Rio Bravo Poso, a cogeneration facility about 18 miles north of the city located on a 17-acre oil field. The second, according to North American, is called Rio Bravo Jasmin, which is 15 miles north of the city located in another oil field.

One industry estimate put the cost of retrofitting the retired PG&E plant at $10 million; Ruffatto would only say that it would be in the millions of dollars, which he said would come from debt and equity funds.

PG&E said it will retain about 35 acres of land at the site and equipment like substations and transmission lines. Since 1996, the utility has been selling off its generating assets as part of statewide deregulation. In recent years, the site has been used for parking utility vehicles and storing supplies.

The sale must be approved by the state Public Utilities Commission. That’s not the only requirement, though.

Ruffatto noted the plan would be dependent on a host of environmental and other regulatory approvals. On a regional level, that would include an evaluation of air emissions.

Ruffatto said his company was also concerned about the visual appearance of the power plant and was committed to adding greenery and other landscaping to improve its aesthetics.

In the past year, the California Energy Commission has licensed five power plants with a combined generating capacity in excess of 3,600 megawatts, and three are expected to be on line sometime during the summer of 2001.

Of the sixpower plant siting cases before the commission for approval in Kern, only one has started construction. PG&E recently broke ground on the $500 million, 1048-megawatt La Paloma plant in the McKittrick area, the largest plant now being built in the state.

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© 2000, The Bakersfield Californian. Distributed by Knight Ridder/Tribune Business