NRG Signs Power Purchase Agreement With SCE

Power generation portfolio operator NRG Energy has executed a 10-year power purchase agreement to provide 550MW of new generating capacity to Southern California Edison at its existing El Segundo facility in California.

This new gas-fueled capacity, located in a critical reliability area, is expected to be online at NRG’s El Segundo generating station by June 1, 2011, in time to support the expected summer peak on the Southern California Edison (SCE) and California Independent System Operator (CAISO) systems.

NRG’s El Segundo generating station provides up to 670MW of power. By replacing units one and two, that were retired in January 2003, the facility will be repowered using rapid-response combined cycle technology in order to meet current and future energy demand.

NRG noted that these new units offer significant environmental benefits including reduced emissions, and use 30% less natural gas than the prior units, helping California meet new greenhouse gas standards.

In light of California’s growing energy demands, as well as continued tight reserve margins in the southern California portion of the grid, the California Public Utilities Commission (CPUC) authorized SCE to procure up to 2,000MW of new generation capacity. NRG’s contract at El Segundo, which is subject to CPUC approval, is part of the solution sought by the CAISO and CPUC, and proposed by SCE.