AES Wants Limits Lifted on Plant

AES Corp. says it won’t be able to fire up two retooled power generators at its Huntington Beach plant unless officials rescind demands that it sell power to the state.

“If the condition is not removed from the permit, AES will be unable to operate the units,” according to legal papers the company filed with South Coast Air Quality Management District last week.

The company has received fast-track approval from the California Energy Commission to restart the gas-fired generators, which would add 450 megawatts to the state grid. But the company still must meet conditions set by the air quality board because the plant’s emissions would exceed regional pollution standards.

The generators were expected to start within the next two weeks.

The regional air district will meet today in Diamond Bar to hear appeals of the May permit issued to AES. Both the company and Huntington Beach have questioned the permit. The most pressing issue is a program that allows companies to buy “air pollution credits” from companies that pollute less.

Energy producers were exempt from that program until recently, when the state opened it to generators that enter into long-term contracts to sell at least half of the energy produced to the state.

AES was in negotiations to enter into such an agreement, but the state broke off discussions in June. Without an agreement, AES will be ineligible to apply for credits.

Also, a new federal price ceiling on the wholesale market in the West gives AES no incentive to sell to out-of-state buyers, the legal brief stated.