Baja California provides a huge manufacturing base for many Orange County companies, but the Mexican state also has been selling Southern California one of the hottest commodities around: electricity. And it’s adding the capacity to offer more.
A few months ago, the state Department of Water Resources took control of buying 50 megawatts of electricity per day from Baja, using power lines owned by San Diego Gas & Electric and controlled by the California Independent System Operator.
Before that, Baja had been selling surplus power directly into the U.S. wholesale electricity market.
The Department of Water Resources, previously in charge solely of water, was cast in the role of power buyer after the Pasadena-based Power Exchange Corp. collapsed earlier this year.
The Mexican power isn’t enough to solve California’s electricity crunch but could provide a cushion this summer. Moreover, two Baja plants in the works could play a role in resolving the state’s energy shortfall down the road.
Boston-based energy company InterGen Corp. is building a 765-megawatt plant six miles south of the border near Mexicali, with a third of that generation capacity slated for export to California once the plant comes online in 2003.
InterGen, a joint venture of Bechtel Enterprises and the Royal Dutch/Shell Group, also is building transmission lines to carry the electricity north.
San Diego-based Sempra Energy, which owns San Diego Gas & Electric, has started building a 600-megawatt gas-fired power plant, also in Mexicali, with all the output expected to go to California. It, too, is building the necessary transmission lines.
“We’ll be able to sell electricity on either side of the border,” Sempra spokesman Michael Clark said.
To sell power, the plants first will have to obtain an electricity export permit from the Mexican Energy Regulatory Commission, and a presidential permit to import electricity from the U.S. Department of Energy.
Like the InterGen plant, Sempra’s Mexicali plant is expected to begin operation in 2003, about a year after the North Baja Pipeline is set to begin delivering natural gas from Arizona to Baja’s businesses and power plants.
The $230-million, 215-mile pipeline is being jointly developed by Sempra, San Francisco-based PG & E; Corp.’s National Energy Group and Mexico-based Proxima Gas SA de CV.
“Building power infrastructure in Mexico won’t be part of any shorter-term fix, but the potential is there,” a power official said, asking to remain unnamed.
For now, Baja’s maximum daily power plant production is 1,600 megawatts, but demand there only is for 1,200 megawatts, according to the Princeton, N.J.-based North American Electric Reliability Council, a power industry-sponsored group. On average, one megawatt per day can power about 1,000 homes.
But Baja’s potential surplus of 400 megawatts is rarely achieved, though, with plants often down for maintenance or other reasons.
Baja’s electricity grid and gas pipelines have few connections to mainland Mexico, making the country’s interior an impractical market for energy generated in the region. But experts say Baja isn’t likely to become a huge exporter of surplus power to California.
Two transnational power lines,one connecting San Diego with Tijuana and the other running between Calexico and Mexicali,currently provide the only high-voltage delivery of electricity between Mexico and the rest of North America.
Combined, the lines can handle 400 megawatts a day, according to the ISO.
Without new transmission lines, industry observers say Mexico faces challenges in sending large-scale electricity exports to the U.S.
And Mexico has a vastly different, but still problematic, regulatory structure than the U.S. Mexico’s environmental rules are less stringent, but the approval process for new plants is considerably more complicated.
“It’s hard to get a long-term plan agreed to and supported, since you don’t know who you’ll be dealing with in Mexico six months from now,” a power official said. “Plus you have the same challenges as building a plant in, say, Montana, where there also is plenty of room but you still need the transmission infrastructure to move the electricity around.” n
