Story updated at 1:20 p.m. Oct. 6:

A California Energy Commission committee assigned to evaluate the Puente Power Project announced Oct. 5 that the project did not meet regulatory standards and it would not recommend approval.

The preliminary opinion was not an actionable decision, but came in response to a letter sent Sept. 29 by the California Independent System Operator, or CAISO, recommending a new request for offer process to evaluate the feasibility of renewable energy or preferred energy resources.

Submitted by Houston-based NRG Energy in 2015, the Puente proposal calls for a 262-megawatt natural gas-fired plant at the site of the current Mandalay Generating Station in Oxnard.

The committee’s letter said the project would “create significant unmitigable environmental effects” that would require the CEC to override current laws, ordinances, regulations and standards.

Presiding Committee Member Janea Scott and Commissioner Karen Douglas wrote that they intended to recommend denial of the project, but “that decision is entirely discretionary and allows the Energy Commission to consider the balance of any project benefits against the impacts the project will cause.”

The project is running up on a deadline, as the Mandalay station is due to be retired by 2020 in accordance with a regulation that bans seawater cooling for power plants.

“While we have no current information about whether an expedited RFO is forthcoming, the timing constraints identified by the California ISO lead us to conclude that it is prudent to communicate the Committee’s position before we complete the (Presiding Member’s Proposed Decision),” Scott and Douglas wrote.

According to a Menlo Park nonprofit renewable energy advocacy group called the Clean Coalition, the California Public Utilities Commission also indicated a desire Sept. 28 to reevaluate its previous approval of the Puente proposal.

The same day, the CPUC voted to deny the proposal to refurbish another NRG-owned gas-fired power plant — the Ellwood Generating Station in Goleta.

NRG contends that a gas-fired plant is necessary to prevent blackouts in the case of a transmission failure.

“We are very disappointed that the California Energy Commission has stated its intention to deny the permit for the Puente Power Project. We believe the record fully supports the approval of Puente,” said David Knox, an NRG spokesman. “NRG favors California’s move to a carbon free electrical grid, but remains concerned about local reliability during the transition.”

Renewable energy resources could come online more quickly than a new power plant, said Ellison Folk, an attorney with Shute, Mihaly & Weinberger LLP, representing the city of Oxnard.

“A lot of the kinds of preferred resources just don’t have the kinds of infrastructure and capital costs that a new power plant from the ground up would,” Folk said. “I do think it requires the focus of the CPUC, SoCal Edison, the Energy Commission and CAISO to move this forward, but it’s definitely doable.”

A report CAISO released in August determined that solar, storage and demand response energy sources could meet the expected demand in the Moorpark Sub-Area region, which extends from Goleta to Moorpark and inland through the Santa Clara River Valley. It said that renewable and preferred resources would likely cost more, but it was not intended to serve as a feasibility study.

“New local capacity resources should be in place and operational prior to the summer 2021 peak-load period,” the organization said in its Sept. 29 letter. “As a result, SCE and the CPUC would need to expedite any new RFO for preferred resources in the Moorpark sub-area. With just over three years before the once-through-cooling compliance deadline, there appears to be an opportunity to conduct an expedited RFO and operationalize preferred resources prior to the summer 2021 timeframe.”

Continued operation of the Mandalay 3 unit, which does not use seawater cooling, would offset energy needs by 130 megawatts.

The state could also choose to extend the deadline for the retirement of units 1 and 2, giving the city more time to construct solar and storage projects, said Oxnard Mayor Pro Tem Carmen Ramirez.

“It’s not an emergency,” Ramirez said. “Yes, we want to shut the cooling plants down. But rather than saddling Oxnard with another 30-40 year project with fossil fuels, why don’t we give it another couple years?”

Knox added that NRG is evaluating its options, but that it is too early and the situation has too many variables to determine whether or not it would want to participate in a new RFO process.

• Contact Marissa Nall at mnall@pacbiztimes.com.