Three of four La Paloma California units off line

LOS ANGELES, March 17 (Reuters) - Three of the four natural gas-fired power units at the La Paloma power station in Kern County, California went off line either Sunday night or Monday, according to a report from the California Independent System Operator.

Some of the curtailed power output was due to planned work at the three units, but some of the lowered output was due to unplanned work, the report by the state power grid operator said.

La Paloma has four similarly sized units at the 1,022-megawatt power station. Three of them were off line -- Units 1, 2 and 3.

The La Paloma Generating Company owns the station, and Complete Energy Holdings owns 60 percent of La Paloma Generating Co.

Last week, Moody's Investors Service said La Paloma Generating Company may be downgraded in part because of poor operating performance at the Kern County power plant.

The La Paloma power station is relatively new, having opened in 2003.

Last November, the privately held and Houston-based Complete Energy said it had hired JPMorgan to advise it on strategic alternatives in connection with its 60 percent stake in the La Paloma plant and its 96.3 percent interest in a 837-megawatt Batesville, Mississippi natural gas-fueled power plant.

Another Houston-based company, KGen Power Corp, last October paid $35 million to get out of a June 2007 agreement to buy the Batesville and Kern County plants.

KGen said in a release that several factors contributed to the decision to terminate the transaction, including lengthy, unplanned outages at the plants and prevailing conditions in the capital markets.

Both the La Paloma and Batesville plants have struggled to be profitable after being built earlier this decade during a period of low wholesale power prices, leading to financial problems and a series of ownership changes. (Reporting by Bernie Woodall)