California okays Energy Investors 400-MW plant

LOS ANGELES, Dec 19 (Reuters) - Construction was approved on Wednesday for an Energy Investors Funds 400-megawatt peaking natural gas-fired power plant by the California Energy Commission.

The single-cycle plant will deliver peak hour power in a 20-year contract to Pacific Gas & Electric Co.

The commission voted 5-0 to approve the $300 million Panoche Energy Center which will sit on 13 acres (5.3 hectares) southwest of Mendota in western Fresno County.

The plant's owner will be private equity fund manager Energy Investors Funds through an entity called Panoche Energy LLC. Thirty-year-old ELF has offices in New York, San Francisco and Boston.

The plant is to begin operations in August 2009 and construction is to start in January 2008.

It will connect to the existing Panoche substation nearby.

A peaking power plant is one that does not contribute to the power grid unless demand is high. The utility PG&E Co is the main subsidiary of PG&E Corp. (PCG.N: Quote, Profile, Research, Stock Buzz) based in San Francisco. (Reporting by Bernie Woodall; Editing by Marguerita Choy)