Carlsbad to get seaside property in deal with 2 utility companies

The Encina Power Station provided electricity to the Carlsbad region for decades but was retired on December 11, 2018, and replaced the following day by the Carlsbad Energy Center.

Power Play: Carlsbad's Coastal Evolution Through Energy Development

After decades of complex negotiations and shifting power dynamics, the City of Carlsbad has reached a significant milestone in its relationship with San Diego Gas & Electric (SDG&E) and Cabrillo Power. A deal finalized on April 20, 2025, will transfer six acres of prime seaside property to the city, including land currently occupied by SDG&E administrative offices, a small park that the city has been leasing, and other valuable property along the ocean and Agua Hedionda Lagoon.

A History of Energy at the Coast

The story begins in 1954 when the Encina Power Station was constructed, becoming one of the major suppliers of electricity for the San Diego region. For decades, the facility with its iconic 400-foot smokestack served as both a functional power plant and a landmark visible from miles away.

The original plant used both oil and natural gas to generate electricity, requiring 12 to 18 hours to start up while releasing emissions during the process. After 64 years of continuous operation, the Encina Power Plant ceased power generation on December 11, 2018.

The decommissioning of the old plant marked the end of an era for Carlsbad. When initially built in 1954, the plant featured four smokestacks, which were later replaced in the 1970s by the single 400-foot smokestack that became synonymous with Carlsbad's coastal identity. At the time of construction, it was one of the tallest structures on the West Coast.

The Transition to Modern Power Generation

Replacing the aging Encina facility is the Carlsbad Energy Center, a smaller, more efficient natural gas "peaker" plant. This modern facility can be fired up in just 10 minutes to meet sudden demands on the power grid, such as during heat waves or when transmission lines fail.

The new plant's rapid response capability represents a significant technological improvement over the older Encina station, which required up to 18 hours to ramp up to full power. Additionally, the Carlsbad Energy Center incorporates more environmentally progressive technology, generating electricity more efficiently with less fuel and fewer emissions. Unlike the old plant, it uses an air cooling system rather than ocean water cooling, which helps protect marine life in the adjacent Agua Hedionda Lagoon.

A Complex Agreement Years in the Making

The recent agreement stems from a 2014 settlement in which Carlsbad dropped its legal opposition to the construction of the new power plant. City officials had argued that the coastal location was inappropriate for another industrial facility. The original deal specified that Carlsbad would receive up to 16 acres, including the entire space occupied by SDG&E's north coast service center, if a suitable alternative location could be found.

After nearly a decade of negotiations, the final agreement gives the city less land than initially hoped—approximately 6 acres instead of the earlier estimates of 10 acres or more. However, the "seaside option" includes additional benefits such as undeveloped property along the northern shore of Agua Hedionda Lagoon and access to a proposed trail system.

The complexity of the negotiations involved evaluating more than a dozen potential sites for relocating the service center, all of which were eventually ruled out. In 2023, SDG&E and Cabrillo proposed reconfiguring the existing service center, moving parts closer to the railroad tracks to free up coastal property for the city.

Environmental Impacts and Lagoon Management

The Agua Hedionda Lagoon has been significantly affected by power operations over the decades. Since the construction of the Encina Power Plant in 1954, the lagoon's ecology has been altered as the power-generating units took water for cooling purposes, reducing the volume of water available to naturally flush the lagoon inlet. This resulted in sand accumulation (approximately 138,000 cubic yards annually) within the Outer Basin.

Ironically, before the power plant was commissioned in 1952, the lagoon was stagnant, living up to its Spanish name "Agua Hedionda" which literally means "stinking water." For over 50 years, power plant operators have regularly maintained the lagoon and dredged an opening to the ocean to sustain their source of cooling water.

This maintenance has transformed the 388-acre lagoon into a thriving coastal ecosystem open to the public as a passive recreation area. Today, it's popular for activities including walking, paddleboarding, kayaking, waterskiing, and jet skiing.

Future Implications

For the Environment

The transition from the old plant to the new has reduced environmental impacts in several ways. The Carlsbad Energy Center uses air cooling rather than ocean water cooling, eliminating concerns about marine life mortality from water intake systems. Additionally, the new plant has a smaller carbon footprint than traditional power plants due to its improved efficiency.

Under the new agreement, SDG&E will move its operations center to the east side of the property in a land swap with Cabrillo, while a new trail system will be constructed east of the Carlsbad Strawberry Fields property. SDG&E will also contribute $1 million for the city to develop the Hub Park trail system, which will include access through two pedestrian tunnels beneath Cannon Road that were previously installed but filled in.

For Power Supply

The new Carlsbad Energy Center produces about 530 megawatts of flexible power for the region, designed to operate as a peaker plant during periods of high demand. Compared to other peaker plants in the San Diego region, it's projected to have the lowest greenhouse gas emissions at half a metric ton per megawatt hour.

Critics have questioned whether a fossil fuel plant was necessary at all, suggesting that alternative zero-emission technologies like battery storage might have been viable alternatives. NRG representatives counter that battery technology, while promising, was not yet economically or technically feasible for providing reliable backup power during extended outages.

For Carlsbad Citizens

The agreement represents significant benefits for Carlsbad residents. The city will gain several parcels of valuable coastal property, including Cannon Park (which it previously leased), land currently occupied by SDG&E administrative offices, a grassy blufftop viewpoint on the northern shore of the lagoon, and access to hiking trails on hundreds of acres owned by SDG&E on the south side of the lagoon.

These changes align with the city's General Plan, approved in 2015, which calls for a mix of open space and visitor-serving commercial uses on the site. Since the property is along the coast, any future development must be approved by the California Coastal Commission, which prioritizes maximizing public access to the coast.

For Ratepayers

The transition to newer power infrastructure comes amid concerns about rising utility costs for SDG&E customers. According to a recent California Public Utilities Commission proposed decision, typical SDG&E residential customers using 400 kilowatt-hours of electricity per month would pay $170.87 per month, representing a $4.46 (2.7%) increase compared to current rates.

Some ratepayers have alternatives through Community Choice Energy programs like Clean Energy Alliance (CEA), which began serving Carlsbad, Del Mar, and Solana Beach in 2021. CEA offers power with higher renewable content (50% renewable/75% carbon-free) at competitive rates compared to SDG&E's standard service.

Conclusion

The April 2025 agreement between Carlsbad, SDG&E, and Cabrillo Power represents the culmination of more than a decade of complex negotiations, marking a significant transition in the city's relationship with coastal energy production. While providing less land than originally hoped, the deal secures valuable coastal property for public use, establishes environmental protections for the Agua Hedionda Lagoon, and maintains reliable power generation through more efficient, less polluting technology.

The agreement requires approval from various regulatory agencies, including the state's Public Utilities Commission and the Coastal Commission, with property transfers expected to take place over the next five to seven years. The first transfers will occur after receiving all necessary approvals, which could take up to five years, while the administrative offices site will transfer after construction of the new building in approximately seven years.

Sources:

  1. San Diego Union-Tribune. "Carlsbad to get seaside property in deal with 2 utility companies." April 20, 2025. https://sandiegouniontribune.com

  2. Wikipedia. "Encina Power Station." November 10, 2024. https://en.wikipedia.org/wiki/Encina_Power_Station

  3. NRG. "Carlsbad Energy Center." https://www.nrg.com/case-studies/carlsbad.html

  4. San Diego Union-Tribune. "What will become of the old Carlsbad power plant site?" April 26, 2019. https://www.sandiegouniontribune.com/communities/north-county/sd-no-plant-retires-20181220-story.html

  5. The Coast News Group. "After 64 years, Encina Power Plant goes dark." December 13, 2018. https://thecoastnews.com/after-64-years-encina-power-plant-goes-dark/

  6. San Diego Union-Tribune. "Subdivision sought for Encina power plant property." September 5, 2022. https://www.sandiegouniontribune.com/communities/north-county/carlsbad/story/2022-09-04/subdivision-sought-for-encina-power-plant-property

  7. KPBS Public Media. "After Nearly 50 Years, Carlsbad's Iconic Landmark Coming Down." April 5, 2021. https://www.kpbs.org/news/2021/apr/05/after-nearly-50-years-carlsbads-iconic-landmark-co/

  8. San Diego Union-Tribune. "Encina Power Station may stay online through 2018." March 23, 2017. https://www.sandiegouniontribune.com/business/sd-fi-carlsbad-energycenter-20170321-story.html

  9. City of Carlsbad. "Power Plant." https://www.carlsbadca.gov/city-hall/communication-engagement/hot-topics/power-plant

  10. inewsource. "Old Carlsbad power plant's environmental toll will persist." August 12, 2020. https://inewsource.org/2017/02/15/carlsbad-encina-environment/

  11. NRG. "Encina Power Station Notice of Demolition." https://www.nrg.com/assets/documents/case-studies/ACECP-07-AFC-06C-COC-NOISE-1-COM-11-Sept-16-19.pdf

  12. San Diego Union-Tribune. "Carlsbad edges closer to deal on SDG&E's coastal property." December 17, 2023. https://www.sandiegouniontribune.com/communities/north-county/carlsbad/story/2023-12-17/carlsbad-edges-closer-to-deal-on-sdg-es-coastal-property

  13. The Coast News. "Carlsbad weighs latest proposal to relocate SDG&E service center." December 19, 2023. https://thecoastnews.com/carlsbad-weighs-latest-proposal-to-relocate-sdge-service-center/

  14. bubbleinfo.com. "Cannon Park Deal." April 17, 2025. https://www.bubbleinfo.com/2025/04/17/cannon-park-deal/

  15. San Diego Union-Tribune. "Carlsbad edges closer to deal on SDG&E's coastal property." December 17, 2023. https://www.sandiegouniontribune.com/2023/12/17/carlsbad-edges-closer-to-deal-on-sdges-coastal-property-im-not-really-thrilled-about-this-outcome/

  16. San Diego Union-Tribune. "SDG&E eliminates another site for service center in Carlsbad." October 13, 2022. https://www.sandiegouniontribune.com/communities/north-county/story/2022-10-13/new-site-for-sdg-e-service-center-on-carlsbad-council-agenda

  17. Carlsbad Chamber of Commerce. "Clean energy, more choices, locally controlled." April 19, 2021. https://carlsbad.org/clean-energy-more-choices-locally-controlled/

  18. EnergySage. "2025 San Diego Gas & Electric (SDG&E) Net Metering." https://www.energysage.com/local-data/net-metering/sdge/

  19. San Diego Union-Tribune. "Brace for higher SDG&E bills after utilities commission releases proposed decision on rates." October 21, 2024. https://www.sandiegouniontribune.com/2024/10/18/brace-for-higher-sdge-bills-after-utilities-commission-releases-proposed-decision-on-rates/

  20. SDG&E Today. "Home." https://www.sdgetoday.com/

  21. City of Carlsbad. "Earth Month 2025." https://www.carlsbadca.gov/departments/environmental-sustainability/reduce-reuse-recycle/earth-month

  22. San Diego Regional Water Quality Control Board. "Carlsbad Desalination Plant." https://www.waterboards.ca.gov/sandiego/water_issues/programs/regulatory/carlsbad_desalination.html

  23. Agua Hedionda Lagoon Foundation. "Preserving the Lagoon." https://www.aguahedionda.org/

  24. City of Carlsbad. "Agua Hedionda Lagoon." https://www.carlsbadca.gov/residents/about-carlsbad/lagoons/agua-hedionda

  25. Coastal Environments. "Agua Hedionda Lagoon." February 26, 2017. http://www.coastalenvironments.com/portfolio-posts/agua-hedionda-lagoon/

  26. Wikipedia. "Agua Hedionda Lagoon." November 10, 2024. https://en.wikipedia.org/wiki/Agua_Hedionda_Lagoon

  27. Carlsbad Desalination Project. "Desalination Plant." October 30, 2024. https://www.carlsbaddesal.com/desalination-plant/

  28. Carlsbad Desal Plant. "Environmental." https://www.carlsbaddesal.com/environmental.html

  29. Wikipedia. "Claude 'Bud' Lewis Carlsbad Desalination Plant." November 10, 2024. https://en.wikipedia.org/wiki/Claude_%22Bud%22_Lewis_Carlsbad_Desalination_Plant

  30. Carlsbad Chamber of Commerce. "Proposed energy center provides reliable electricity." July 1, 2008. https://carlsbad.org/Proposed-energy-center-provides-reliable-electricity/

  31. Pacific Maritime Group, Inc. "Agua Hedionda Lagoon." January 3, 2025. https://www.pacificmaritimegroup.com/project/agua-hedionda-lagoon/

Carlsbad to get seaside property in deal with 2 utility companies

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