More cities reject coal-fired power

More California cities join Los Angeles, rejecting contract renewal with a Utah power plant as pressure over pollution mounts.

By Janet Wilson
Los Angeles Times

In an abrupt about-face, Burbank and several other Southern California cities are joining with the Los Angeles Department of Water and Power in abandoning plans to renew long-term contracts for coal-fired electricity from a Utah power plant.

In forsaking their largest power source, the cities will be gambling on the availability of adequate alternative energy from cleaner sources by 2027, after their current contracts with the Utah facility expire.

"It's a huge change," Burbank Mayor Todd Campbell cheerfully admitted. Campbell and the City Council had voted unanimously last month to extend their contract with the Intermountain Power Agency in Delta, Utah, to 2044, seeking to beat the clock on a landmark greenhouse-gas state law that takes effect Jan. 1 prohibiting such contract renewals. [article below]

The change could put Southern California in the forefront nationally of the commercial use of alternative energy in coming years, including wind and solar power. It could also put the region ahead in the capture and burial of carbon dioxide, the greenhouse gas believed to be most responsible for global warming.

Six of the Southland's largest cities depend on Intermountain for half to two-thirds of their electricity. Researching and building infrastructure to replace it will be a costly, risky business, utility managers warned.

"It's a very challenging undertaking. All of these technologies are still in their infancy," said Phyllis Currie, general manager of Pasadena Water & Power. Pasadena is one of the cities joining in the decision. "We're still looking at the fact that right now, the Intermountain plant is 65% of our energy."

DWP President David Nahai, who already had said the city would not renew its contract with Intermountain, said, "We're very pleased that our fellow cities have decided not to renew their contracts either. Many of them had initially decided to do so, and then I think really showed a lot of courage and grace in reconsidering their decision."

Pasadena, Burbank, Glendale, Riverside and Anaheim representatives all told Intermountain's General Manager Reed Searle on Monday at the utility's quarterly meeting that they would not be renewing their contracts for cheap, coal-fired power.

"That is correct. I think everybody has decided basically not to renew at this time," Searle said Tuesday, noting with exasperation that the agency had drawn up the renewal contracts "at the request of the Californians" and that he had gone to the Utah Legislature to obtain special permission to do so.

The cities acted in the face of mounting pressure from local constituents, environmentalists and politicians, including Sen. Dianne Feinstein and state Sen. Don Perata (D-Oakland), author of the greenhouse-gas legislation, which includes a ban on power from sources that generate more such gases than in-state natural gas plants. Feinstein wrote a letter to an umbrella group for the cities last week saying she was "shocked and dismayed by Burbank's decision" after the council had voted to renew its contract with Intermountain.

Staff members of several utilities met in Sacramento on Monday with Perata's and other legislators' staff to explain what was at stake for the cities and ratepayers.

"We basically wanted to explain how important Intermountain Power is to California cities.... It's a serious issue when you tell us to walk away from it," said Currie, who like others noted that the cities had been paying billions in long-term costs for construction of the coal plants but would lose the right to much cheaper power after those costs were paid off in 2027 and their contracts expired.

Traditional coal-fired plants are the cheapest, most reliable source of power but emit tons of carbon dioxide skyward along with other harmful air pollutants. Annual CO2 emissions at the Intermountain plants total more than 16 million tons, according to an analysis by the conservation group Environmental Defense.

V. John White of the Center for Energy Efficiency and Renewable Technology, which is part of an environmental consortium trying to replace coal-fired power across the West, said Intermountain is "not used to the light of day. They're used to having a cocktail with a city official and renewing a deal" with no public discussion. He said the change of heart by Southern California officials occurred because "there was a public outcry, and it forced yes or no votes on global warming."

He said the next challenge would be to thoughtfully consider all available alternatives, from wind farms in the Tehachapi Mountains north of Los Angeles to desert solar power.

Intermountain's Searle said the Utah agency worked for three years on the renewals and now was looking at ways to modernize its plants to bring them into compliance with California's greenhouse-gas legislation, including burning biomass -- which includes fast-growing trees and plants as well as waste products -- instead of coal, or possible burial of carbon dioxide. He warned that such measures "will be costly" to consumers.

Biomass conversion would cost about $300 million, he said, and carbon capture and sequestration technologies would cost billions. But Searle said the Utah plants were uniquely situated over a large salt dome that could be ideal as an underground storage site for the gas. The agency also extended its renewal offer for any sort of power from the plants until 2023. The previous deadline was next May. California utility officials hope that state legislators will allow them to renew the contracts if greenhouse gases are reduced.

"We can't just blanket 100 miles of the desert with solar panels. And besides, solar doesn't work at night," said David Wright, general manager of Riverside Public Utilities. He and Burbank officials said they were most interested in integrated gasification combined cycle power, which creates cleaner gas and steam power from coal and could allow CO2 to be separated and buried.

The DWP's Nahai said the fact that the current contracts don't expire until 2027 leaves ample time.

"None of us are going to impose an economic upheaval on society, so of course the issue of cost is tremendously important," Nahai said. "But the question of benefits is also important... and 21 years is a long time."

But Wright said, "Everybody keeps saying we can replace that power in 20 years. But we don't just replace that power with a decision in 20 years. We have to decide in the next five years where we're going to get that power, and start constructing it."

janet.wilson@latimes.com

Copyright 2006 Los Angeles Times

Cities move to swiftly extend dirty-power contracts

By Janet Wilson
Los Angeles Times
November 4, 2006

Bucking a landmark California law to reduce greenhouse gases, several Southland cities are moving toward accepting a Utah utility's offer to extend for decades contracts for dirty, coal-fired power before the new law — which would ban such renewals — takes effect Jan. 1.

The law, passed by the Legislature last summer, seeks to combat global warming by prohibiting utilities from contracting for power from sources that don't meet stricter greenhouse gas standards. The law bans power from sources that generate more greenhouse gases than in-state natural gas plants.

Officials noted that the Utah utility's coal-fired plants are the largest sources of electricity for six Southern California cities, including Los Angeles. Many said that if they didn't renew their contracts, the power would just be sold elsewhere, not eliminated, and would cost their customers billions.

"We in Burbank don't believe that law will reduce greenhouse gas emissions," said Burbank Water and Power Assistant Manager Fred Fletcher, who added that extending its contract with the Intermountain Power Agency in Delta, Utah, would save ratepayers $300 million to $600 million. The mayor and council voted unanimously last week to extend their contract to 2044.

Riverside Public Utilities' advisory board voted unanimously Friday to ask city officials to renew their pact, said General Manager David Wright, while power managers for Glendale and Pasadena said they would ask their cities to renew their contracts within three weeks. Anaheim officials are weighing what to do, a spokesman said.

The contracts are not set to expire until 2027, but utility officials said they needed to act now to extend them because the new law was looming and because they needed to lock in lower costs in future years.

The officials said that they had been paying off capital costs to construct the Utah power plants since the late 1980s and that if they didn't renew, they would lose the right to buy power for about 50% less once those costs were paid off in 2027.

"It would be akin to paying off the mortgage to your house only to have it revert to the previous owner," said Pasadena Water & Power General Manager Phyllis Currie.

But the Los Angeles Department of Water and Power, which buys 66% of the power produced by the Utah plants and uses it to supply nearly half of the city's power, will not seek to renew its contract, said board of directors President David Nahai.

"I think the Legislature has spoken clearly on this issue," said Nahai, who added that he did not fault other utilities for their decisions. He said he was not worried about replacing the city's largest, cheapest power source in 21 years.

"By the time 2027 rolls around we hope to be in a position to have many other options available," he said. "We're on the verge of a new paradigm as far as energy supply to this city is concerned. It's moving away from coal toward more renewable energy sources like wind, geothermal, solar and biomass."

Environmentalists lambasted the decisions by the smaller cities, while lawmakers expressed concern.

"It's a giant step backward," said V. John White, head of the Center for Energy Efficiency and Renewable Technology, a Sacramento-based nonprofit. "This is penny wise and planet foolish."

He and others said coal's apparent lower costs might evaporate if state or national regulations changed to impose taxes or costly fees on such power, and they noted that there could be liability issues down the road as well. He said there was ample time for the cities to come up with alternative sources.

Fossil-fuel-fired power plants are the largest producers of greenhouse gases in the U.S., contributing nearly 40%. Most of the nation's plants are powered by coal and emit a host of other air pollutants. A report this week found that California's greenhouse emissions grew 14% from 1990 to 2004.

Alicia Trost, press secretary for the law's author, Sen. Don Perata (D-Oakland), said: "Even though this bill doesn't take effect until January, that doesn't mean we're not trying to send a clear message today…. All the evidence seems to point to [these cities] trying to get around this impending law…. Our main concern is: These were major opponents of the bill, the governor signed the bill, they lost the battle and now they're trying to win the war."

She said top staff for Perata had contacted the Southern California Public Power Authority, which represents all six municipal utilities that have contracts with the Utah utility, and voiced their displeasure.

The authority's executive director, Bill Carnahan, said he couldn't speak for the individual cities but believed that they were trying to comply by taking action before the law went into effect.

"If a city is interested in doing the extension based on the merits, then it only makes sense for them to try to do it before the 1st of January," Carnahan said.

He added that even as utilities switched to increasing amounts of renewable energy, Burbank in particular had argued "very logically" that coal would offer a reliable, affordable backup.

"The problem with wind resources is you can't count on the wind blowing every day. You can't count on the sun shining every day, plus solar is three or four times more cost," he said. "If the wind is not blowing, and you've got a summer day and the customers are still there, then you have to crank up a conventional resource."

Perata's bill, SB1368, was passed as a companion piece to legislation that caps emissions for some industries and requires California to slash greenhouse gases by 25%. Implementation of AB32 will take years, but the Senate law is designed to make an impact sooner.

Southern California municipal power officials who are pursuing renewal contracts insisted that they were fully committed to reducing greenhouse gas emissions in other ways and said efforts to renew their contracts with Intermountain had been underway for years, long before SB1368 was passed.

All the utilities — including Los Angeles' — also want to maintain access to a huge, cross-Western transmission line owned by Intermountain that can be used to ship power from wind as well as coal. Renewal of the cities' power contracts will include the right to continue transmission use. Officials at L.A.'s DWP said they would try to negotiate a separate agreement for continued transmission line access.

janet.wilson@latimes.com