California may be the land of cap-and-trade, but the state still gets a sizable amount of electricity from coal-fired power plants.
While the Golden State’s global warming law is forcing power providers to phase out coal, three major out-of-state coal-fired power plants are providing up to 50 percent of the electricity for Southern California, according to an investigation by SNL.
California gets its coal power from three plants in three states — “the Intermountain Power Project in Utah, the San Juan plant in New Mexico and the Navajo plant in Arizona,” according to SNL. Together, these plants have received 10.1 million tons of coal during 2015.
Despite its green reputation, California is still one of the country’s biggest industrial consumers of coal. SNL reports that “California was the eighth-biggest industrial coal user, burning 1.4 million tons” during 2014. California uses less coal than other Western states, but still represents a major coal market.
The problem for the coal industry, however, is that California’s global warming law (AB 32) requires state carbon dioxide emissions to return to 1990s levels. To do that, the law sets strict limits on how much CO2 power plants can emit.
Coal plants don’t make the cut, and it will be illegal for utilities to get coal power from out-of-state plants once current agreements end in 2027. This development, coupled with federal power plant regulations, is forcing major Western coal plants to be shut down or be converted to burn natural gas.
Utah’s Intermountain Power Project (IPP) will convert to burn natural gas instead of coal by 2025, according to SNL, so its owners can keep selling electricity to California. IPP sells about 90 percent of its power to six California municipalities.
Some 45 percent of IPP’s capacity is owned by the Los Angeles Department of Water and Power. The municipal utility has vowed to eliminate coal power from its portfolio by 2025 — when IPP switches over to gas.
LADWP has also vowed to sell its stake of Arizona’s Navajo Generating Station by the end of 2015. The utility owns about 21 percent of the Navajo plant, and gets 477 megawatts of power from its coal-fired generators. The Los Angeles City Council approved the sale in earlier this year and it’s expected to close in summer 2016.
The Salt River Project, the Navajo plant’s operator, will be buying LADWP’s stake in the plant and will have to close one of the plant’s three coal generators by 2016.
New Mexico’s San Juan plant must shut down two coal-fired generators by the end of 2017 due to federal EPA regional haze regulations.
All told, California’s shift away from coal will end up hiking up electricity rates even further. Phasing out coal will force the state to use more green energy and natural gas.
Steve Homer, director of project management for the Southern California Public Power Authority, told SNL moving away from coal will be “expensive for ratepayers,” and warned “of course there are reliability concerns.”
A spokeswoman for LADWP told SNL that ramping up green energy will end up raising city electricity rates.
“Altogether about 75% of power revenue increase will go toward meeting power related mandates — but that includes a number of legislated requirements in addition to renewables and eliminating coal,” the spokeswoman said.
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