Federal Council Seeks New Coal Regulations

By Published On: January 8, 2005

The National Coal Council, in a report to U.S. Secretary of Energy Sam Bodman and Congress slated for later this month, contends that coal is the key to providing California, and the nation, with reliable energy. The council?a formal federal advisory committee to the Department of Energy composed largely of utility and coal industry executives?seeks to bolster the use of coal to produce electricity through a number of regulatory changes at the state and federal levels. At press time, California utility officials had yet to see the draft final report?<i>Opportunities to Expedite the Construction of New Coal-Based Power Plants</i>. It calls for the federal government to establish portfolio targets for the California Independent System Operator and other regional transmission organizations for electricity made by integrated gasification plants. The council recommends that state regulators ensure full cost recovery?including for stranded costs that result when conventional coal power plants are closed. For instance, if Southern California Edison?s Mohave plant were shut down and replaced by advanced technology, utility losses would be covered. The council contends that such changes in regulation would give coal plants?particularly integrated gasification plants?an edge over natural gas peaking units. Fluctuation in demand has flattened as a result of conservation and other changes in the economy, making it more economical to meet growing demand by adding baseload coal power plants that serve broad multistate regions than by natural gas peaking units, according to the draft report.

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