King Coal in the City of Angels

The celebrated ecological economist Herman Daly once said, ?There is something fundamentally wrong with treating the earth as if it were a business in liquidation.? In the year ahead, the Los Angeles Department of Water & Power?the nation?s largest municipal utility?is likely to help liquidate the earth?s store of coal like cheap goods at an after-Christmas sale. But it has the opportunity, however economically inexpedient in the short run, to conserve resources and help restore the dirty L.A. air to a more breathable public commons. In the months ahead, the Utah Department of Environmental Quality is expected to issue a permit to construct a third coal-burning power plant at the InterMountain Power Project. The Los Angeles department has spent $2 million to support planning and permit applications for the project. Soon, it will have to decide whether to help finance the proposed $1.75 billion project or spend the money developing renewable power generating facilities in its own smog-clouded backyard. The InterMountain Power Project?built in the early 1980s?has two 950 MW coal-fired units. LADWP consumes about 45 percent of their combined output. The units burn 5.3 million tons of coal a year. Their operator, the InterMountain Power Agency, estimates there is about 100 million tons of recoverable coal in the vicinity of the project?s current supply mines, or a 20-year supply. The project is one of three major coal-fired power plants on which the department relies. Its upcoming decision on whether to invest in expanding the InterMountain Power Project is likely to be intertwined with the fate of another coal plant, the Mohave Generation Station in Laughlin, Nevada. Mohave?owned jointly by Southern California Edison, the department, the Salt River Project, and Nevada Power Co.?has operated since 1971. It is required by the federal Environmental Protection Agency to reduce sulfur dioxide emissions by 85 percent by 2006 because the pollution diminishes visibility at the Grand Canyon. It is the single biggest source of sulfur dioxide in the West, emitting about 41,000 tons a year. The 273-mile slurry pipeline that supplies the plant with coal from the Black Mesa Mine is depleting the local aquifer of the Navajo and Hopi Indians, and the mine itself faces eventual depletion. Given the prospect of having to internalize some of the costs of pollution and resource depletion, the department and other Mohave plant owners instead may simply walk away and close the plant in 2005. This would cut LADWP?s capacity by 158 MW. Seeing the writing on the wall, the department sold half its original 20 percent interest in the Mohave plant to the Salt River Project in 2000. It has since used the $95 million in proceeds to add peaking turbine units and repower major generating stations in the Los Angeles Basin, which operate on natural gas. While the repowers are cleaner, they will run more frequently and could add to cumulative pollution. Last year, the inland area downwind of the LADWP plants experienced its first stage-one smog alert since 1998. Over the past two years, the number of days the federal ozone standard was exceeded shot up from an all-time low of 36 in 2001 to 68 during the 2003 summer smog season. Meanwhile, state law requires the department to develop a renewables portfolio standard plan. Just 3 percent of the power the department supplies comes from renewable sources, although it plans to increase that level with investments in wind, solar power, and other renewable facilities, including a 40 MW biomass plant approved earlier this week. Even with the additional facilities, its total renewable energy generation capacity, which now stands at 1 percent, would move only to 3 percent, or 220 MW out of its total 7,000 MW capacity. By comparison, Southern California Edison, the department?s investor-owned utility neighbor, generates 22 percent of its power from renewable sources, surpassing the state?s 20 percent renewables portfolio standard. The department?s laggard pace at developing renewable power has rankled some members of the Los Angeles City Council and the state legislature, which has buoyed the hopes of environmentalists that a breakthrough may be at hand in the next month or two. But the promise of cheap and abundant power for the nation?s second-biggest city and profits from wholesale power sales bode against any departmental rush to green power. Instead, the future is likely to involve burning sizable amounts of coal that release large amounts of carbon dioxide, acidic gases, and mercury, pollutants that are changing the climate, polluting the air, gradually contaminating the world?s fish supply, and damaging human health. Coal, which supplies 50 percent of the department?s power and constitutes 24 percent of its own generation capacity, is cheap as ever. Unlike natural gas?where low-cost domestic supplies face depletion?and oil?which is traded in an international market characterized by increasing demand and stagnant or decreasing supply?coal is abundant, with hundreds of years of domestic supply, according to the Department of Energy. At less than $24/ton, the real price of bituminous coal today is less than it was in 1949, and well below its $52/ton price peak in 1979. The price, of course, does not account for the subsidies and costs imposed by the attendant pollution and environmental degradation. But as long as the coal is mined and burned hundreds of miles from Southern California, Angelinos will not bear those costs, at least not directly. Despite the impassioned speeches by elected officials on the need for renewable energy, the numbers will not likely be lost on the Los Angeles City Council, which depends upon the department to transfer 7 percent of its power sales revenues to the city?s general coffers each year to fund 3.5 percent of the city?s total $5.1 billion budget. The council even has the department spend additional amounts of its own money to fund other city projects, most recently the city?s float in the annual Rose Parade on New Year?s Day, for which the department recently took flak in a local newspaper story on its proposed water rate increase. So in the new year, look for the speeches to continue along with the flow of loot, electricity, coal, pollution, and despoiled water. Meanwhile, enjoy the after-Christmas sales, and don?t miss the parade.

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King Coal in the City of Angels

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