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In response to mounting mandates from Sacramento to address global warming, the Los Angeles Department of Water & Power and other Southern California municipal utilities will study the cost and feasibility of retrofitting a major coal power plant to capture and sequester carbon dioxide emissions. The study will examine a wide range of options to reduce CO2 emissions from the 1,900 MW Intermountain Power Project in Utah, which is a major supplier to the munis. Options to be studied include developing clean coal technologies expected to emerge in the next five to 10 years and the possibility of converting the plant to run on natural gas or biomass. The potential for offsetting emissions under a cap-and-trade market will also be assessed. LADWP said in a request for study proposals that its examination of carbon reduction at the plant is prompted by new greenhouse gas emissions standards for coal power plants under SB 1368. The law specifies that utilities cannot extend or make new long-term investments in coal power plants for baseload power unless their CO2 emissions do not exceed those of a natural gas-fired combined cycle generating plant. The Southern California munis face no immediate need to renew their power supply contracts with facility. Their current contracts run through 2027. Under pressure from environmental groups, they dropped a bid late last year to renew the contracts before SB 1368 took effect (Circuit, Nov. 27, 2006). However, they do face the prospect of having to make relatively near-term emissions reductions under California’s global warming law, AB 32. “Our Southern California utilities are looking at the clean coal option,” said Bret Barrow, California Municipal Utilities Association legislative affairs director. “There is a need for base-load generation.” Barrow observed that Southern California munis have heavily invested in the power plant. “You just can’t walk away from that,” he said, particularly when other options for major baseload generation, such as hydropower and nuclear resources, are limited in the region. So is the ability to build baseload gas-fired plants due to air pollution requirements. Meanwhile, he said, ratepayers should expect that reducing greenhouse gases “will add to the cost of providing power.” Last week, new California Air Resources Board chair Mary Nichols echoed Barrow’s concern that controlling greenhouse gases could cause electricity prices to spike, especially for customers of coal-heavy utilities like the Los Angeles Department of Water & Power. Nichols served on the board of the muni--which relies on coal for 47 percent of its power--before moving to the Air Board last month.

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