The deal, announced Monday, caps Bonanza's total use of coal at 20 million tons after 2020, unless the plant fully upgrades its emission controls at the cost of tens of millions of dollars.
"For a utility in Utah to agree to something like this is a very big deal, and it shows that the economics of coal are really starting to be felt, even by staunch coal boosters," said Jeremy Nichols, WildEarth's energy policy director. "This is an offer to limit coal moving forward. Once they reach the limit, [the coal-burning power station] will go away.
South Jordan-based Deseret Electric Power Cooperative, which operates Bonanza, said the agreement signed Friday ensures plant operations will continue, although perhaps at a reduced level.
"Coal-fired electricity remains the mainstay of our backbone energy supply. Nevertheless, there is undeniably a greater desire to include diversified alternative energy resources as part of the overall energy mix. This agreement addresses and allows for that natural progression to occur in a sensible manner over time," the utility's general counsel David Crabtree said in a prepared statement.
Operating within an American Indian reservation, the power station is Utah's fourth largest, supplying six rural power systems in Wyoming, Nevada and Utah. It is connected via a 35-mile electric rail line to the Deserado coal mine, operated by a Deseret subsidiary near Rangely, Colo.
Sierra Club and WildEarth Guardians oppose further use of coal to generate power, saying the fossil fuel — and its extraction, transportation, burning and waste stream — have outsized negative impacts. Coal, Utah's chief power source, releases more climate-changing emissions than any other fuel.
WildEarth also has contested the Bureau of Land Management's 2013 decision to extend Deserado's lease to mine federal land.
"Our miners, the plant employees, their families and the entire community rallied to public meetings, participated enthusiastically in the process and left no doubt that their very livelihoods were at stake. Today's agreement will ensure that their voices have been heard. Bonanza will continue to operate, and the Deserado Mine will stay open for business," said Deseret CEO Kimball Rasmussen.
WildEarth has agreed to stop fighting the coal lease for now.
"We sued over the mine expansion because EPA turned its back on the climate impacts of Bonanza. Now that we have certainty over the future of the plant, we feel our work is done. We are going to leave them alone for a while, but they have some tough choices to make, and hopefully the choices they make help transition Utah to a clean energy future," Nichols said. "We don't need to burn that coal, and they acknowledge that with this agreement."
The environmental groups' appeal sought to force Deseret to retrofit the plant with "best-available" emission control equipment, which they say was required under federal law after upgrades in 2000 enabled the plant to burn more coal and increase its electrical output.
The deal does obligate Deseret to install top-shelf technology known as selective catalytic reduction, but not until the end of 2030. If that happens the plant may exceed the coal-burning cap.
In the next few years, Bonanza still would have to upgrade its burners to cut emissions of nitrogen oxides, which contribute to ozone formation. The goal would be to reduce annual NOx emissions to 5,700 tons from its 600-foot stack, down from the 9,228 it released in 2013.
The utility said the cost would be passed along to ratepayers.