Change at power giant will be felt from Utah to L.A.
Delta • The Intermountain Power Project's days as a massive plant that produces electricity for an energy-hungry Southern California through coal-fired generation probably are coming to an end.
Exactly what it will become is only beginning to take shape, with more questions than answers surrounding its future. Certainty, where it can be found, says that the changes could be profound, impacting the state's coal industry, ratepayers and the environment, just to name few.
Elected officials from sprawling Los Angeles, which gets nearly 45 percent of its power from IPP, voted recently to end reliance on electricity generated from coal-fired power plants in favor of cleaner but more expensive natural gas by 2025, two years ahead of a state-mandated deadline.
Although L.A.'s announcement should help pave the way for construction of a natural gas-fired generating unit at IPP to meet that decree, it casts doubt on the long-term viability of the Utah power plant's two existing coal-fired units. Those units, which in 2012 gulped almost a third of the coal produced in Utah, also provide electricity to five other Southern California municipalities and on an as-needed basis to smaller cities in the Beehive State.
Since L.A. delivered its directive in late April, the focus at IPP, which has a staff of 485 workers, has been on ways to develop natural gas-fired power generation so it can be in place by 2025, IPP spokesman John Ward said. "The future of the coal units will be addressed later."
The IPP was built in the west-central part of the state in the early 1980s near Delta by 23 small Utah municipalities at a cost of $4.5 billion. It began generating electricity in June 1986. The plant originally was designed for four generating units but only two units were built. Still, the IPP rates as the fifth-largest coal-fired power plant in the West. It also is one of Utah's largest polluters, based on the most recent Toxics Release Inventory by the U.S. Environmental Protection Agency.
Plans for a third unit, once anticipated to go online in 2012, were canceled several years ago after the City of Los Angeles declined to commit to buying the power because of its desire to eventually wean itself from coal-fired generation.
Ward points out, however, that in order to keep IPP's existing coal units operating after Southern California municipalities make their switch, new customers for the power the units produce would have to be found.
And that may prove increasingly difficult.
Coal's share of electricity generation in the United States has fallen from 50 percent to 40 percent in the past decade, in part because of the rising influence of environmental groups and elected officials opposed to its use.
"Coal is old and dirty, and that plant (IPP) is no exception," said Evan Gillespie, who on behalf of the Sierra Club helped push Los Angeles to sever its ties to coal-fired power generation. "There are cleaner alternatives available wind and solar."
Gillespie doubts that IPP's coal-fired generation will find a ready market if it still is being produced after 2025.
He pointed out that IPP owns the transmission lines that carry the electricity it generates to customers in Southern California. But once 2025 rolls around, even if IPP fills some of the lines' capacity with electricity generated from burning coal, there will be no buyers in California who can take it. "I don't know where that electricity will be able to go," he said.
Shutting down IPP's two existing generating units would be a blow to Utah's coal mining industry, said Dave Tabet, manager of the energy and minerals programs at the Utah Geological Survey.
"But you also have to take into consideration that a lot of the areas that are being mined are slowing being depleted," he said. "Some of those mines in production have only 10 years of reserves. So they may be closing anyway. If that were to happen,it would be a lot less of a blow than if those mines had to shut down because IPP stopped taking their coal."
As envisioned, construction of the proposed natural gas-generating unit capable of producing anywhere from 600 megawatts to 1,200 megawatts would begin in 2020 and be completed by 2025, Ward said. The size of that unit, though, will depend on how many of IPP's owners choose to support its development.
The Intermountain Power Agency, which oversees the operations of the IPP on behalf of its 23 municipal owners ranging from Logan in the north to the City of Enterprise in the south, hopes to have that question answered by this fall.
Blaine Haacke, general manager of Murray City Power and vice chairman of the board of the Intermountain Power Agency, said there are several options on the table.
"Nothing is set. Nothing is concrete. Nothing is ready to announce," Haacke said.
Ward noted that the municipalities in California that take IPP's power also use its transmission system to deliver wind-generated electricity to customers from facilities such as the huge wind farm outside Milford.
"They may want to develop additional renewable [generating] capacity in Utah," Ward said.
Fred Pickel is the ratepayer advocate at the Los Angeles Department of Water and Power. And he agrees that the nation's second-biggest city may want to look for cheaper sources of electricity large-scale wind or solar facilities. That would allow it to use the IPP location as a hub for alternative-energy generation to help lessen the economic impact on consumers that will result from the switch away from coal to higher cost natural gas.
Pickel has estimated the cost to Los Angeles of eliminating its purchases of electricity generated from coal by 2025 instead of 2027 will be about $500 million, or $5.21 for every person living in the city.
Although the cost of producing electricity from renewable resources and natural gas have declined in the past five years, the cost of integrating renewable resources into the city's electric distribution system is uncertain, Pickel said.
"We have about seven years to explore alternatives before specific permitting and construction actions must be taken to meet the accelerated 2025 deadline," he said.
IPP fast facts
Year construction began • 1982
Year generation started • 1986
Primary fuel source • Coal
Employees • 485
Power generated • 1,800 megawatts, or enough power for 1.4 million homes
Primary customers • California municipalities
Source: IPP "Station Overview and History"
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