You — Utah taxpayers — could end up buying a coal plant as legislators advance IPP plan

Three mayors speak against bill that would offer coal plant for sale, and the state’s air quality director warns it would upend Utah’s plan for battling pollution.

Despite pleas from three mayors and a pollution warning from the state’s air quality director, legislators have advanced a quixotic bill that could end up with Utah taxpayers owning a 40-year-old coal plant.

“If these units are decommissioned and taken off the grid, they’ll never be permitted again,” said Sen. Derrin Owens, R-Fountain Green, sponsor of SB161, which spells out a process for setting a price and selling the coal-fired power plant at Millard County’s Intermountain Power Project to someone who would continue to run it after the Intermountain Power Agency brings its new natural gas/hydrogen power plant on line next year and close the coal facility. Owens’ district includes coal mines.

But the Senate Natural Resources, Agriculture and Environment Committee on Wednesday heard from several people inside and outside government who said the plan was too late, expensive and could even force less coal burning elsewhere in Utah to keep within air quality commitments.

No one but legislators spoke in favor of the plan.

‘It feels off’

The Intermountain Power Authority was formed more than 40 years ago by 23 Utah cities to build the plant near Delta to supply power to the Utah cities and to Southern California utilities that take the vast majority of the power and pay virtually all of the costs of operating it.

“If feels off that Utah cities banded together to create this asset,” Bountiful Mayor Kendalyn Harris, “and now it’s essentially the state Legislature wanting to take it away.”

Harris was one of three Utah mayors — all women — who asked lawmakers to engage in a more collaborative process, but the all-male committee members in attendance voted 4-2 on Wednesday advance the bill to the Senate floor, even as they acknowledged the measure still needs work.

Under SB161, IPA would be required to notify the state a year in advance of its intent to close the coal plant (meaning this year). When that happens, the Utah Public Service Commission would be required to hold a public hearing within 60 days “for the purpose of establishing the fair market value of the electrical generation facility.”

After the hearing, the PSC would have 30 more days to come up with a figure for a fair market value. After that, IPA would have 90 days to offer the plant to the public.

If that offer returns bids at or above the set price, IPA would be required to sell to the highest bidder. But if no one makes an offer matching the set value, IPA has to offer it to the state of Utah at the fair market price

In other words, a state entity (the Public Service Commission) would set the price at which the state could buy an asset, a potential conflict that could spur a legal challenge.

One PSC member, John Harvey, told legislators that setting a market value would be a new process for the agency, which is charged with regulating public utilities in the state. He expects it would cost $250,000 to hire outside expertise to pull it off. A fiscal note on the bill has not been released, but it also is expected that the Utah Department of Environmental Quality would have additional costs.

Who would buy it?

Sen. Evan VIckers, R-Cedar City, the only Republican who voted against advancing the measure, was unsure the compressed timetable would yield a buyer when so much is unknown. “I don’t know how a bidder could bid on it without an air permit.”

Bill language also shows a strong level of distrust of IPA. “If a project entity [IPA] fails to disclose information as required ... the project entity retains any liability related to the electrical generation facility regardless of the sale.”

“We’ve talked so much about the Utah way,” Logan Mayor Holly Daines said, “but this bill really is a bit troubling that it contemplates a forced sale of our assets and, you know, potentially doesn’t provide due process, and the timeline is very short.”

Kaysville Mayor Tamara Tran echoed those concerns.

The challenges of keeping the plant going are multiple. In addition to managing the environmental issues with the Environmental Protection Agency and the Utah Division of Air Quality, there is not an obvious buyer for a 40-year-old coal plant that would require hundreds of millions of dollars, perhaps more than billion, to keep it operating.

That includes adding transmission lines if the buyer wants to deliver the power elsewhere. There also has been talk of locating data centers there, but the biggest players in data centers are companies moving to clean power. Selling them on IPP’s coal power could require carbon capture, something that has never been done on a U.S. coal plant and would nearly double the amount of Utah water required to run the plan.

“A lot of those companies, data centers, etc, have sustainability goals that might prevent them from being interested in this sort of thing,” said Sen. Nate Blouin, D-Salt Lake City. “We don’t have proven carbon-capture technology at this scale, and, if we did, it’s going to be extremely expensive.”

Blouin joined Vickers as the only no votes. Voting to advance were Owens, Sen. Ron Winterton, R-Roosevelt, Sen. Scott Sandall, R-Tremonton, and Sen. Keith Grover, R-Provo.

Upending air quality plan

Last year, lawmakers heard from a Dallas consultant who told them it is possible to update the plant’s air quality permit to keep coal burning, but Bryce Bird, director of the Utah Division of Air Quality, told them Wednesday that changing the permit would affect the state’s entire plan for air quality, which is required by the federal government because Utah’s air pollution levels exceed health standards.

Bird said the state’s air quality plan, which was submitted in 2022 and still awaits approval, “benefited greatly from being able to close the coal units at IPA.”

He also warned that keeping the coal plant running would disrupt Utah’s regional haze plan, which requires the state to protect visibility in national parks and wilderness areas. “This bill is silent on that component, but it’s something that would need to be redone.”

Keeping the coal plant going would also undo IPP’s deal with the EPA on coal ash. Impounding more coal ash would require millions of dollars in investment and a signoff from the EPA.

“There is simply no reality where IPP — state’s largest single contributor to nitrogen oxide, sulfur dioxide and carbon pollution — can continue to operate under modern clean air regulations without a major overhaul that renders the plant completely uneconomical,” said Maria Archibald, senior coordinator of lands and water programs for the Sierra Club’s Utah chapter. “Regulatory hurdles proposed by this bill will not change that fact.”

Owens’ bill is one of a few aimed at getting more legislative control over IPP. There are at least two other measures aimed at IPA management, but neither has had a committee hearing.

SB114, from Sandall, would keep IPA from issuing more bonds without legislative approval. The bill says no bond payments could extend beyond 2045, which is when the current bonds to build the new gas plant, called IPP Renewed, will be paid off. There is potential to expand IPP Renewed, including building new caverns to store hydrogen, but legislators would have to approve further bonding if this bill passes.

SB120, also from Sandall, takes legislative control a large step further, making legislators the majority on IPA’s board. Putting themselves in charge could also bring a legal challenge.

Editor’s note • This story is available to Salt Lake Tribune subscribers only. Thank you for supporting local journalism.