Utah’s 4th largest coal power plant asks to keep burning into the 2040s

Bonanza plant, which powers much of rural Utah, would add pollution controls but still generate greenhouse gases from coal

(The Salt Lake Tribune) Owners of the Bonanza Power Plant in eastern Utah are asking state regulators to let them update the plant so it can continue to burn coal into the 2040s.

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The nonprofit cooperative that supplies power to most of rural Utah has asked state regulators to let it update the Bonanza Power Plant near Vernal so it can continue to burn coal for at least another decade.

Deseret Power, the nonprofit cooperative that owns Bonanza, filed paperwork asking the Utah Public Service Commission to let it add selective catalytic reduction (SCR) technology to the 500-megawatt power plant so it can continue to operate past 2030. Bonanza provides power to rural electric cooperatives in Utah, Nevada, Arizona and Colorado.

(Christopher Cherrington | The Salt Lake Tribune)

The plant operates under a settlement agreement reached back in 2015. Two environmental groups – Wild Earth Guardians and the Sierra Club – challenged the plant’s air quality permit issued by the EPA. The resulting settlement allowed Deseret to burn only 20 million more tons of coal, and then either shut down or install SCR at a cost of tens of millions of dollars.

At the time, it was thought that Deseret might shut down the plant rather than invest in the expensive pollution-control equipment. But demand for electricity is climbing, as is the cost and time it takes to acquire and connect new energy sources.

Bonanza is vertically integrated. Deseret Power also owns the plant’s coal supply, the Deserado coal mine 35 miles away in western Colorado, and it owns an electrified rail line that carries the coal from the mine to the plant. Deseret Power has no connection to the LDS Church.

12 million more tons

The SCR project “will enable Deseret to take full advantage and utilize all remaining economically recoverable coal reserves under the current federal lease(s) at the Deserado mine, thus making available to Deseret and its members an additional 12 million tons of coal at economical pricing (above the 20-million-ton limit),” said Deseret’s PSC filing. “Combined with the remaining balance of permitted coal, the existing leased reserves remaining in the Deserado reserves will sustain continued operation of Bonanza at approximately its current levels through at least 2041 or 2042.”

Deseret officials declined to answer questions from The Tribune.

Deseret is telling the PSC the application will be “unopposed and uncontested and should be handled by “informal adjudication.”

The Public Service Commission is taking public comment on the filing until May 20.

Sierra Club spokesperson Amy Dominguez questioned whether the project is unopposed.

“A more prudent course of action would be for the company to explore replacing Bonanza with new clean energy, made more affordable thanks to federal incentives under the Inflation Reduction Act and Utah’s incredible solar resources.”

“It’s not possible for Deseret to know whether the project is unopposed and uncontested without allowing the public to respond,” she added. “As for Sierra Club, under the terms of a prior settlement agreement, we are unable to formally contest the request at the commission. Although Sierra Club cannot file written comments in the commission, we will continue to carefully review the application and provide public analysis.”

Wild Earth Guardians declined to comment on Deseret’s filing.

Satisfies ‘Good Neighbor’

Selective catalytic reduction significantly reduces NOx emissions, which are a precursor in the formation of ozone. By adding SCR, Bonanza’s emissions would be low enough to comply with the federal Ozone Transport Rule (OTR). That so-called “good neighbor” rule requires power plants to keep NOx emissions low enough that they won’t increase ozone levels in other states.

But the Ozone Transport Rule, or OTR, currently isn’t being enforced while the Supreme Court weighs whether the rule is legitimate regulation or an overreach by the federal Environmental Protection Agency without the proper congressional approval.

“By adding SCR, Bonanza Unit 1 can operate at levels that would permit operations even under the OTR with reasonably manageable costs associated with compliance strategy for achieving the required emissions limits,” the filing states. " … The SCR provides the best currently available probability to enable Bonanza Unit 1 to satisfy these and other possible initiatives as part of a reasonable, responsible, near and intermediate term compliance strategy.”

Deseret also noted that Bonanza is in a federally designated “non-attainment area” for ozone. The Uinta Basin, where most of Utah’s oil and gas production happens, has had elevated ozone levels for years despite its low population.

“Reducing NOx emissions in the non-attainment area where Bonanza is situated may carry significant co-benefits to the community and for possible future permit applications,” the filing states, noting that it could help Deseret get EPA approval for a separate 51-megawatt natural gas-powered plant at the site, which would be used for “peaking” times when demand exceeds what Bonanza and other sources produce. It added a similar natural gas peaking capacity in 2022.

Deseret also draws power from hydroelectric projects on the Colorado River, from the Hunter Power Plant in Emery County and from the Intermountain Power Project, which next year will switch from coal to natural gas and later hydrogen. It also added some solar capacity near Bonanza.

No climate benefit

But SCR does nothing to reduce the amount of carbon dioxide released when the coal is burned, and carbon dioxide is the largest contributor to climate change. Coal is considered the least climate-friendly fossil fuel because it releases more carbon dioxide when it is burned than petroleum or natural gas. In 2022, coal was responsible for 20% of U.S. electricity generation but 55% of the carbon dioxide coming from power plants.

In the filing, Deseret acknowledged there is risk in continuing with coal if future regulators were to limit coal burning or add additional costs, like a carbon fee or tax, but it considers that risk low.

“The future legal and regulatory framework for continued operation of Bonanza Unit 1, most notably, potential future initiatives to further curtail or place significant conditions on coal-fired electricity generation, is an unavoidable element to be considered in the operational and financial success of the project,” the filing states. “Based on its economic analysis, Deseret is confident that the SCR will add sufficient additional generation output, using existing proven leased coal reserves at the Deserado Mine, that its confidence in the likelihood of a positive payback for this investment is deemed to be extremely high.”

Deseret’s filing comes less than a month after Utah’s largest electrical utility, Rocky Mountain Power, reversed its decision to close its Emery County coal plants by 2032 and replace them with renewable sources, battery storage and small nuclear power plants. Instead, Rocky Mountain said April 1 that it will continue to burn coal at the plants until their original retirement dates in 2036 and 2042.

Meanwhile, Utah’s largest coal-fired power plant, the Intermountain Power Project near Delta, is scheduled to close next year when a new natural gas/hydrogen plant begins operation. But the Utah Legislature passed a bill earlier this year to force IPP’s owners to revise their air quality permit to keep half the coal plant open on the hope that someone, perhaps even the state of Utah, will keep it running.

Jeremy Nichols, senior advocate for the Center for Biological Diversity, said his organization will submit comments. “Sadly, what this really seems to reflect is the coal industry’s efforts in Utah to simply force ratepayers and taxpayers to pay for costly coal and keep raking in profits.”

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