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LA takes steps to eliminate coal from its portfolio


From the March 21, 2013 issue of Public Power Daily

Originally published March 21, 2013

By Robert Varela
Editorial Director

The Los Angeles Department of Water and Power said it took "historic steps" toward eliminating coal from LA’s power supply as the LADWP board on March 19 approved moves to sell its stake in Navajo Generating Station and to convert the coal-fired Intermountain Power Project to a gas-fired plant.

The board directed staff to develop a final transaction agreement to sell LA’s 477-MW stake in the Navajo Generating Station to Salt River Project, which would end LA’s use of coal-fired power from the 2,250-MW plant by the end of 2015, LADWP said. A final agreement is expected to be approved by both parties later this summer, with consideration by the Los Angeles City Council thereafter, LADWP said. If a final agreement can be reached and approved by each party’s governing bodies, this will end LA’s role in the coal-fired plant more than four years earlier than mandated by California state law, the municipal utility said. 

LADWP’s board on March 19 also approved a contract that will enable the utility to completely transition out of coal power from the Intermountain Power Plant in Delta, Utah, by 2025 at the latest, with efforts to begin that transition no later than 2020. 

"The era of coal is over. Today we affirm our commitment to make Los Angeles a cleaner, greener, more sustainable city," said Mayor Antonio Villaraigosa. "By divesting from coal and investing in renewable energy and energy efficiency, we reduce our carbon footprint and set a precedent for the national power market." The Board of Water and Power Commissioners continued its efforts to meet environmental mandates efficiently and in a cost effective manner while maintaining a reliable power supply for our customers," said board President Thomas R. Sayles.

"We are very pleased that we have made progress with Salt River Project to enable moving forward with the negotiation of the final agreements that would enable LADWP to fully divest of coal power from Navajo by the end of 2015," said LADWP General Manager Ronald O. Nichols. "This will close a chapter on our reliance on coal-fired power in Los Angeles. Our efforts to create a clear path to ending our use of coal-fired power from the Intermountain Power Project is also a major achievement for a complex arrangement involving 30 Utah public power utilities and six California municipal utilities who receive power from that project. This allows us to focus on the new low-carbon future of Los Angeles."

Eliminating coal power from Intermountain Power Plant was more complex than negotiating the terms of sale of Navajo because LADWP does not own any part of IPP, the utility said. IPP is owned by 23 municipal utilities in Utah and supplies power to 30 utilities in Utah, as well as six municipal utilities in Southern California that purchase power from the 1,800-MW plant under a long-term power purchase agreement that expires in 2027. 

The LADWP board approved LADWP’s portion of an amendment to the long-term power sales agreement to stop taking coal power from IPP earlier than 2027 and build a smaller natural gas plant that complies with California emission standards. Under California law (SB 1368), electric utilities will not be allowed to import power into the state that exceeds a fossil fuel emissions cap after their current contracts expire. The emissions cap is set at the level of an efficient, combined-cycle natural gas power plant.

LADWP and other Southern California municipal utilities will continue to receive renewable energy from Southern Utah from the Milford Wind project; with power delivered over the same transmission line that presently also delivers power from the Intermountain Power Project, LA said. The contract provides for beginning LADWP’s transition out of coal power from IPP with the commencement of engineering, design and construction of the smaller natural gas-fired generating plant by 2020, and completely eliminating coal power from IPP no later than 2025. The smaller plant, estimated at between 600 to 1,200 megawatts, will allow LADWP and the other local municipal customers to develop more renewables and bring it to Southern California along existing transmission lines.

"Working with IPP and its other customers, we have developed a win-win-win solution that is good for Southern California and good for Utah," said LADWP Senior Assistant General Manager–Power Aram Benyamin. "Siting and building a new power plant and the transmission lines to deliver replacement power to Los Angeles would have cost at least twice that of rebuilding at IPP. By using an existing power plant site and existing DC Southern Transmission System for delivery of power from the future project and transforming it we will save money, time, reduce emissions by over two-thirds that of the existing plant, be able to build more renewables and bring that power home to Los Angeles. That’s a homerun."

The amendment to the IPP contract is subject to approval by the Los Angeles City Council, will be considered by the other municipal purchasers and is currently being ratified by the 23 Utah owners, LADWP said.

"Eliminating coal is one leg of our transformation, but we can’t stand on that leg alone–we have to replace that power supply," said Nichols. "That is why for several years now and for several more to come, LADWP has been taking steps to replace coal power with a combination of greatly increased commitment to energy efficiency, expanded renewable energy, and balancing that with a necessary amount of low-carbon natural gas power. All of these elements will come together to ensure a reliable, cost effective power supply transformation." 


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Senior Vice President, Publishing 
Jeanne Wickline LaBella
202/467-2948
JLaBella@publicpower.org

Editorial Director
Robert Varela
202/467-2947
RVarela@publicpower.org

Editor, Public Power Daily
Jeannine Anderson
202/467-2977
JAnderson@publicpower.org

Communications Assistant
Fallon W. Forbush
202/467-2958
FForbush@publicpower.org

Manager, Integrated Media 
David L. Blaylock
202/467-2946
DBlaylock@publicpower.org

Integrated Media Editor 
Laura D’Alessandro 
202/467-2955 
LDAlessandro@publicpower.org