November 22, 2006

CALIFORNIA: Cities favoring Gasification over Combustion

Under pressure from key state politicians and environmental groups, the Southern California city of Burbank has abruptly postponed plans to renew a lucrative electricity contract with Utah-based Intermountain Power Agency (IPA). By doing so, Burbank has joined the Los Angeles Department of Water and Power in rejecting out of state power contracts with vendors who contribute significantly to greenhouse gas emissions.

Six of the SoCal's largest cities depend on Intermountain for half to two-thirds of their electricity. In spite of that, many if not all may follow L.A. and Burbank's example. It is obvious that Californian utilities and politicians are starting to factor in the political and social costs of coal-fired energy.

The move to extend the contracts was prompted by new state legislation (SB 1368) that would prohibit cities from entering long-term contracts with energy vendors within or outside the state that do not meet the California Energy Commission (CEC) greenhouse gas emissions standards. Extending the contracts now would grandfather their terms.

It should be noted that the cities have been paying billions in long-term costs for construction of the out-of-state coal plants operated by IPA. Unless they extend the contracts they would lose the right to much cheaper power after those costs were paid off in 2027 and their contracts expired.

Annual CO2 emissions at the IPA plants total more than 16 million tons, according to an analysis by the conservation group Environmental Defense. Should IPA effect changes to their coal-fire process to meet the CEC standards, the cities could renew the contracts. However, this is not likely to happen without substantial upgrading to the IPA facilities.

According to a recent article in the Los Angeles Times titled "More cities reject coal-fired power":

Intermountain's General Manager Reed Searle said the Utah agency worked for three years on the renewals and now was looking at ways to modernize its plants to bring them into compliance with California's greenhouse-gas legislation, including burning biomass — which includes fast-growing trees and plants as well as waste products — instead of coal, or possible burial of carbon dioxide. He warned that such measures "will be costly" to consumers. Biomass conversion would cost about $300 million, he said, and carbon capture and sequestration technologies would cost billions.

"We can't just blanket 100 miles of the desert with solar panels. And besides, solar doesn't work at night," said David Wright, general manager of Riverside Public Utilities. He and Burbank officials said they were most interested in integrated gasification combined cycle power, which creates cleaner gas and steam power from coal and could allow CO2 to be separated and buried.

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