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$600-million price tag projected for Villaraigosa's coal plan

April 16, 2013|By Kate Linthicum
  • Undated file photo of the huge coal-fired Intermountain Power Project in Delta, Utah, that is the single biggest supplier of electric power for Los Angeles. The plant opened in 1986.
Undated file photo of the huge coal-fired Intermountain Power Project… (L.A. Dept. of Water & Power )

Weeks after Los Angeles Mayor Antonio Villaraigosa celebrated his plan to speed up the end of the city's reliance on coal-powered energy, a city watchdog has attached a giant price tag to the initiative.

Fred Pickel, the ratepayer advocate at the Department of Water and Power, said Monday that eliminating coal from the utility's power mix ahead of a state-mandated deadline is projected to cost more than $600 million.

He added that it was unclear how much the charge would increase the electricity bills of ratepayers.

Pickel, who will present a report on the plan to the City Council's Energy and Environment Committee on Wednesday, said he will urge city and utility officials to look for ways to lower the cost.

"The question is, can we do this cheaper," he said.

With much fanfare last month, Villaraigosa announced plans to make the city coal-free by 2025 by dumping the utility's interest in a coal-burning plant in Arizona and converting another one in Utah to natural gas.

Former Vice President Al Gore and hundreds of environmentalists heralded the plan at a news conference outside of the Department of Water and Power because it would end the city's reliance on coal two years earlier than a state-imposed deadline of 2027.

Pickel said selling the city's interest in the Navajo Generating Plant in Page, Ariz., three years ahead of the end of the utility's contract with the plan is projected to cost $150 million to $200 million. The cost of taking gas-fired energy from the Intermountain Power Plant in Delta, Utah, is projected at $500 million, Pickel said.

Coal-fired energy produced at the plants now provide nearly 40% of the city's energy. Under the plan presented by Villaraigosa and the DWP, the city would supplant most of that with power from natural gas plants.

But while electricity produced by burning natural gas is cleaner, it is also more expensive. According to Pickel, the city may need to look for cheaper, alternative sources of electricity to soften the blow of rate increases.

He said one option could be to purchase more solar energy.

Officials at the Department of Water and Power did not immediately return requests for comment. Neither did a spokesman for Villaraigosa.

But Evan Gillespie, who has been pushing the city to get off coal on behalf of the Sierra Club, defended the plan. He noted that new regulations mean both coal-fired plants the city now buys power from may have to undergo costly renovations in the coming years, which could hike rates anyway.

"Nearly every single coal plant in the country is facing increased costs," he said. "You need to look at what it's going to cost to remain in the plant."

He noted that under the plan announced by the DWP, the utility has until 2020 to decide whether it will take natural gas from the Utah plant.

He said the plan was strategic and gives officials the chance to look at other options to replace coal.

"In five or 10 years, it may be cheaper to use clean energy," he said.

On Wednesday the Energy and Environment committee will consider a plan to amend the utility's contract with the Utah plant to allow it to transform its power supply to cleaner natural gas. The contract change requires the approval of the full City Council.


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Twitter: @katelinthicum

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