The Los Angeles City Council approved a plan Tuesday to begin moving away from coal-fired energy, despite warnings from a Department of Water and Power watchdog that the shift could cost more than $650 million.
Like many utilities, the city-owned DWP gets more of its power from coal than from any other source. But last month, after a lengthy campaign by environmentalists, Mayor Antonio Villaraigosa and utility officials announced a plan to end the city's reliance on coal two years ahead of a state-mandated deadline.
The council took the first step in that direction Tuesday with a 12-0 vote that will clear the way for a coal-fired plant in Utah to be converted to run on natural gas, a cleaner but more expensive alternative to coal.
The conversion of the Intermountain Power Project, which is the city's biggest power provider, is expected to be completed by 2025. Under the proposal, utility officials will buy new gas energy from the Utah plant as well as beef up its reliance on renewable energy sources.
Councilman Jose Huizar said it made sense for the city to transition away from coal sooner rather than later because state law prohibits California utilities from signing new contracts with coal-fired plants. That means even without the proposed changes, the DWP would have to find a way to replace coal-fired power by 2027, when its contract with the Utah plant expires, he said.
"There is no cost-free option," Huizar said. "If we do not put a plan in place for getting out of coal, we will be forced out in 2027."
Huizar was responding to questions raised last week by a DWP watchdog about the costs of the transition.
DWP ratepayer advocate Fred Pickel said the cost of taking gas-fired energy from Intermountain Power Project is projected at $500 million, in part because of high natural gas costs. He said utility officials need to look at a broader range of coal replacement options, and put a bigger emphasis on large-scale wind and solar projects.
Pickel also said a separate Villaraigosa proposal to sell the city's interest in a coal-powered generating station in Arizona three years ahead of the current contract's termination is projected to cost $150 million to $200 million.
DWP General Manager Ron Nichols assured the council that the transition process is in the early stages, and many of the details are yet to come. He noted the changing costs of gas and renewable energies and said the city has until 2020 to determine the combination of natural gas and renewable energy that will be generated at the Utah plant. In the meantime, he said, the utility will consider all alternatives.
"Our expectation is we will be coming back to you and telling you what those costs are looking like … well before we have to pull the trigger," he said.