LADWP to eliminate coal-fired power from energy mix by 2025

Following a recent pledge made by Los Angeles Mayor Antonio Villaraigosa to wean the city off of coal-fired generation within 12 years, the Los Angeles Department of Water and Power (LADWP) has unveiled its ambitious plans to abandon the use of coal-fueled generation for its service area by 2025.

LADWP took historic steps this week towards eliminating coal from LA’s power supply when it announced that representatives of the California utility and Salt River Project have reached sufficient progress on the principle terms to sell its stake in the Navajo Generating Station (NGS). The two utilities will now move forward on negotiating a definitive agreement that would end LA’s use of coal-fired power from the plant by the end of 2015. 

If a final agreement can be reached and approved by each party’s governing bodies, this will end LA’s relationship with NGS more than four years earlier than mandated by California state law. 

Further, LADWP’s Board of Water and Power Commissioners have approved a contract that will enable the utility to completely transition out of coal power from the Intermountain Power Plant (IPP) 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 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.”

Thomas R. Sayles, President of the Board of Water and Power Commissioners, said, “Today we continued the Board’s efforts to meet environmental mandates efficiently and in a cost effective manner while maintaining a reliable power supply for our customers.”

LADWP currently owns a 21% interest in the 2,250 megawatt (MW) Navajo Generating Station, receiving 477 MW of coal-fired power from the plant. Wednesday, the Board directed staff to develop the final transaction agreement, which is expected to be approved by both parties later this summer, with consideration by the Los Angeles City Council thereafter.

Eliminating coal power from IPP was more complex than negotiating the terms of sale of NGS because LADWP does not own any part of IPP.  LADWP is one of six Southern California municipal utilities that purchase coal power from the 1,800 MW IPP facility under a long-term power purchase agreement that expires in 2027. 

IPP is owned by 23 municipal utilities in Utah and supplies power to 30 utilities in Utah and six utilities in Southern California, including LADWP.  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.

The Board’s action Wednesday approves LADWP’s portion of the amendment to the long-term power sales agreement to stop taking coal power from IPP earlier than 2027 and build a smaller natural gas-fired power plant that complies with California emission standards. 

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 – 1,200 MW, will allow LADWP and the other local municipal customers to develop more renewables and bring it to Southern California along existing transmission lines.

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 IPP.

“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 Aram Benyamin, LADWP Senior Assistant General Manager – Power.  “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 2/3 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 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.

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