California Says No To Coal Power
The California Energy Commission has decided that due to the state’s desire to curb green house gases that the state’s investor owned utilities (IOUs) will not import any electricity generated by coal from out of state sources. This decision was adopted with California’s Integrated Energy Policy for 2005. While the actual policy has yet to be formalized, the policy does provide a premliminary standard for greenhouse gases,
Global Climate Change
California must continue to be highly aware of the environmental impacts of its energy policies. As the worldÃ¢€™s 17th largest emitter of greenhouse gases, California must incorporate its efforts to reduce greenhouse gases into its energy policies. In June 2005, Governor Schwarzenegger established greenhouse gas emission targets intended to reduce greenhouse gas emissions by 2010 to 2000 emission levels, by 2020 to 1990 levels, and by 2050 to 80 percent below 1990 levels. The GovernorÃ¢€™s Climate Action Team, led by the California Environmental Protection Agency, is charged with developing the program that will achieve the GovernorÃ¢€™s targets. The first report of the Climate Action Team is due to the Governor and Legislature in January 2006.
The state is exploring a number of strategies to reduce greenhouse gas emissions. The CPUC now requires that investor-owned utilities use a carbon dioxide adder of an initial $8 per ton in their long-term procurement plans, encouraging them to invest in lower emitting resources. In addition, the CPUC unanimously adopted a resolution directing its staff to develop an investor-owned utility greenhouse gas performance standard Ã¢€œthat is no higher than the greenhouse gas emission levels of a combined-cycle natural gas turbineÃ¢€ for all procurement contracts longer than three years. In the case of coal-fired generation, the capacity to capture and store carbon dioxide safely and inexpensively is essential for meeting these standards. The Energy Action Plan commits that the agencies will Ã¢€œ Ensure that energy supplies serving California, from any source, are consistent with the GovernorÃ¢€™s climate change goals.Ã¢€ The Energy Commission endorses the CPUCÃ¢€™s setting a greenhouse gas performance standard for investorowned utilities and agrees that an offset policy must await a formal greenhouse gas regulatory system and must include a reliable and enforceable system of tracking emission reductions. The Energy Commission looks forward to working with the CPUC to implement a greenhouse gas performance standard as part of the 2006 procurement proceeding.
While more specific recommendations must necessarily await the January 2006 report from Governor SchwarzeneggerÃ¢€™s Climate Action Team, the Energy Commission recommends the following:
- A greenhouse gas performance standard for utility procurement should be set no higher than emission levels from new combined-cycle natural gas turbines.
- Additional consideration is needed before determining what if any role greenhouse gas emission offsets could play in complying with such a standard.
While this does not outright ban electricity generated from coal plants, the requirements that coal fired plants emissions be as clean or cleaner that combined cycle natural gas fired plants pretty much ensures that there will be few coal plants that meet the condition. This could be bad news for planned coal plants in Wyoming, Nevada and Idaho. I’m not sure, but I bet this is also bad news for the $3 billion transmission line from Wyoming to Arizona. If the proposed plants were going to be using that transmission line to send coal generated electricity to California, then these new rules might make such a transmission line unneccessary.
Further, given the higher prices for natural gas due to increased demand and the problems along the Gulf of Mexico, it is likely that electricity prices in CA (already some of the highest in the nation) will go even higher.