L.A. to Sell Share of Coal-Burning Plant

Los Angeles will sell its interest in a massive coal-burning power plant in the Nevada desert, the City Council decided Tuesday, despite some concern that the sale would eliminate a reliable backup power source.

The transaction is a key part of the Department of Water and Power’s 10-year plan to restructure the city’s power supply to dramatically reduce the dependence on older, costlier and more polluting plants.

The department is expected to make $190 million in profit from the sale of its share in the Mohave Generating Station and to avoid the $75-million cost of upgrading the facility to meet new environmental standards next year.

The DWP hopes to use the profit to cut its debt and help expand and upgrade three natural gas-powered plants in the Los Angeles Basin.

But for most council members, the sale is a matter of principle, not money. Several said it will cut the city’s ties to a plant that they maintain endangers the health of Native Americans in Nevada.

Still, in a report sent to the council and Mayor Richard Riordan, the city’s top two administrative officers warned that the sale could threaten the reliability of the municipal power system and cost the city revenue from the sale of the plant’s surplus power.

The report by Chief Legislative Analyst Ron Deaton and City Administrative Officer Bill Fujioka said the Mohave plant, which provides a source of backup power, is needed while the city tries to upgrade and retrofit the three natural gas-powered plants.

The two officials also argued that the Mohave plant supplies power to up to 300,000 homes around the clock at about half the cost of electricity from the natural gas-powered plants. Those plants will have to increase operations to make up the difference. But supporters of the sale said the facilities will be upgraded to reduce harmful emissions.

The city owns a 20% share in the Mohave plant and must sell it by September to get in on a deal struck by Southern California Edison Co. and Nevada Power Co., which are unloading their shares of the plant to AES Inc.

The facility, near the Colorado River in Laughlin, is the biggest uncontrolled source of sulfur dioxide polluting the Southwest and a prime contributor to the haze that hangs over the Grand Canyon, according to federal officials,

DWP General Manager S. David Freeman has pushed for the sale, arguing that the city must cut its dependence on coal-burning utilities whenever feasible.

The council voted 11 to 2 to sell the city’s share, with members Nate Holden and Rita Walters voting no. Holden said the sale could lead to rate increases for DWP customers. He also urged the council to retain ownership so the city can press for tough requirements to reduce pollution at the plant.

Councilwoman Ruth Galanter, who heads the committee that oversees the DWP, said the city should not own a plant that creates pollution harmful to Native Americans on nearby reservations.

“The city had a very short window of opportunity to rid itself of a dirty, coal-powered, polluting power plant, which is poisoning the lungs and water sources of Native American children,” she said.