Mayor to Negotiate With Utah for More Energy

Los Angeles Mayor Richard Riordan will prospect for power in Utah today as he meets with the governor to discuss expanding a massive coal-fired generating plant that already provides enough electricity to light a third of the city’s homes.

The Los Angeles Department of Water and Power owns two-thirds of the electricity generated by the Intermountain Power Project, located about 150 miles southwest of Salt Lake City. The rest of the energy goes to other Southern California municipal utilities in Burbank, Glendale, Pasadena and Anaheim or to Utah.

With California’s electricity crisis making it critical--and lucrative--to boost the amount of energy available to the state, Riordan proposes adding 500 megawatts to 800 megawatts to the plant, half of which could be sold to California for 10 years. After that, Los Angeles’ energy needs are expected to grow to the extent that the city will need that extra power.

“The possibility of building a clean coal plant--and by that I mean as clean as you can get--is an option that the leaders of Los Angeles and California have to consider,” Riordan said. “It will guarantee us energy at prices several times below what we paid this winter.”

But as the mayor suggested, coal is among the dirtiest ways to generate electricity, and the proposal is generating steam from environmental groups.

“What the mayor of Los Angeles is asking Utahans to do is allow our air to get dirtier so California can sell power,” said Lawson LeGate, senior Southwest representative for the Sierra Club. “That just doesn’t seem appropriate.”

It also is a pricey proposition, costing $500 million to $800 million, plus an extra $50 million to expand the transmission lines that snake from the plant in the mountains of central Utah to Los Angeles.

Riordan said he hopes that the plant would pay for itself through power sales to the state, which has struck long-term deals for electricity with a number of private generators that are worth billions of dollars.

The electricity generated by the plant would cost only 2.5 cents per kilowatt-hour--compared to prices ranging up to $1 that have been charged to the state this winter. With debt service, the price of the power could be 5 cents, city officials said.

Utah Gov. Mike Leavitt--whose office did not return a call for comment Monday--and Riordan would have to agree on terms before the project could go to the DWP commission and Los Angeles City Council for approval.

The expansion of the plant is not in the 10-year plan for the DWP issued last year, which calls for refurbishment of existing natural-gas plants in and near Los Angeles to increase power supply. But Riordan administration officials said that with the price of natural gas soaring, the DWP must look to cheaper coal.

The new generating station that Riordan proposes adding to the plant would not be operational until 2006 at the earliest, according to city officials. At that time, the wholesale price of electricity is expected to drop well below the exorbitant levels that have pitched the state’s two private utilities into near-bankruptcy and allowed electricity generators--including the DWP--to make hundreds of millions of dollars in the energy markets.

California recently entered into a series of long-range deals with power generators to secure electricity through 2010, and plans to buy the remaining power it needs mostly on the spot market. Steve Maviglio, a spokesman for Gov. Gray Davis, said Monday that it was “kind of hard to tell” whether the state would be interested in contracting with DWP for the electricity generated by Intermountain.

Nonetheless, Riordan said he was optimistic that the deal would work. He said environmental concerns had to be balanced with energy needs, and noted that Utah could benefit from the expansion by securing new electrical power to supply its growing population. “It’s a win-win proposition,” he said.