DWP watchdog warns high cost comes with L.A.'s coal-free plan
Weeks after Los Angeles Mayor Antonio Villaraigosa celebrated his plan to move the city off of coal-fired energy, a city watchdog has attached a giant price tag to the initiative.
Fred Pickel, the ratepayer advocate at the Department of Water and Power, said Monday that eliminating coal from the utility’s power mix ahead of a state-mandated deadline is projected to cost more than $600 million. What that could mean for ratepayers’ electricity bills is unclear, he said.
Pickel said he would urge city officials to look for ways to lower the costs Wednesday at a meeting of the City Council’s Energy and Environment Committee. “The question is, can we do this cheaper?” he said.
Last month, Villaraigosa and the DWP announced plans to dump the utility’s interest in a coal-burning plant in Arizona and to convert another one in Utah to natural gas.
The plan, which would make Los Angeles coal-free two years ahead of a state-imposed deadline of 2027, was lauded by environmentalists, including former Vice President Al Gore. Backers of the plan say eliminating the city’s consumption of coal-fired energy from the plants would be equivalent to taking 2 million cars off the road.
But Pickel cautioned that the proposal could have expensive consequences. Selling the city’s interest in the Navajo Generating Station near Page, Ariz., three years ahead of the current contract’s termination is projected to cost $150 million to $200 million, he said.
The cost of taking gas-fired energy from the Intermountain Power Project near Delta, Utah, is projected at $500 million, Pickel said.
Two coal plants currently provide nearly 40% of the city’s energy. Under the new plan, the city would supplant most of that with power produced by burning natural gas.
While natural gas is a cleaner energy, it is also more expensive. Pickel said the city should consider looking for cheaper, alternative sources of electricity to soften the blow of rate increases. He said one option could be to purchase more solar energy.
Although the DWP’s plan does call for existing transmission lines to be used for new renewable energy projects, Pickel said low projections for the future cost of solar mean the utility might want to rely even more on that option.
Under the current plan, the conversion of the Utah plant would begin in 2020.
A spokesman for Mayor Antonio Villaraigosa said the long time frame means the city will have “the flexibility to choose an appropriate exit date” from the plant and said the city would work to minimize the effect on ratepayers.
“Waiting until the last minute to divest could have disastrous consequences,” he added.
The mayor and others say that continuing to buy power from coal-fired plants could be costly because new regulations will require many plants to undergo expensive retrofits in coming years.
“Nearly every single coal plant in the country is facing increased costs,” said Evan Gillespie, who has been pushing the city to get off coal on behalf of the Sierra Club. “You need to look at what it’s going to cost to remain in the plant.”
On Wednesday, the Energy and Environment Committee will consider a plan to amend the utility’s contract with the Utah plant to allow it to transform its power supply to cleaner natural gas. The contract change requires the approval of the full council.
A spokesman at the DWP did not return requests for comment on Pickel’s projections.
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