Glendale Water & Power officials plan to slowly wean the city off of coal as the utility’s ability to freely tap the controversial natural resource for power expires in 2020 due to state mandates.
But how much coal use can be scaled back in coming years depends on a number of factors, including long-term contracts with two coal plants, officials said at a Glendale Water & Power Commission meeting this week.
“We are trying to transition out of coal,” Assistant General Manager Steve Lins said Monday. “We do have a couple of opportunities [to do so] at both of our coal resources; however, nothing is probably going to start happening until 2017 at the earliest.”
The utility is tied up in long-term contracts with coal projects in New Mexico and Utah. Although there may be some options to exit the New Mexico contract early and join Los Angeles on a natural gas project to replace the Utah one, much is still up in the air, Lins said.
Coal accounts for about 35% of the city’s power, but Glendale needs to reduce that as its ability to emit hundreds of thousands of tons of greenhouse gas emissions ends in 2020.
Under a state law limiting emissions that harm the environment, Glendale gets “allowances” to emit 600,000 tons a year without financial penalty through 2020. After that, it must buy the “allowances” at a state auction.
“We’d have to go buy 600,000 allowances. If they’re $10 apiece, that’s $6 million,” Lins said, referring to rates at the latest state auction in November.
That would be a tall order for a utility struggling to pull itself into the black.
There are also other state mandates, including one that requires Glendale Water & Power to get 33% of its power from renewable sources by 2020. Meeting that benchmark may force officials to boost rates because renewable energy, such as solar, tends to be more expensive to produce.
“There’s still a lot of upward price pressure,” Lins said.