March 19, 2013 / 7:45 PM / in 5 years

Los Angeles public utility says will be free of coal by 2025

LOS ANGELES, March 19 (Reuters) - The Los Angeles Department of Water and Power, the nation’s largest municipal-owned utility, will eliminate its reliance on coal-fired power by 2025, the city’s mayor said on Tuesday.

The effort comes as the utility is working to comply with aggressive California laws aimed at reducing greenhouse gas emissions to 1990 levels by 2020. The LADWP had said last year that state law effectively prohibited it from buying coal-fired generation once its current contracts expire.

“The era of coal is over,” Los Angeles Mayor Antonio Villaraigosa said in a statement.

The LADWP currently receives 39 percent of its electricity from two coal-fired plants: the Navajo Generating Station in Arizona and Utah’s Intermountain Power Project.

It plans to replace the power with increased energy efficiency measures and renewable sources. California utilities are required to source 33 percent of their power from renewable sources by 2020. Renewables currently make up about 20 percent of the utility’s generation portfolio.

Whether LADWP customers see their rates go up is “an open question,” according to Evan Gillespie, western region deputy director for the Sierra Club’s Beyond Coal campaign.

The environmental group praised the move.

“It’s not tomorrow, but 2025 is right around the corner,” Gillespie said.

To free itself from its dependence on coal, the LADWP plans to sell its 21 percent stake in the Navajo plant to another owner, Salt River Project, ending its use of power from that plant by the end of 2015. The plant’s other owners include the U.S. Bureau of Reclamation; Arizona Public Service, a unit of holding company Pinnacle West Capital Corp ; Nevada Energy and Tucson Electric Power, a subsidiary of UniSource Energy Corp.

That 1970s-era plant, located on Navajo land, will continue to operate without the LADWP. It faces several challenges, however, including a retrofit proposal by the Environmental Protection Agency that would require a $1.1 billion investment in emissions controls. Its site lease and certain permits begin expiring in 2019, though its owners reached a deal with the Navajo Nation last month that could let it operate until 2044.

The Intermountain Power Project in Delta Utah, will be rebuilt as a small natural gas power plant. The goal is also to develop renewable energy sources that can use the transmission lines that currently carry power from the IPP, which is owned by 23 Utah municipal utilities. That transition will start in 2020 and be completed no later than 2025, the LADWP said.

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