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PUC plan restricts utilities' coal-power purchases: Commission vote set for Thursday would help limit greenhouse gases.(Sacramento Bee, The (CA) (KRT) Via Thomson Dialog NewsEdge) Jan. 24--As part of California's continued quest for cleaner energy, state utility regulators Tuesday announced a new standard for long-term electricity contracts that effectively steers the state away from coal. A so-called greenhouse gas emissions performance standard basically says that fuel used to generate electricity for California consumers must be at least as clean-burning as natural gas. A spokesman for Pacific Gas and Electric Co., the state's largest utility to come under the regulation, said the company supports the standard in spirit, though it has not yet seen the details. "Only 1 percent of our energy mix comes from coal, so in that sense, I think there's a limited impact on our business," said Keely Wachs, PG&E's environmental communications manager. Wachs said the utility has only a "handful" of long-term coal deals. "My understanding is that those contracts were signed in the '80s," he said. "They're not contracts we would necessarily sign today." Statewide, California relies on coal for about 20 percent of its electricity, nearly all of that imported from out of state. The standard doesn't explicitly bar the use of any particular fuel, but because coal is the most carbon-intensive of fossil fuels, the regulation is considered a de facto prohibition. Moving away from coal is part of the state's campaign to clamp down on emissions of carbon dioxide and other heat-trapping gases associated with global climate change. A ground-breaking law passed last year, the Global Warming Solutions Act, establishes the nation's first mandatory cap on climate-changing emissions. A related law, also passed last year, requires the state Public Utilities Commission and the state Energy Commission to establish greenhouse gas emission performance standards for investor-owned utilities and municipal utilities. The public utility district in the mountain city of Truckee attracted a national spotlight last month when it proposed to sign a 50-year contract for electricity from a yet-to-be-constructed coal-burning plant in Utah. Pressure from townspeople as well as public officials including Gov. Arnold Schwarzenegger helped spike the plan. The PUC announced its greenhouse gas performance standard Tuesday just hours before President Bush delivered a State of the Union address devoted in part to concerns about America's energy consumption habits and climate change. PUC officials said they expect the cost of electricity made from fossil fuels to rise as state and, eventually, federal regulations of greenhouse gases kick in. "We are trying to protect California ratepayers on the assumption of new controls on these plants in the years ahead," said commission President Michael Peevey. A spokeswoman for the coal industry argued that the standard itself will drive up electricity prices in California. "The larger concern for the people of California will be, where are they going to get their electricity?" said Carol Raulston of the National Mining Association in Washington, D.C. "They are going to pay more for electricity under any scenario because the legislation limits their choices." Peevey said no one can say for certain how the standard will affect supply and price in the short-term. "It will limit new coal development that is aimed for California, no question about that," he said. Peevey said he hopes California's commitment to developing more renewable sources of energy, increasing energy efficiency and relying on modern natural gas plants will make up the difference. The greenhouse gas standard doesn't rule out coal generation under all circumstances. Utility companies may commit to coal for periods shorter than five years (although they will not be allowed to sign four-year contracts repeatedly, Peevey said). They also may buy coal power for "following load," or intermittent demand -- the spikes in electricity use that come each morning as Californians wake up and get ready for the day, and each evening as they arrive home. Electricity to meet the very highest demand, which comes on hot summer afternoons when air conditioners are running full blast, also may come from coal. PUC officials said they don't expect the standard to put a dent in the state's present greenhouse gas emissions -- estimated at 492 million metric tons a year -- but it may help prevent emissions from continuing to rise. The PUC standard is scheduled for a vote Thursday and considered all but certain to pass. A comparable standard by the Energy Commission, for municipal utilities, is due by June 30. Copyright (c) 2007, The Sacramento Bee, Calif. Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |