Cooling opposition, Utah Legislature eases mandate to keep coal power plant operating

Power lines lead into the coal-fired Intermountain Power Plant on March 28, 2016 outside Delta, Utah. The IPP generates more then 13 million megawatt hours of coal-fired energy each year to Utah and Southern California. (Photo by George Frey/Getty Images)

The Intermountain Power Agency has new deadlines to submit a notice to decommission its coal generators near Delta. It also has more time to submit an air quality permit plan, and won’t have certain legislative interventions if it fails to submit a decommissioning notice on time. 

It’s a new plan approved by the Utah Legislature that now the agency doesn’t oppose.

Before the 66-6 vote in the House and the unanimous nod from the Senate, the bill was highly controversial. During public comment periods this year, mayors from municipalities that own the Intermountain Power Agency asked lawmakers to stop the bill, and later, the agency’s board chair wrote a letter to Gov. Spencer Cox asking him to veto it, as it would interfere with the agency’s multibillion-dollar plans to move to cleaner energy sources and jeopardize already submitted federal air quality permits requests.

“HB3004 does make some important adjustments. Definitely moves things in the right direction. So, we’re appreciative of that. IPA is not opposed to this,” Cameron Cowan, general manager at Intermountain Power Agency told the Public Utilities, Energy, and Technology Interim Committee on Wednesday.

SB161, titled Energy Security Amendments, was designed to extend the life of the coal-fueled generators at the Intermountain Power Plant past their 2025 retirement date. The bill created a “Decommissioned Asset Disposition Authority” and would require that the IPA — owned by 23 Utah municipalities — allow the state to buy the facility at a fair market price beginning July 2025.

HB3004, titled Energy Security Adjustments, keeps the spirit of the legislation, but makes a bigger effort to stay in line with federal regulations to protect an IPA multibillion-dollar natural gas and hydrogen facility, IPA Renewed.

The new legislation repeals the legislative management committee’s requirement to make recommendations, such as reconstituting the Intermountain Power Plant’s board, according to the bill’s chief sponsor, Rep. Carl Albrecht, R-Richfield. It also modified the deadline to submit a modified air quality permit to Dec. 30, 2024, giving the state’s Division of Air Quality 30 days to complete a review of the application.

The bill also nullifies the project entity oversight committee created in 2022 by HB215 — which required project entities to submit certain financial and operating information to a committee — “because it is proven to be ineffective in accomplishing its intended objectives.

“We’ve got 1,900 megawatts there, we don’t want to destroy it. We cannot afford to destroy it,” Albrecht said on the House floor. “It’s reliable, affordable, dispatchable power.”

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The bill maintains Utah’s goal to explore third-party purchasers for the plant. But whether the state will find a direct buyer or purchase the plant itself to later sell is still uncertain and will take an expert opinion to figure out, said Sen. Derrin Owens, R-Fountain Green, co-sponsor of the new bill.

There may be other tweaks to the policy in the Legislature’s 2025 general session, Owens added.

There’s one more goal to determine with the bill, Rep. Ray Ward, R-Bountiful, said to the House on Wednesday; to make an accurate estimation of the cost incurred by the state if it decides to buy the plant, among other environmental compliance issues. But the decommissioning authority has more than a year to figure it out. 

Leadership speaks about coal needs

With new demands for artificial intelligence and data storage, the U.S. “has real problems when it comes to power generation,” Senate President Stuart Adams, R-Layton, told reporters on Wednesday. And the Intermountain Power Plant may be part of the solution. 

“The IPP issue may be part of that as we look for power generation. We don’t know if it is or not, but we’re surely not going to give up our opportunity to have power generation as we need to be able to be competitive, not just in Utah, not just in the United States, but on a worldwide basis,” Adams said.

There’s not enough power generation in the country and its western region, House Speaker Mike Schultz, R-Hooper, said. In his view, this isn’t about coal, but about reliable, dispatchable, affordable energy.

“We’d love to see IPP (kept) open and operational. We’d love to see Rocky Mountain Power purchasing IPP in just a couple of years,” Schultz said.

The IPA had previously asked Gov. Spencer Cox to veto the bill, citing a “rushed” approval process in the Legislature. The agency also criticized that keeping the coal-fueled generators would interrupt its plans to build IPP Renewed, as keeping the coal facilities would mean a deviation from the air quality plan submitted to the Environmental Protection Agency, Nick Tatton, board chair at the IPA, told Cox in a letter.

Cox signed the legislation, but made a note to lawmakers indicating that he hoped they could reach amendments in a special session.

Not complying with commitments made to the EPA may result in an earlier closure of the coal generators and a “more stringent oversight of air permitting in Utah,” which would also translate to other industrial operators having to install more costly pollution controls, Tatton argued. 

As Los Angeles Department of Water and Power — the plant’s most prominent client — moves away from fossil fuels and after years of analyzing the potential market for the coal-generated power, the IPA has determined there aren’t any viable purchasers, Tatton added.

Rocky Mountain Power has also declined legislative invites to enter negotiations to purchase power from IPP, according to the letter.

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