Looking at future generation - The Richfield Reaper: Local News

Looking at future generation

As IPP seeks to convert from coal to natural gas electricity generation over next 12 years, Sevier Valley may feel impacts of the changes

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Posted: Thursday, March 6, 2014 8:00 am

DELTA — The Intermountain Power Project has been churning out some 90 megawatts of electricity a day, most of which is then routed to California consumers, for more than 25 years.

The coal-fired power plant located near Delta has become a magnet for energy development in the area — a wind farm near Milford and a utility-scale solar farm in the same area tie into IPP’s lines — but is now looking for a new way to keep itself viable moving into the future.

“Over the history of the project, 99 percent of the power produced at IPP has gone to the California entities,” said John Ward, spokesperson for Intermountain Power Agency, which operates IPP. “Once their current contracts with IPP expire in 2027, those purchasers will no longer have the ability to take power from IPP, due to governmental regulations.”

Ward said currently, any of the California interests who have a stake in IPP — altogether making up nearly a 75 percent stake in the project’s entitlement shares could not purchase power with the current emissions standards at IPP, except for the fact they are under contract until 2027.

“If California wanted to stop taking power from IPP, they could do it tomorrow,” Ward said. “It wouldn’t make sense, however, because they still have to pay on the debt service for the plant.”

That debt, according to Ward, is set to be paid off in 2025, which has left IPA looking for a way to make itself viable to its primary interests before that time.

The current plan being pursued by IPA is to turn IPP into a natural gas power plant by 2025.

Ward said the plan would be to begin construction on the natural gas facility in 2020, erecting the new facility on property originally designed for two additional coal-burning units at the outset of the project. He said exactly what IPA would do with the two current 750-megawatt units is still up in the air.

“A decision of what to do with the coal units hasn’t been decided yet,” Ward said. He said they won’t be physically converting them to produce power with natural gas, leaving them open to being purchased by a third party, or possibly eventually being torn down.

Either way, Ward said IPA’s future is in natural gas power generation.

“This development that started in the ’80s has become a magnet for energy development in the area, and it’s been a huge economic contributor to the state as well,” Ward said. “That’s the main drive behind giving this operation another 50 years of life. It would be a shame to let this thing just disappear.”

Ward said most of IPA’s purchasers are moving away from coal, and many are on board with their plans to convert to natural gas generation. He said in order to make the shift, IPA has to get its shareholders to agree to allow them to move forward.

“All of the project participants have to agree to modify the project,” Ward said. “It just means we need them to sign before the project can go forward. Our hope is that we can get everybody on board so we can move forward with the subscription process later this year to determine how big the plant will be.”

According to Ward, IPA already has its anchor purchaser on board with the Los Angeles Department of Water and Power, which makes the project already viable.

“The largest taker of power right now is LADWP, and we know it’s in their resource plan to take some 600 mw from the project,” Ward said. “There’s already been enough interest shown in this project to build one unit, the question will be if it will be one unit or two units.”

Ward said the most important shareholders to get on board with the project are IPP’s 23 municipalities.

“Currently, we have 22 of the 23 who have signed contract amendments to allow us to modify the project,” Ward said. “The only one left is Monroe City.”

Monroe City hasn’t been too accepting of the proposed changes.

City council members toured IPP’s current facility in Delta Feb. 25 to get a better idea of how the project operates, spoke with project executives following the tour, and expressed their concerns about the future.

“The biggest problem we have is we have something good — it works, it’s viable,” said Mayor Kirt Nilsson. “Why do we want to throw it away?”

The council was scheduled to continue discussions with IPA officials during a work meeting Tuesday, March 4, after Reaper press time.

Editor’s note: This is the first in a series of articles focusing on the changes coming to IPP and how they might impact the Sevier Valley. See upcoming issues for stories following this topic.

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