By Matthew L. Wald of The New York Times

A major Midwest utility, Ameren, said Monday that it had created a new subsidiary to build transmission lines in Missouri and Illinois that will bring more wind power onto the grid – not to mention coal power, from clean to conventional.

Saying that it was encouraged by a law enacted in June in Illinois that is supposed to streamline the approval process,  Ameren, based in St. Louis, said it had $3 billion in potential new power lines in its sights. Financing will be easier to secure under this new structure, said Maureen Borkowski, who was named president and chief executive of the new subsidiary, the Ameren Transmission Company. Creation of a new utility to specialize in transmission is an unusual step, but Ms. Borkowski said that creating a new company that is a “transparent entity in the marketplace” would help it attract capital.

The Midwest Independent System Operator, the grid within which Ameren lies, has 5,000 megawatts of wind projects that want to be connected, she said. If wind is added to the grid in large quantities, the company’s 64,000-square-mile territory will become a thoroughfare for that energy, she said.

But the existing system is congested, she said, meaning that cheap electricity is kept out of the market at times because there is no way to get it to where it is needed, and more expensive generators are run instead. Often, that cheap electricity is from coal; this situation is common in the United States.

In addition, Ameren’s projects would connect to two planned coal plants that would capture the carbon dioxide they emit — Futuregen and the Taylorville Energy Center — and a conventional coal plant now under construction, thePrairie State Energy Campus. And the lines would link to Ameren’s existingGrand Tower plant on the Mississippi River, which was built in 1924 to run on coal but now uses natural gas.

From the American Natural Gas Alliance

Michigan-based municipal utility Traverse City Light & Power has put off plans to replace a coal-fired power plant with a biomass project, and is instead eyeing plans to build a natural gas-fueled plant Bloomberg reports .

The original plans called for the facility to burn wood (biomass) to help Traverse City Light & Power meet a goal of supplying 30 percent of their electricity requirements with renewable energy by 2020. The utility’s board will revisit those plans in July to discuss the shift in direction and to re- evaluate its strategic goals, the Traverse City Record- Eagle reports .

“We’ve listened to many of our ratepayers tell us they don’t know enough about biomass and some have suggested they are more comfortable with natural gas as a power generation resource,” said Chairman Mike Coco.  A utility-commissioned survey released in April 2010 revealed that more than 53 percent of local resident and business respondents supported the natural gas project.

Natural gas is a clean and highly efficient form of energy. It is twice as clean as coal when it comes to carbon emissions. It also produces 80 percent fewer NOx emissions than coal power and virtually no sulfur dioxide, mercury or particulate pollution. In fact, a study released last week by MIT, titled “The Future of Natural Gas” suggests that by decommissioning older, less efficient coal plants, the U.S. can quickly and substantially reduce the amount of carbon and other harmful pollutants from entering the atmosphere.

Natural gas also is extremely reliable and provides the essential back-up critical for renewables in electric power production – key to helping Michigan meet its renewable portfolio standard, which requires utilities to derive 10 percent of their power from renewable energy sources by 2015.

Our nation’s vast domestic supplies of natural gas—including new findings in Michigan –significantly change the energy game in the U.S. Last June, the Potential Gas Committee reported the U.S. has 35 percent more recoverable natural gas than thought before. That’s the highest resource total ever reported by the organization in its 44 years. Our nation’s abundance of shale gas also continues to be a major player in helping keep residential rates for consumers affordable.

Like Traverse City Light & Power, more and more utilities are looking to natural gas as a clean, abundant and reliable choice to meet our nation’s energy needs. Natural gas is a smart choice. It’s also the natural choice for utilities across the country – as they stand on the front lines of reducing our environmental footprint and progressing our clean-energy future.

By Ryan Randazzo of The Arizona Republic

Salt River Project customers will begin paying about $6 more on their monthly bills this spring, most of which will pay for a new $1 billion coal-fired power plant near Springerville in northern Arizona.

Unit 4 at the Springerville Generating Station began commercial operations in December and has been running at full throttle since then, burning about 60 rail cars’ worth of coal a day from the Powder River Basin in Wyoming.

The plant supplies low-cost electricity to the non-profit utility, but because of the stiff fight required to get it built, cost overruns and threat of global warming, some experts wonder if it will be the last new coal plant built in Arizona.

Not only did the plant overshoot its original cost estimate by $350 million, but legislation proposed by Congress to limit greenhouse-gas pollution could also make running the plant even more expensive, because coal has more of those emissions than natural gas or other power sources.

David Areghini, SRP’s associate general manager of power, said it would be nearly impossible to permit another coal-fired plant.

Arizona Public Service Co. has ruled out more power from coal unless there is a way to handle the carbon-dioxide emissions that contribute to climate change. Tucson Electric Power Co. also is proposing ways to meet energy demand without new coal plants.

“Most people will tell you, unless something changes, there probably won’t be another coal plant,” said Bill Rihs, the manager of major projects for SRP who oversaw Unit 4′s construction. “That depends a lot on future regulations like cap-and-tax (greenhouse-gas legislation), which doesn’t make it attractive for us or anyone else to develop a coal plant.”

It’s clear from the way SRP announced the Springerville plant that utilities view coal as a necessary evil needed to provide around-the-clock power, while generating environmental controversy.

When SRP announced Unit 4′s commercial operations in December, it simply sent a press release stating the coal plant was up and running.

It hardly compared with the fanfare that greeted the state’s first wind farm a couple of months prior, even though the coal plant cost 10 times as much and will generate about 25 times the amount of power throughout the year.

The Dry Lake Wind Power Project is in the same area and also sends all its electricity to SRP. The dedication ceremony drew political dignitaries from across the state and even U.S. Secretary of the Interior Ken Salazar. But getting Unit 4 built at Springerville was arguably a much larger accomplishment for SRP, considering the effort it took.

SRP and Tri-State Generation and Transmission of Denver had to pay to add environmental controls to Springerville’s Units 1 and 2 before getting the required Environmental Protection Agency permits to build Units 3 and 4. SRP’s share of the upgrades was $28.8 million.

Tucson Electric Power finished the first two units in 1985 and 1990, and the third opened for Tri-State in 2006.

SRP takes 100 megawatts from Unit 3 and all 400 from Unit 4, which is enough to power about 100,000 homes.

With the power from Unit 4, SRP has been able to shut down some of its natural-gas burning plants in the Phoenix area for the winter because their power is not needed.

“This is much less expensive to run,” Rihs said.

Electricity from Unit 4 costs 30 to 50 percent less than energy SRP would have to buy on the market, according to SRP.

Unit 4 also has a $2 million silo that will use a carbon-injection system to clean mercury emissions from the plant, but it is not used yet because it is not required. The expansion with Units 3 and 4 faced opposition from environmental groups such as the Grand Canyon Trust in Flagstaff.

To get the new plant built, SRP also agreed to set aside a $5 million fund for renewable-energy projects in northern Arizona, and the Grand Canyon Trust is helping the utility decide which projects the money will fund.

“Even though we intervened to stop the construction and we lost, the settlement contained important concessions,” said Roger Clark, a program director with the Grand Canyon Trust, which fought the permit at the Arizona Corporation Commission and also challenged the permit in court.

“They had to clean up the old plants and make the new ones less dirty, and create the renewable-energy investment fund,” he said.

Unit 4 was originally estimated at $643 million but it was built during a time when labor and material prices escalated quickly, Areghini said.

First SRP added about $78 million in design improvements from the similar Unit 3 that had just been constructed.

SRP also paid about $100 million more to build the plant on a short schedule, and the escalating price of labor and materials during the 2005-06 timeframe cost an additional $188 million, he said.

When compared with coal-fired plants that were commissioned and completed in the same time period, from Arkansas, Wyoming, Kansas, Colorado, Texas and other locations, Areghini said Springerville’s costs were average and that overruns were common at the time because of labor and material prices.

“The industry was extremely busy,” Areghini said. “Even (Hurricane) Katrina carryover was sopping up labor.”

But critics said the plant was a poor choice.

“From a cost standpoint, they never get it right . . . and it is not currently needed to meet the needs on SRP’s system,” said Tim Hogan, director of the Arizona Center for Law in the Public Interest.

Hogan’s group acts as a watchdog of SRP’s power rates and he also served as the attorney for the Grand Canyon Trust and the Land and Water Fund of the Rockies when they challenged the permit for Unit 4 in the early 2000s.

“At the time, it was clear there was going to be some form of additional expense associated with carbon, and they didn’t factor that in at all,” Hogan said.

Clark said that with coal-fired plants in New Mexico, Nevada and Pennsylvania struggling with their permits or being canceled, it’s unlikely Arizona will see another after Springerville.

“The cumulative risk associated with carbon that includes everything from mercury to the water needed to run the plant, to liabilities to deal with coal combustion waste all are uncertain and increasing liabilities to existing plants’ future,” he said. “And they certainly are there in spades for new plants.”

By Cathy Proctor of the Denver Business Journal

A proposal to reduce Xcel Energy Inc.’s coal-fired power generation along Colorado’s Front Range, and replace the use of coal with natural gas or other power sources, has gained the backing of Democrats and Republicans, Gov. Bill Ritter’s administration, environmentalists, the utility and the state’s natural gas industry.

The bill — HB 1365, dubbed the Clean Air-Clean Jobs Act — was introduced at the state Legislature Tuesday and speeded into its first committee hearing before the House Transportation and Energy Committee.

The bill is sponsored by state Reps. Ellen Roberts, R-Durango, and Judy Solano, D-Brighton, as well as Sens. Bruce Whitehead, D-Hesperus, and Josh Penry, R-Grand Junction. Ten of the 11 committee members Tuesday are co-sponsors of the bill.

The bill passed the committee by a vote of 10-1, with Rep. Randy Baumgardner, R-Hot Sulphur Springs, the only no vote.

“This legislation gives us a chance to clean the air in Rocky Mountain National Park, to reduce the Brown Cloud and to cut mercury emissions that threaten the health of our children,” Ritter said in a statement. “By crafting this uniquely Colorado solution, this bill also will allow us to comply with looming federal clean air standards.”

The bill’s authors hope to launch a comprehensive approach to dealing with harmful emissions from Xcel’s Front Range coal-fired power plants in one fell swoop over many years.

The other option, according to state officials, is a piecemeal approach to combatting emissions of sulfur dioxide, nitrogen oxide, mercury, and carbon dioxide as anticipated federal regulations on each pollutant are handed down one by one.

It will be less expensive for Colorado, its businesses and its consumers in the long run to do a wide-ranging, comprehensive plan than respond to the regulations one at a time while running the risk that federal officials will craft their own plan and hand it to the state for implementation, said Martha Rudolph, executive director of the Colorado Department of Public Health and the Environment.

The federal Clean Air Act requires Colorado to submit a plan to address regional haze by early next year or the U.S. Environmental Protection Agency will write its own plan for Colorado.

The bill’s sponsors anticipate that Xcel will retrofit, retire or repower some of its coal-fired power plants along the Front Range. Under the proposal, Xcel must file a plan to do so with the Colorado Public Utilities Commission by Aug. 15, 2010.

The goal is to reduce nitrogen oxide emissions by 70 percent to 80 percent by the end of 2017.

Ritter said the bill has been in negotiations for about a year.

One group left out of the conversation was the Colorado Mining Association.

Colorado is ranks eighth in coal production in the U.S.; it ranks sixth in natural-gas production.

The mining association’s executive director, Stuart Sanderson, blasted the proposal as a back-room deal cut between the administration, environmental groups, Xcel and the state’s natural gas industry.

“We were deliberately excluded,” Sanderson said. “This was a deal cut with Xcel, the natural gas industry and the governor’s office. They need to slow this down and allow the other constituents a chance to have a say.”

Sanderson said he hopes the Legislature will convert the proposal to a plan to study the situation.

“They’re making a bet that the regulations will be so,” Sanderson said. “In this industry we’ve learned that’s not always the case.”

Sanderson noted the irony of timing in introducing the proposal the day after Xcel told state regulators that electricity bills will be 8 percent higher in the second quarter due to higher prices for natural gas, used to fuel some of the utility’s power plants.

Ritter said the bill includes support for creating long-term fixed-price contracts between natural gas companies and the utility — something that could smooth the spikes in the price of the commodity. Currently, natural gas contracts are for a fixed supply at prices that float up or down depending on the national market.

By Stephanie Tavares of the Las Vegas Sun

A controversial coal-fired power plant was supposed to be under construction near Mesquite by now.

Sithe Global Power planned to have the Toquop Energy Project generating relatively cheap electricity by 2013 so it could sell the power wholesale to Nevada and other Southwest states.

But the site remains empty, and many Mesquite officials, who haven’t heard from Sithe in months, figure the coal plant is not going to happen, Mayor Susan Holecheck says. Coal plant opponents such as the Sierra Club have sent out news releases predicting the plant’s demise.

If they’re right, Southern Nevadans might be able to breathe a little easier. The plants’ smokestacks would have released microscopic particles that studies have found can cause heart attacks, strokes and respiratory diseases hundreds and even thousands of miles away.

Opponents have many people to thank for keeping the coal plant on ice.

The Bureau of Land Management seems to be sitting on the plant’s environmental impact statement. Its release was expected months ago. The public-comment period, another prerequisite for BLM approval, can’t begin until that environmental assessment is released.

The developer has yet to explain where it will get the water it needs for Toquop.

Although Sithe Chief Operating Officer Thomas DeLeo maintains his company is not canceling the project, some experts say it will have to beat the odds to get built.

Plans for dozens of coal-fired power plants across the country, including two in Nevada, have been scuttled in recent years by permitting issues and costs.

“The proposed coal plants across the country are dropping like flies,” notes Utah Physicians for Healthy Environment President Brian Moench, whose group opposes coal plant development.

Energy experts and coal opponents say plants just don’t pencil out in today’s regulatory environment.

The cost of coal-fueled electricity is expected rise dramatically over the next few decades as mitigation requirements increase, air pollution standards get tougher and Congress mulls taxing greenhouse gas emissions.

“The cost of carbon is a significant one,” says Dan Bakal, director of electricity power programs for CERES, a nonprofit group that examines the economics of sustainability. “It’s still uncertain how much it might be or what the perimeters of climate policy are going to look like, but any developer should be assuming there will be a large cost of carbon over the life of the plant. That does have an impact on development.”

That makes other cleaner and less-controversial technologies economically competitive.

Speculation is that Toquop might be built, but fueled by natural gas rather than coal. Its first BLM environmental review was for a natural gas power plant. But in 2007, when the price of natural gas was fluctuating wildly, the company decided to go with coal instead.

What at the time seemed like an economically conservative move has since turned out to be a financial quagmire.

“The credit markets are still fairly cautious, and there is, for coal plants specifically, a higher level of concern and scrutiny than there has been,” Bakal says.

Meanwhile, natural gas prices have stabilized as extraction techniques became cheaper and new supplies opened up.

But switching to natural gas doesn’t resolve the question of who would buy electricity from Toquop.

The booming growth that was expected to create a market in the Southwest for Toquop’s electricity has gone bust. The recession and government-initiated energy conservation campaigns have resulted in decreased demand for electricity.

And in Nevada, NV Energy has been quietly assembling new or upgraded power plants that would be connected by a planned cross-state transmission line. The company expects to make the state energy independent soon.

Arizona and Utah have seen their growth, and therefore their energy needs, slow down.

California looks like Toquop’s best shot, but only if the plant uses natural gas. The Golden State has taken a stand against buying any more coal energy.

By David Roberts
Grist.org