Contrary to conventional wisdom, electricity demand isn’t immune to price elasticity, and rate designs can encourage conservation. In particular, inclining block rates coupled with dynamic pricing...
East Vs. West: Growing the Grid
The models and motives behind tomorrow’s transmission expansion.
last year, at a workshop held by the CEC to develop its 2005 IEPR document, Neilsen reported that some 31 new coal-fired plants representing 18,500 MW had been proposed for the Interior West, and he counted 16 such plants (8,200 MW) then in the permitting process. That total, he said (the 8,200 MW), would emit more than 66 million tons of CO 2 per year (59.9 MMtCO 2e). That potential dollop of greenhouse gases would easily exceed the CO 2 reductions in California produced by all the CPUC’s energy efficiency goals—8 MMtCO 2e, plus motor vehicle emissions reductions under the state’s Pavley Law—30 MMtCO 2e, plus Gov. Schwarzenegger’s proposed acceleration of renewable energy to 33 percent by 2020—11 MMtCO 2e.22
Now, however, Neilsen cites Sempra and its 1,200-MW Granite Fox coal-fired generating plant proposed for Gerlach, Nev., just outside the California border. The Granite Fox plant otherwise would have easy access to California markets via the high-capacity Pacific DC Intertie.
Neilsen cites other proposed out-of-state coal-fired plants as rethinking their plans as well. Those projects include: (1) the 1,500-MW Desert Rock Power Plant (near Farmington, N.M.) proposed by Sithe Global Power (owned by a private equity fund); and (2) the planned addition of new capacity to the Intermountain Plant, in Utah, by a consortium of municipal utilities. (The Intermountain project, however, would have access to a DC tie line owned by the Los Angeles Dept. of Water and Power, which, as a public power entity, lies outside CPUC jurisdiction.)
Note that the Wyoming Infrastructure Authority had asked the CEC “to seriously reevaluate the legal foundation” of its GHG performance standard in comments filed with the CEC during the run-up to release of its IEPR. Wyoming had argued that the GHG standard raised problems with the Commerce Clause: “Although the standard purports to be fuel-neutral, in fact it is not,” claimed the WIA, “since of the likely sources of generation that could serve California in significant quantities, only coal generation cannot meet the standard.” 23
Neilsen recommends more work on coal gasification to solve this dilemma, and notes that Xcel Energy is supporting a bill pending in Colorado to help foster an ICGT project. He also cites help on the way from the EPACT 2005 legislation, which provides for assistance in developing IGCT technology for western coals, at altitudes above 4000 feet, which poses certain technical problems for gas combustion turbines.
Nevertheless, Neilsen warns that the “shadow” of all this potential coal-fired power threatens to polarize the energy debate in the West. 24
1. See, Petition for Declaratory Order, FERC Docket No. EL06-50, filed Jan. 31, 2006.
3. See “ A Candy-Coated Grid ,” Public Utilities Fortnightly , March 2006, p. 24, discussing proposals in FERC Docket RM06-4, issued Nov. 17, 2005.
4. See, Exelon Corp. Exhibit 1, FERC Docket No. ER03-262, filed Jan. 7, 2004. See also, “It’s Down to Dollars for AEP and PJM,” Fortnightly’s Spark, February 2004, pp. 6, 13.
5. Docket Nos. ER04-156 et. al., May 31,