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California's Green Wall

A new law dampens coal-by-wire prospects.

Fortnightly Magazine - March 2007

to zero or purchase rights from others in California who have excess, or from entities in other states or countries (to the extent that programs can be developed with those other areas). There is a provision in the California GHG legislation that allows the governor to modify the GHG deadlines in California if he determines that meeting them would cause significant economic harm.

Although not official, the California Energy Commission (CEC) has prepared calculations of GHG emissions that occurred since 1990 (see Figure 1) .

Global Energy has taken the CEC’s historical GHG data for electricity production and added our forecast of such data through 2020 ( see Table 1 ). Note, in the first column we assume that imports are not assigned in GHG emissions. In the second column we assume that imports are assigned GHG emissions based on coal-fired generation.

This forecast does not have the electricity production in 2020 meeting its 1990 GHG gas-emission levels. As the table indicates, from the standpoint of GHG emissions goals from power supplies for California electricity load, it does not matter if imports are considered coal-based or free of GHG since imports will be about the same in 2020 as they were in 1990. If the electricity sector needs to meet, on its own, its 1990 GHG levels, it will need to reduce GHG by about 30 million tons per year from what it is otherwise assumed to emit in 2020. Not counting imports, nearly all of California GHG from power plants comes from gas-fired resources. To meet its goals on its own, the power industry in California would need either to convert all of its gas- fired generation to highly efficient gas-fired generation or replace more of the generation with renewable power, which might cause significant economic harm.

In addition to this GHG legislation, California legislators have passed a bill (S.B. 1368) that prohibits any load-serving entity in California from acquiring a new baseload resource (either through ownership or purchased-power adjustments) that emits more GHG than a combined-cycle, natural-gas-fired baseload generation. This legislation simply reinforces the policy goal in California to be proactive in attempting to reduce global warming.

Paying for Green

The search for alternatives is, of course, not limited to large investor-owned utility players, but has spread to smaller players, including cities and municipalities not under the control of the California Public Utilities Commission. A case in point involves the tiny Truckee Donner Public Utility District on the north shore of Lake Tahoe in the Sierra Nevada Mountains. City officials were about to sign a 50-year contract with Intermountain Power Agency (IPA) based in South Jordan, Utah, to supply the growing community with inexpensive coal-generated power.

A few years ago, the city officials would have been thrown out of office by the public had they paid a nickel more for power than absolutely was necessary. But in this case, they came under intense pressure from some vocal locals, and considerable arm-twisting from powerful politicians, to reject the least-cost supply source. Gov. Schwarzenegger, as well as California’s senior Sen. Dianne Feinstein,