States eye rescue of retiring coal plants

By Jason Plautz, Jeffrey Tomich | 03/07/2024 06:16 AM EST

Legislation is popping up to give states more power to intervene in retirements or even use taxpayer money to buy unprofitable plants.

Intermountain Power Agency spokesperson John Ward walks through a coal power plant in Delta, Utah.

Intermountain Power Agency spokesperson John Ward walks through a coal power plant in 2022 in Delta, Utah. State GOP lawmakers have introduced several bills that would make it harder for the Intermountain plant to be replaced with a turbine running on a blend of natural gas and hydrogen. Rick Bowmer/AP

Republican lawmakers in almost a dozen states want to prop up coal plants that face closure amid a boom in renewable energy and a federal crackdown on power plant pollution.

Legislation that aims to keep coal plants on the grid has been proposed in states from Alaska to New Hampshire. While many of the bills have failed to get traction so far, several are poised to become law in Utah and another recently passed the Kansas Senate.

The bills take various forms, but they generally give state regulators more power to intervene in coal plant retirements, requiring utilities to cover costs or find replacement sources. One Utah bill would even allow the state to purchase plants using taxpayer dollars.


Efforts by states to preserve coal plants aren’t new. But they come amid warnings from the North American Electric Reliability Corp., the nation’s top grid monitor, that many areas of the country face a growing risk of rolling blackouts partly because major wind and solar projects aren’t being built fast enough to replace retiring coal plants.

Sponsors of the bills say time is short to save baseload power, citing a growing reliance on variable renewable energy and concern about rising electric rates. Legislation has emerged in at least 11 states: Alaska, Arizona, Indiana, Iowa, Kansas, Kentucky, Maryland, Nebraska, New Hampshire, Utah and Wyoming

In many cases, their legislation resembles a 2022 model bill from the American Legislative Exchange Council, or ALEC, a network of conservative legislators. The proposal targets the preservation of “traditional power plants” — defined as coal, natural gas, nuclear and hydropower — to ensure electricity reliability.

“People were concerned that power plants were being taken offline before the new power plants were ready to go,” Joe Trotter, ALEC’s energy, environment and agriculture task force director, said in an interview. “When you marry that with basically the increase in electrification and electric cars — essentially the increased demand for electricity — it just creates a problem.”

It’s a claim that opponents of the bills dispute, pointing out that coal plants are now more expensive to run than renewable projects.

Michelle Solomon, a senior policy analyst at the Energy Innovation think tank, said many political interventions for coal may have a lot to do with “inertia.” Coal plants have long been economic engines for nearby communities, she said, and closures can be “devastating.”

However, that doesn’t justify keeping plants open past their useful life, especially given their climate impacts, Solomon said. Energy Innovation released a report last year that found that all but one of the nation’s 210 remaining coal plants cost more to run than if they were retired and replaced with solar, wind and battery storage.

“Coal’s decline has really sunk in,” Solomon said in an interview. “With the price of batteries coming down quite rapidly, it makes it a no-brainer to install renewables and storage instead of relying on a coal plant that’s going to be more expensive.”

Proposed rules from EPA would require coal plants to either retire by 2040 or capture 90 percent of their planet-warming emissions by 2030, adding to their operating cost. That rule — which could change before it is published — is expected to be finalized in April.

Utah’s ‘fair market’

The Utah Legislature has already passed a series of bills, not yet signed into law by the Republican governor, that would make it harder to retire the state’s coal plants. One of them would rewrite state energy policy and require that resources meet certain criteria, ranked in order of priority. Atop the list would be “adequate, reliable, dispatchable and affordable,” with “sustainable, secure and clean” at the bottom.

“What ties all of these together is that they’re spending so much money, so many taxpayer dollars putting up these big bills to basically thwart the efforts of the federal government to transition away from fossil fuels,” said Alex Veilleux, policy associate for the environmental group HEAL Utah. “If they put the same money in the direction the market is going, towards the new energy economy, we would be well on our way to making that transition.”

The bills also come with some urgency.

The Intermountain Power Plant, the state’s largest remaining coal plant, is set to be replaced in 2025 with a turbine running on a blend of natural gas and hydrogen, before moving to full hydrogen generation in later years. Two other large plants — the Hunter and Huntington plants operated by PacifiCorp — are scheduled to retire in 2032.

A bill from state Sen. Derrin Owens, a Republican whose district includes the coal mines that feed the Intermountain plant, would create a new state board to determine the “fair market value” of that facility and put it up for sale. If no offers come in at or above the set price, the owners would have to offer to sell the plant to the state of Utah.

Owens told E&E News that the bill was intended to allow Intermountain’s coal and gas units to run simultaneously. That would still result in a reduction in emissions, he argued, while helping attract manufacturers and data centers that want reliable power.

“It is meant to determine if we can save jobs in my district, maintain the lowest cost energy in the country and offer Utah a level of Energy Security,” Owens said in an email. “Unfortunately, the war on pollution has turned into a war on fossil fuels. Especially coal, but natural gas is next.”

Another bill that recently passed the Utah Legislature sets up a number of barriers to retiring a power plant, requiring state regulators to verify that a plant closing will not impact electricity reliability or raise costs for ratepayers.

All three Utah bills, if signed into law, would take effect before 2025 and would apply to Intermountain’s retirement plans.

The 1,800-megawatt plant, which is located outside of Delta, Utah, powers 35 municipalities and electric cooperatives in Utah and Southern California, including the city of Los Angeles. The Los Angeles Department of Water and Power — the plant’s largest customer — has committed to exiting coal by 2025, making the plant’s operations uneconomical.

The Intermountain Power Authority, which operates the plant, did not respond to a request for comment. Rocky Mountain Power, a subsidiary of PacifiCorp, has not taken a position on the legislation, said spokesperson David Eskelsen.

The notion that the state could end up paying for a coal plant has proven controversial, with local officials and environmentalists saying it would be a costly and cumbersome process.

In a committee hearing last month, the mayors of three municipalities around the Intermountain plant testified against Owens’ bill, saying it would be better for the economy to transition the plant to gas and hydrogen.

According to a fiscal note on the bill, it would also cost the state’s Division of Air Quality more than $1.7 million over three years just to hire consultants to analyze the plant’s cost and do legal review related to its air quality permits.

Severin Borenstein, faculty director of the Energy Institute at University of California, Berkeley, Haas School of Business, said he wasn’t aware of another state looking to pay to keep a retired coal plant online.

But other governments have offered subsidies to fossil fuel plants, he said, or put additional taxes and restrictions on competing renewable energy.

“It’s very much a political move designed to appeal to factions that are worried about losing jobs and not very worried about climate change or the other pollution that comes from coal plants,” Borenstein said. “That’s just pushing against science. I don’t think it’s good policy, but I see where it’s coming from.”

Reliability at the fore

Similar bills across the country reflect a range of policy ideas.

A proposal in Alaska, for example, would rewrite the state’s clean energy policy to allow certain coal-fired power plants to qualify if they burn low sulfur coal, which reduces emissions linked to acid rain. And in Wyoming, both legislative chambers passed a bill extending the compliance deadline for a 2020 law that requires coal plant owners to study the viability of installing carbon capture equipment before retiring their facilities.

The Kansas Senate also passed a bill last month that would bolster uneconomic coal plants and make it more difficult to shut them down.

S.B. 455 is a combination of two proposals — one from the state’s largest coal plant operator, Evergy, and another from the Kansas Chamber of Commerce. It specifically authorizes utilities to charge customers for operating and maintaining coal plants that run infrequently and may otherwise be slated for retirement.

To retire a coal plant, utilities would have to replace it with enough dispatchable generation to maintain reserve requirements set by the regional grid operator, the Southwest Power Pool. The bill would also stipulate that coal plants could only be shut down for economic reasons and not to meet environmental, social and governance (ESG) goals.

Both Evergy and the Chamber declined to make officials available for interviews. But in emailed statements, they praised the legislation’s Senate passage.

“We view these bills as a policy statement by the Legislature that coal is important to Kansas’ generation fleet,” Evergy spokesperson Gina Penzig said. “The bills will ensure that the retirement of coal plants is given a close examination and that utilities have the tools necessary to extend their life if it is in the best interests of customers.”

Eric Stafford, the Chamber’s vice president of governmental affairs, said in a statement that the group is agnostic on energy sources but wants to ensure state regulators have “clear direction that if a fossil fuel generation facility is going to be taken offline, it must be replaced with dispatchable energy.”

One of the bill’s main proponents in the state Legislature is Sen. Mike Thompson, who rejects the overwhelming scientific consensus that human activity is warming the climate. He said the measure is a response to the Biden administration and EPA’s proposed regulations to limit power plant emissions.

EPA “has been trying to implement through fiat various rules about emissions and carbon dioxide, sulfur dioxide, [nitrogen] oxide,” Thompson, a former television meteorologist, said on the Senate floor. “They’ve arbitrarily clamped down on this, and it’s causing coal plants all over the United States to be prematurely closed.”

But state Sen. Marci Francisco, a Democrat who voted against the bill, noted that the region’s grid operator, SPP, is adapting to the changing generation mix in the Great Plains. That effort includes updating how power plants are accredited for the capacity they provide.

“We have a Kansas corporation commission and a Southwest Power Pool that are focused on reliability,” Francisco said. The bill is also ambiguous in areas, she said, including a definition of “dispatchable” resources that may not include battery storage.

Zack Pistora, a Sierra Club advocate, told lawmakers that the bill would have Kansas consumers paying full price for coal plants that only operate part time. SB 455 is also silent, he said, on the cheapest alternatives: energy efficiency and demand response.

“We’re not getting the benefits from these clunker coal plants when we have other strategies to replace them,” he said.

But Michelle Bloodworth, president of the coal industry trade group America’s Power, said coal plants “are one of our most dependable sources of electricity” and that the group “wholeheartedly supports legislation that will make electricity supplies reliable.”

“Grid experts are projecting huge increases in electricity demand caused by electric vehicles, artificial intelligence, and other economic trends,” Bloodworth said in an email. “This means we need more sources of electricity, not fewer. “