In attempting to chart an uneasy future away from coal-fired generation and toward more renewable resources, the nation’s largest municipal utility, the Los Angeles Department of Water and Power (LADWP), remains highly dependent on natural gas to fuel its power plants, LADWP officials told a citizens meeting last Thursday.

“Going forward some of our biggest gas needs will go toward backing up the intermittent renewables — solar and wind,” said Randy Howard, director of power system planning and development, who said half of the utility’s 20% reliance on renewables last year came from wind and solar projects.

At the last in a series of public workshops to discuss LADWP’s need for rate increases averaging about 5% annually for the next three years, Howard and LADWP General Manager Ron Nichols received questions about environmental impacts of natural gas production, particularly the use of hydraulic fracturing (fracking). Howard acknowledged that some of the muni’s extensive gas supplies come from the fracking process.

“There has been a lot of attention given to certain wells on the East Coast and in Texas that have involved fracking,” Howard said. “Is there the potential for some of the fluids getting into the groundwater? Maybe. It is still being investigated. In the gas that we procure, fracturing is used, and we have verified with our drillers that fluids they use are not harmful to the environment, but we recognize it is still a concern to the public.

“The industry is working hard [to determine whether any harm to water supplies is taking place], but these are drilling practices used around the world.”

Howard stressed that natural gas cannot be considered a “renewable” source, but it is a key to the transition to more renewables, and LADWP also seeks to use more “renewable gases,” such as biogas, including landfill gas or gas from farm waste and sewage treatment. “That is a good source of renewable energy,” he said.

The context for the city utility’s comments on gas for its power plant fleet was an ongoing public discussion on rates, a new ratepayer advocate for the city that voters approved last March and the continuing need to transfer close to a quarter of a billion dollars to the city’s general fund. Complicating all of this is the increasing pressure for LADWP to lessen its historic dependence on out-of-state coal-fired generation from plants in Arizona, Nevada and Utah. All of this — along with the switch to renewables — carry added costs.

“Some people complain that we aren’t doing it [getting off coal] fast enough, and others say we really haven’t told them what the added costs are,” Nichols said. “And we haven’t really told anyone what the costs are because they really haven’t occurred yet.”

Noting that LADWP already was out of the now-closed Mohave plant in Nevada, Nichols said the city utility may end its ties to the Navajo plant in Arizona by 2014. At the latest, the muni would be out of Navajo by 2019.

“Since 2014 is the tail end of our current rate [increase] period, we really haven’t had a full discussion about that and what it means,” he said. “We need to look at the cost considerations and the carbon limitations. We need to have more discussion.”

Nichols also noted that if natural gas prices stay low, it “makes everything else we are trying to do [renewables, etc.] that much more expensive.” He said the all-in average cost of the utility’s renewable-based power currently runs about 11 cents/kWh.

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