Utah and PacifiCorp’s Rocky Mountain Power utility struggle with climate change pressures that bump up against the state’s cheap source of electricity from abundant coal-fired generation. The utility thinks there is room to accommodate both, and state officials have not proposed new restrictions on existing generators.

Nevertheless, as a member of the Western Climate Initiative, Utah’s governor has agreed to reduce the state’s greenhouse gas emissions 15% below 2005 levels by 2020.

“We still think coal has a lot of value,” a Rocky Mountain Power spokesperson, David Eskelsen, told NGI. At the same time, he said the utility should be able to easily accommodate a shift in its power portfolio to accommodate up to 20% of its supplies coming from renewables while not diminishing its use of coal, which now accounts for about half of the power it supplies Utah customers.

“Since 2002, we began building two natural gas-fired plants and purchased a third one, so that represents more than 1,500 MW there,” Eskelsen said. “In addition, we have installed about 2,000 MW of wind projects or signed contracts with developers.” (These renewables go into the overall six-state PacifiCorp utility mix.)

Recent studies in Utah on energy, and coal in particular, have focused on 80% of the state’s power generation coming from coal-fired units and the corresponding jobs and economic multipliers associated with it. However, as Eskelsen pointed out, a lot of the coal-fired generation is represented by the huge Intermountain Power Project, for which 75% of the output is shipped to California. About 50-60% of the power consumed in Utah comes from coal plants.

Earlier this year, an energy adviser to Utah Gov. Dianne Nielson concluded that to achieve a 20% increase in energy efficiency by 2015 and 20% of electricity sales by 2020, the investment would result in almost 7,000 new jobs by 2020, $310 million in net new annual earnings, and $300 million in net annual increases in gross domestic product by the state. The conclusions are in “Building a Clean Energy Economy: A Study on Jobs and Economic Development of Clean Energy in Utah.”

Besides Rocky Mountain Power, which supplies about 80% of Utah’s electric utility customers, the state’s various small municipal utilities, which are heavily invested in coal-fired generation, have access to substantial amounts of hydroelectric supplies from two major dams in the state, Eskelsen said. “So the coal intensity of the electricity actually used in Utah is probably significantly below 80%,” Eskelsen said.

“We have a reasonable expectation that we can probably integrate 15-20% cost-effective renewables into our system without much trouble because our [integrated resource plan] identified a few years back that there is very likely 2,000 MW of renewable capacity, mostly wind. We were supposed to have achieved this level by 2013 and we have met that expectation early.”

In late June, a study by the Eccles School of Business at the University of Utah in Salt Lake City, “The Structure and Economic Impact of Utah’s Coal Industry,” said there was “a profound impact” on the state’s economy from the coal industry, both directly and indirectly.

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.