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Utah tinkers with the energy law targeting Delta’s Intermountain coal power plant

Piles of coal wait to be burned outside Intermountain Power Plant on Wednesday, June 22, 2022, in Delta, Utah. Developers in rural Utah who want to create big underground caverns to store hydrogen fuel won a $504 million loan guarantee this spring. They plan to convert the site of the 40-year-old coal power plant to cleanly-made hydrogen by 2045.
Rick Bowmer
/
AP
While Utah still has a pathway to take over coal-fired elements of the Intermountain Power Plant in Delta, Utah, seen here on June 22, 2022, revisions to that law back off on some deadlines and the Legislature’s authority over the company that runs the facility.

Is it meeting a growing demand or state interference in the free market? The Utah Legislature used a June 19 special session to revise an energy law it passed earlier this year to deal with the state’s future control over power plants.

Energy Security Adjustments” adjusts the contentious law but it still gives the state a pathway to purchase coal-fired elements at the Intermountain Power Plant in Delta before they are replaced by natural gas and hydrogen and decommissioned in 2025. The bulk of the power produced by the plant — nearly 79% — is sent to California, but they are weaning off of coal. The remainder of the production is purchased by Utah cities and cooperatives.

For Republican sponsor Rep. Carl Albrecht, the new adjustments still give the state “the basis for keeping the IPP plant operating.”

“We've got 1,900 megawatts there. We don't want to destroy it. We cannot afford to destroy it. It's reliable, affordable, dispatchable power.”

After conversations with the Intermountain Power Authority, which controls the IPP, what’s changing are deadlines for permits around decommissioning assets and air quality.

Gone is a July 1 deadline to notify the state if IPP intends to apply for a new air permit. It’s now set for Dec. 31, 2024, and is the responsibility of the state’s Decommissioned Asset Disposition Authority. The changes also repeal the Legislature’s authority to potentially reconstitute IPA’s board.

“We're greatly appreciative for the consideration, the time and effort that's been put into this,” IPA General Manager Cameron Cowan told lawmakers at a committee hearing before the special session.

“[The bill] does make some important adjustments, and definitely, moves things in the right direction so we're appreciative of that.”

The Legislature identified “Utah energy independence” as a priority this year and passed several bills about the coal industry in particular.

According to leadership, the special session was about meeting a growing energy demand.

“It's not about coal,” said Speaker of the House Mike Schultz. “It's not about any other thing other than reliable, dispatchable, affordable energy for the citizens of this state.”

Another motivator for lawmakers has been the rise of artificial intelligence and the expected demand the technology is placing on data centers and the grid that powers them.

Senate President Stuart Adams called the emergence of AI a “new age” for power generation.

“Nobody even knew a year ago the demand that AI artificial intelligence would take, the amount of power it would take.”

Even so, coal production has declined over the past decade as renewable forms of energy became cheaper and more available. Critics say this legislation is the state interfering with the free market.

For some Democrats, the changes are a step in the right direction but it’s still not a perfect solution.

“I think the best solution would have been to repeal and just allow the market to drive this instead of getting the state involved,” said Democratic Sen. Nate Blouin. “But, you know, that's probably not on the table.”

For Blouin, state involvement in the energy sector doesn’t have to be a bad thing.

I think public power is an interesting conversation to have and I think it's a conversation I would love to engage in, whether we're talking about coal or other areas,” he said.

“I think it generally leans into more of a socialist perspective if you're talking about running energy operations as a state. That's usually a private market. I would be thrilled to see us at least engage in that conversation.”

The bill passed almost unanimously with six Democrats casting “no” votes in the House.

Sean is KUER’s politics reporter.
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