February 13, 2018 Read More →

Utah Lawmaker Wants to Sue California for Cutting Back on Coal-Fired Power

Salt Lake Tribune:

When Utah’s Intermountain Power Plant sells its electricity to Southern California, utilities there must pay an extra $15 per megawatt hour. That’s a special penalty on coal, a fuel that emits more heat-trapping carbon dioxide than any other.

Now Utah Rep. Mike Noel wants to spend $2 million on private lawyers to sue California over that policy, which the Kanab Republican says amounts to an “excise tax” on Utah coal that is putting miners in Delta out of work.

The point of the Golden State’s cap-and-trade program is to use market forces to encourage companies to reduce emissions. Companies are required to purchase allowances for each ton of carbon dioxide they release.

Noel is among several rural lawmakers supporting a legal challenge to California’s cap-and-trade program and its penalties on electricity produced with coal.

Noel said the charge was a clear violation of the U.S. Constitution’s Commerce Clause. “It’s like California is their own China,” he said. “They are putting taxes on a product we produce here so it makes our product not viable in their energy market.”

But an official with California’s Air Resources Board said that was a mischaracterization.

“We are not forcing people to pay a tax,” Stanley Young, the board’s spokesman, told The Salt Lake Tribune. “It’s an effort to ensure that the electricity California is consuming is the lowest level of carbon intensity possible.”

Critics of the cap-and-trade program contend it raises electrical rates for California consumers while providing no demonstrable benefits. Business leaders in the state have already filed legal challenges, but have lost so far.

“The courts said [cap and trade] was not a tax,” Young said, “if anything, it is more akin to a permit.”

For California utilities, the program raises the price of power produced at the 1,800-megawatt IPP, which exports three-fourths of its output to six Southern California municipalities, with nearly half going to Los Angeles. The extra costs have power customers pulling back so the Utah plant’s output is now at its lowest ever, less than 8.8 million megawatt hours last year.

While the IPP facility remains the leading consumer of Utah coal, its use has fallen to 3.65 million tons and unused coal is piling up. As of June 30, the plant had nearly $22 million worth of coal on hand, according to IPP’s latest annual report.

More: Are California climate policies unfair to Utah?

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