New technology could allow more coal power to be piped in to California

Washington (Platts)--17Oct2005

Emerging policies to reduce greenhouse gas emissions could spark innovations
in technology that could smooth the regulatory and political path of the
proposed $3.3-bil Frontier transmission line, according to California Public
Utilities Commission President Michael Peevey.

The four-state line would bring coal-fired power to California from projects
in Nevada, Utah and Wyoming. California Gov. Arnold Schwarzenegger supports
the 1,300-mile, 500-kV line, which would export about 6,000 MW of coal-fired
power and another 6,000-MW of wind power.

But the California Energy Commission has called for a performance standard for
utility procurement to be set no lower than levels achieved by a new
combined-cycle natural gas turbine. The PUC has called for the standards to be
set at levels of existing combined-cycle turbines. The proposed standard could
effectively bar coal-fired power into the state using most existing combustion
technology.

The proposed requirements, "may very well be technology inducing. [They] will
stimulate improvements in technology so we could get to [integrated
gasification combined-cycle coal plants] with sequestration. If we could do
that, then coal would be looked on with favor to come to California via wire,"
Peevey said in an interview last week with Platts.

There has been debate in California as to whether a so-called "CO2 adder"
requirement will block new coal-fired projects, like Sempra Energy's 1,450-MW
Granite Fox project in northern Nevada, from exporting generation into the
state.

Peevey affirmed his commitment to GHG reduction targets that Schwarzenegger
set in June. Those targets call for the state to reduce GHG emissions to 1990
levels by 2020. Reaching these goals will require significant improvements in
emissions from power plants in the state and elsewhere, in Peevey's view. "We
don't want to encourage technologies that run counter to those goals that he
set."


For more information, take a trial to Platts Coal Trader at
http://www.coaltrader.platts.com.

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.