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State acts to limit use of coal power

By Margot Roosevelt (Los Angeles Times) - May 24, 2007

The California Energy Commission on Wednesday imposed new rules that effectively forbid the Los Angeles Department of Water and Power and all other municipal utilities in the state from signing new contracts with coal-fired power plants.

The move, together with identical regulations imposed on private utilities in January, is a significant step toward reducing the contribution of California, the world’s sixth largest economy, to global warming.

“This will reduce greenhouse emissions throughout the Western states,” said Claudia Chandler, a spokeswoman for the California Energy Commission. “People have long been critical of California for exporting its pollution…. Now we are holding ourselves accountable.”

California, with the strictest pollution laws in the nation, has largely phased out coal-fired generators within its borders. But the state still buys about 20% of its electricity from coal-fueled power plants in other states.

The DWP buys 47% of its power from two massive coal-fired plants in Utah and Arizona that are major sources of carbon dioxide and other greenhouse gases. Those contracts expire in 2017 and 2027. Now, under state law, they cannot be renewed unless those plants find a way to pump their emissions underground, but the technology to do so is unproven.

Nor can Pasadena, Burbank, Glendale and other cities that own their utilities forge any new contracts with coal-fired generators, or with gas-fired plants that lack modern pollution controls.

“We saw this legislation coming and we support it,” said David Nahai, president of the DWP board. The board, with a mandate from Mayor Antonio Villaraigosa, has hiked the agency’s renewable energy supply from wind farms and other sources from 3% to 8% since October 2005, Nahai said. “This utility is turning itself around.”

The state’s action will help Villaraigosa carry out his recent pledge to increase the amount of renewable power to 35% of the city’s energy portfolio by 2020, Nahai said. He said the city expects only a moderate increase in electricity rates as a result — about 1.4% over the next five years for an average-sized business. “It is affordable, and the cost will be spread over a long period of time.”

Environmental groups hailed the new restrictions on power purchasing, which grew out of a law sponsored by state Sen. President Pro Tem Don Perata (D-Oakland) last year. That law is a first step in carrying out the goals of the Global Warming Solutions Act, or AB 32, which requires the state to reduce greenhouse gases to 1990 levels by 2020. It will have the immediate effect of preventing utilities from locking in long-term contracts for dirty power, said Audrey Chang, staff scientist for the Natural Resources Defense Council.

The maximum emissions allowed under the rules issued for municipal utilities by the California Energy Commission, and for private utilities by the Public Utilities Commission, are 1,100 pounds of carbon dioxide per megawatt hour of electricity.

California’s new rules may not prevent the construction of dozens of new Western coal-fired plants that are in the planning stages. But those plants would have to lower their emissions in order to sell power to California.

The energy industry is pinning its hopes on developing a technology that would pipe carbon dioxide and other gases into underground repositories. But the feasibility of this technology and its environmental effects have not been fully determined.

If other states adopt California’s approach, it will make renewable energy more competitive with cheap coal. On May 3, Washington Gov. Christine Gregoire signed a law modeled on Perata’s legislation. “California is telling Wall Street and Main Street that it is time to switch sides and invest in clean energy exclusively,” said Bernadette del Chiaro, director of clean energy issues for Environment California.

But the DWP, she says, has a long way to go. “Los Angeles is one of the sunniest cities in the world, but it remains in the dark ages, with the bulk of its electricity coming from coal. Its solar program remains underfunded, understaffed and poorly designed. But the potential is there — the sunshine, the wind, tidal and geothermal power nearby. LADWP could become the nation’s premier green utility.”