By July 2025, the turbines in Utah’s largest power plant will cease spinning after 39 years of operation and the two coal-fired units will be quickly dismantled and hauled away.
But a move is now afoot to save the 1,900-megawatt generating station outside Delta through a $5 billion program of upgrades, repurposing it to power data centers proposed nearby in Millard County.
The plant’s owner, Intermountain Power Agency (IPA) however, says a failure to demolish the plant on schedule not only jeopardizes its continued operation but also IPA’s ongoing plans to build a replacement plant run on hydrogen and natural gas.
Those warnings are not deterring some Utah lawmakers who are throwing their support behind the purchase proposal advanced by Orem-based entrepreneur Lane Livingston, who heads a new company called FiberNet Mercury Delta.
“Most of the concerns can be addressed, either with time, money or study,” Livingston said at a Feb. 10 meeting of an oversight committee. “The big picture is there are thousands of jobs in Utah at stake. There’s millions and millions of dollars of tax revenue at stake, there are the rural communities of Utah at stake. And if we let this go, we’re letting all those folks down.”
FiberNet has partnered with another startup called Enchant Energy, which would invest $5 billion to retrofit the plant with carbon capture and other emission-control equipment with the goal of reducing its environmental impacts and addressing issues raised by the Environmental Protection Agency. The first phase of the data center project would require 500 megawatts of generating capacity, which the coal-fired Intermountain Power Project, or IPP, could easily provide, according to Livingston.
“If we lose this opportunity in Utah, we are not going to get it back,” he said. “We believe that that plan is good for rural Utah.”
To bolster Livingston’s proposal, Sen. Derrin Owens, R-Fountain Green, is co-sponsoring HB425, a bill that would give the Legislature greater influence over “material changes” proposed for Utah’s power plants and authorize the Utah Attorney General’s Office to sue the EPA if its regulations lead to premature plant closures.
“So the attempt is to say, ‘Let’s tap the brakes here for a minute before we dismantle probably the best, most efficient, amazing coal-fired unit, tap the brakes and not tear it down,’” Owens, whose district covers eastern Millard County and reaches into central Utah coal country, said Thursday at a legislative hearing. “I’m trying to have the EPA not run over our energy producers or put them in a position that harms the future of the state’s energy and our customers.”
On a party-line vote Friday, the Senate Natural Resources, Agriculture and Environment Committee advanced the bill, which has already cleared the House.
It’s not just lawmakers meddling in this arena.
Pursuant to a bill Owens sponsored last session, the so-called Project Entity Oversight Committee (PEOC) was established by the Utah Office of Energy Development to keep tabs on IPA, an independent political subdivision of Utah. Nearly all of its plant’s output goes to Southern California utilities, while about 3% remains in Utah, providing power to 23 cities.
In response to the demands of its California customers, IPA decided years ago to abandon coal even though there are years of potential life left in its Delta plant. That plan, known as IPP Renewed, features a new 840-megawatt generator that will be run on a mixture of natural gas and “green” hydrogen. Solar and wind farms will be tapped to generate the power needed to produce the hydrogen, which would be stored in underground caverns already developed near the plant, and then burned as needed to produce power.
Because the existing IPP burns 30% of the coal produced by Utah mines, the elimination of the coal-fired units has become controversial and friction keeps building as the retirement date approaches.
Utah lawmakers, especially those representing districts that produce fossil energy, are upset federal environmental regulations are forcing the closure of coal-fired plants across the nation in favor of solar and wind resources that are notorious for generating power intermittently.
“We’re creating a nationwide [power] shortage based on a fictitious renewable [energy] portfolio,” Rep. Carl Albrecht, R-Richfield, fumed at the recent PEOC meeting. “We’re running the economy of the U.S. into the ground because we don’t have reliable power. And you’re going to shut your plant down and we’re going to bring on a plant that has half the capacity.”
At the Feb. 10 meeting, the oversight committee brought IPA executives and Livingston’s team around the same table to hear their competing arguments for and against keeping the coal units.
IPA’s promise to demolish these units forestalled costly upgrades needed to comply with federal regulations regarding the management of ash waste, a hazardous substance known as “coal combustion residues,” or CCR, and of air emissions, according to IPA’s new general manager Cameron Cowan. In a resolution adopted in November, the IPA board rejected the FiberNet purchase offer, citing the various ways a sale would jeopardize power generation at the site.
“Each of those risks was identified as an independent basis for rejecting the proposal because of the impacts on the current operation to coal units or the renewal of an IPP to transition to generating electricity using natural gas and hydrogen,” Cowan told the oversight committee.
But Enchant Energy’s CEO Cindy Crane argued her company has the technical and financial capacity to retrofit the Delta plant in ways that would greatly diminish its environmental footprint. For starters, it plans to install equipment that would separate the carbon dioxide from its emission stream and pump the greenhouse gas into geological formations, a process called carbon capture and sequestration, or CCS. This system would cost between $3 and $3.5 billion to install and require large amounts of electricity to operate, Crane said, but it could be worth the investment because of incentives available to reduce greenhouse-gas emissions blamed for climate change.
“In this model that we have, by providing that as a service, it’s not a parasitic load to the power plant. It’s actually a paying customer. It actually purchases its power and steam from the generating company, like any other off-take customer,” said Crane, a former head of Utah’s largest utility Rocky Mountain Power. “The economic incentive about this technology has massively changed. And it’s driven by climate mitigation.”
Enchant would also install scrubbers to strip the remaining emissions of nitrogen oxides and rebuild its ash-storage system to meet new EPA standards.
Huge economic benefits would arise from saving the plant, worth about $866 million a year, Crane claimed. She says her plan would save 4,600 jobs and result in $375 million in tax revenue over 10 years that would otherwise not be realized.
“The best thing about it is that it cleans it up, but it keeps the tax base, the jobs, creates massive amounts, more jobs, construction jobs, and additional tax base gets added. In rural America, we’ve been closing power plants, because, frankly it’s just easier than to fight the battle,” Crane said. “So we close them, and the communities of rural America are ultimately paying the price for that.”
IPA executives and lawyers had an opposite take on the proposal. Even entertaining it as a possibility could jeopardize IPP’s continued ability to generate power, they argued.
The agency has already awarded contracts and began construction on the gas-fired plant based on studies that assumed the coal plant would be taken permanently offline, said Jon Christensen, project engineer for IPP Renewed. Reworking the design would set that project, already 10% complete, back at least two years.
“We’re expanding a switchyard. And we’re building a new converter station. Projects of that complexity take years to plan for,” he said. “They take a lot of system studies to make sure because the electric grid doesn’t like it if you disturb the electric grid.”
Additionally, the new project’s construction area goes right up against the west side of the existing plant, so there would be no space to install the emission-control equipment Enchant has proposed.
“We took the power lines from the existing coal units that run to the switchyard,” Christensen said. “So the coal units [will] have no connection to the switchyard anymore. There’s no way to get the power out of those units onto the grid.”
Another “insurmountable impediment” is raised by the vast amount of ash waste stored on site, according to attorney Ashley Peck. IPA’s impoundments currently contain more than 6 million cubic yards of CCR and are out of compliance with new federal regulations.
“The coal units are already operating on borrowed time. The only reason why we’re able to continue using those two coal units under the CCR rule is the decision to cease operation of coal-fired combustion by a date certain,” Peck said. “A decision to reverse course on that removes the only regulatory basis that we have to continue accepting waste into the impoundments.”
The EPA had initiated an enforcement action against the plant a few years ago, proposing an order to install emission scrubbers called selective catalytic reduction, which would have cost hundreds of millions, according to another IPA lawyer, Emily Schilling.
“The impending closure of those coal units is one of the reasons why EPA backed off,” she told the committee.
While it seems simple, keeping the coal-burning generators in place, the lawyers said, would invite a shut-down order from the EPA giving Intermountain Power only 135 days notice.
“It’s very difficult to negotiate with the EPA. That is not an agency we would want to bring into the conversation,” Schilling said. “It would be like poking the hibernating bear.”
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