Utah facing critical energy crossroads

By Joseph A. Cannon
Deseret Morning News
Published: Sunday, Jan. 20, 2008 9:27 a.m. MST
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On this eve of the opening of the state Legislature, Utahns are at an important crossroads with respect to energy and the environment. Though prosaic, the choices or nonchoices we make now regarding energy, particularly the generation and distribution of electricity, will have enormous and possibly adverse consequences on our environment and our economy for decades.

Many fear the potential damaging effects of global warming. Many also fear the potentially irrevocable damage that could be inflicted on our economy if we make wrong decisions.

Lost in this dichotomy of the economy versus environmental protection is an understanding of the basic facts of energy supply, demand and the potential sources and costs needed to meet increasing demand.

Today's column discusses electricity demand, supply and cost, and the state's largest supplier of electrical energy, Rocky Mountain Power.

Periodically, public utilities are required to produce Integrated Resource Plans. These IRPs give consumers a fascinating insight into how utilities plan for the future. From Rocky Mountain Power's IRP, we learn that it currently produces 9,000 megawatts of electricity. Of greater interest is that to meet projected demand growth, Rocky Mountain Power will need to generate up to an additional 3,500 MW by 2016, a mere heartbeat away in the context of energy development. This forecast assumes a lower energy growth rate for the next 10 years than the previous 10 years. It also assumes a slightly lower population growth rate than has been the case in the past. It is difficult to project demand, particularly at a time when individual use of information technology is increasing in unpredictable ways. Think iPods, multifunctional cell phones, not to mention the hoped-for possibility of electric cars.

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So how will Rocky Mountain Power meet this 3,500 MW shortfall? It plans to produce more electricity using natural gas and also purchase power from other sources outside its system. It plans to increase its focus on energy efficiency, but most importantly, it expects two-thirds of the new requirements to be met by the use of renewable resources, particularly wind power. There is no consideration in this plan for additional coal-fired generation or nuclear generation. Notably, this plan does not reflect any additional costs for coal-fired generation reductions that may be a consequence of Gov. Jon Huntsman Jr.'s commitment to "develop state goals to reduce greenhouse gas emissions as part of a regional initiative to reduce (such) emissions by 15 percent by 2020." A bigger question for consumers, however, is how much will it cost us to meet this new electricity demand? The short answer is "more." Today, Rocky Mountain Power's average cost for generation is 3.5 cents per kilowatt-hour. Overall, Utah enjoys an enormous advantage when it comes to paying for electricity. California rate payers, on average, pay two and a half times what Utahns pay. But there is no scenario that does not increase the cost of electricity in Utah. Compared with the existing generation cost, a new coal-fired plant would cost 6 cents per kilowatt-hour. Wind power would cost about 7 cents, nuclear power about 7.5 cents. Natural gas generation would cost nearly 10 cents and solar power 18.5 cents. None of these costs take into account the reliability of these energy sources. For example, it takes roughly 4 installed megawatts of wind power to offset 1 megawatt of coal-fired generation.

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Recent comments

I seldom agree with Joe Cannon, especially when illegal immigration...

Stewart | Jan. 20, 2008 at 11:06 p.m.

Paul,

Natural gas releases only half the CO2 that coal releases...

jumpin | Jan. 20, 2008 at 6:04 p.m.

I applaud Mr. Cannon and the State of Utah for planning for future...

Sensible Scientist | Jan. 20, 2008 at 5:41 p.m.