Editors Note: This article was originally published in the Feb. 28, 2024 issue of the Chronicle Progress. Some information may be outdated.
Effort to control future of IPP coal units advances after fifth substitute passes Senate
Legislation outlining a process to keep Intermountain Power’s coal units open past their scheduled decommissioning sailed through a House committee last week.
A fifth substitute of SB161 was passed out of the full Utah Senate on Feb. 20 by a vote of 18 to 5, with six senators absent or not voting.
The bill then landed in the state House’s Public Utilities, Energy, and Technology Committee last Thursday, where it was the only item on the committee’s agenda.
Sen. Derrin Owens, District 27 Republican, introduced the bill, saying it wasn’t his preferred version, but would continue to champion it nonetheless.
“It’s a bill that creates a process for the potential preservation and sale of an 1,800 megawatt coal-fired power plant, Intermountain Power Plant out near Delta,” he told committee members by way of a brief description. “It’s vital for preserving Utah’s coal industry and energy independence, especially in the short term as we are transitioning into other fuel sources.”
The legislation essentially charts a pathway for the state to either take over or sell the existing coal units, including studying a path toward re-permitting the facility with state and federal environmental authorities.
“The intent is not to disrupt construction or anything going forward with the new natural gas and hydrogen plant that’s called IPP Renewed,” Owens said.
Last year the legislature commissioned a study to determine whether a path existed to continue operations at IPP even after its scheduled decommissioning. This would require some sort of transitional air quality permit and possibly hundreds of millions of dollars in environmental upgrades to comply with federal environmental regulations.
“Hopefully that can be a win-win for our state and energy security,” the senator said.
Owens said he’s heard interest in the plant expressed by multiple business sectors, including data centers and industrial manufacturers, electric vehicle producers and a battery maker.
“It’s not perfect. I don’t think there is a perfect bill on this space because there’s so many varying factors and challenges,” Owens said.
When committee members were given chance to ask questions, only two sought more information. Chair Carl Albrecht, District 70 Republican, asked Owens to talk about the legislative fiscal note attached to his bill, which shows the legislation could cost the state as much as $2.4 million over three years if passed. Most of those funds would be spent by the state’s environmental agencies and on outside consultants.
Owens said he originally thought only a million dollars would be spent.
Rep. Angela Romero, a District 25 Democrat, asked Owens about IPP Renewed’s agreement with the Environmental Protection Agency to shutter its coal units in July 2025— the agreement essentially promised IPP would decommission the units by a certain date in order to avoid costly, and required, upgrades to come into federal compliance.
Owens said the agreement is part of IPP Renewed’s permit, but isn’t a law that can be enforced on the state. He said since IPP is a political subdivision of the state, the state has control over its future.
Owens admitted, however, that if there is no path to obtaining some new transitional permit for the older coal units, then the state would likely not move forward.
During public comment, most spoke against the bill.
Stan Holmes, outreach coordinator for Ucair, the Utah Clean Air Partnership, spoke against it, saying he was concerned about the impact to taxpayers from keeping the units open as well as the potential negative effects on IPP Renewed.
Allen Johnson, power director for the City of Bountiful, who also sits on Intermountain Power Agency’s board of directors, said it was important that legislators allow Utah municipalities to continue to have a voice in the process moving forward since many Utah cities and towns essentially own IPP.
“As the ultimate owners of IPP, Utah municipalities need to be involved in the process,” he told the committee.
Maria Archibald, a member of Sierra Club’s Utah chapter, spoke against the bill, citing IPP’s coal plant as the state’s number one air polluter. She said the activist group opposes spending taxpayer funds in an effort to circumvent existing air quality rules.
“Even under a strict economic analysis, this bill fails to pass the test. Just yesterday this committee favorably recommended a resolution affirming Utah’s ‘unwavering commitment to the principles of freedom, democracy and the free market.’ Yet, this bill would facilitate a government takeover of private assets,” she said. “The State of Utah is not a utility and should not be acquiring power generation units.”
She added that state taxpayers will end up footing the bill should SB161’s plan fail.
Cameron Cowan, IPA’s general manager, said he was happy to continue working on the legislation with lawmakers. He said some important changes were made in the fifth substitute that were supported by IPA. One of those was the option to keep one coal unit operational if all federal and state mandates were met. He said he was pleased that the fifth substitute also codified the state’s willingness to not interfere with the development of IPP Renewed.
After public comment, House committee members voted 9 to 1, with one member absent, to send the bill to the floor of the House, where passage seems all but imminent.
Two other bills introduced this legislative session—SB114 and SB120— by Sen. Scott Sandall, District 1 Republican, have made no progress in several weeks, according to the legislature’s website.
Those bills targeted IPA’s governance structure and future ability to sell municipal bonds. One source close to the legislature told the Chronicle Progress recently they believed these bills were placeholders, cudgels in fact, to be used if IPA fought too hard against SB161 and the state’s plan for the coal units.
