California Muni Says No to Coal Power

Silicon Valley Power (SVP)—Santa Clara, Calif.’s municipal electric utility—has decided to stop importing out-of-state electricity from the San Juan Generating Station, completely eliminating coal from its power supply.

San Juan is a 1,646-MW four-unit coal-fired power plant located in Waterflow, N.M., and operated by PNM. SVP owns an interest in San Juan through its participation in the M-S-R Public Power Agency (M-S-R PPA).

The agency was created in 1980, through a joint Exercise of Powers Agreement among Modesto Irrigation District, the City of Santa Clara (doing business as SVP), and the City of Redding. M-S-R PPA purchased a 28.8% ownership of San Juan Unit 4 in 1983. SVP’s share is about 10% of the unit (roughly 51 MW).

About 36% of SVP’s power comes from state-mandated renewable resources, exceeding California’s current renewable energy requirements. Moreover, it claims that greater than 50% of its electricity supply is carbon-free.

Although San Juan only provides about 10% of SVP’s electricity, the power accounts for around 50% of the utility’s carbon emissions. SVP said it began confidential negotiations four years ago to pull out of the San Juan contract due to the pollution emissions, liabilities associated with upgrading the plant to reduce emissions, and escalating costs associated with the San Juan facility. The Federal Energy Regulatory Commission issued its final approval of the move on December 30. The change will become effective on December 31, 2017.

San Juan plans to retire Units 2 and 3 at the station in 2017. POWER asked SVP and M-S-R PPA if the agreement was made in conjunction with the closings and what company would take over SVP’s share of Unit 4, but neither responded before this story went to press. It is unclear whether Modesto and/or Redding will also end electricity imports from San Juan; neither utility issued press releases regarding contract changes.

In recent years, San Juan has installed several new technologies to reduce plant emissions of mercury, NOx, particulate matter, and SO2. All four units were upgraded with activated carbon injection systems, new state-of-the-art burners, overfire air systems, and new baghouses, and a new additive is being used in the plant’s existing limestone slurry spray to improve SO2 removal in the scrubbers. But that was not enough to sway SVP’s decision to exit.

“Silicon Valley Power has been committed to eliminating coal as a source of electricity for our customers and turned toward a combination of new renewable resources and the ultramodern Lodi Energy Center to replace the 51 megawatts of power from San Juan,” said Larry Owens, manager of customer services for SVP.

SVP claims its rates are among the lowest in the state. It owns a 25% share in the 280-MW Lodi power plant (a POWER Top Plant Award winner) and began receiving power from the facility in 2012. It has a variety of other generation resources spread throughout California and two wind projects in Washington State.

“We will be coal-free two years earlier than the 2020 deadline called for in the City of Santa Clara’s Climate Action Plan, effectively reducing the carbon footprint of our power by over 50 percent,” Owens said.

Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)