Calif. greenhouse gas standard could doom 30 coal-fired plants

Washington (Platts)--19May2006

A bill by California's Senate leader to establish a greenhouse gas emissions
standard for power purchases is facing tough questions from legislative
analysts who warn the measure could drive up electricity costs and limit
supplies.

Authored by Senate President Pro Tem Don Perata, S.B. 1368 would prohibit
long-term contracts for baseload generation unless they meet a GHG standard
that would be no dirtier than emissions from a combined-cycle natural gas
power plant.

If enacted, the measure could have significant consequences for the state's
energy picture as 30 coal-fired plants have been proposed in the West,
according to the California Public Utilities Commission.

Depending on the allowable level of GHG emissions, "this bill could render
many existing conventional natural gas, cogeneration, biogas and biomass
plants, as well as coal plants, ineligible for contracts longer than three
years," unless they reduce emissions, according to analysis by the Energy
Utilities and Communications Committee.

According to analysis by the Senate Appropriations Committee, the bill could
push up electricity rates by limiting the number of suppliers able to provide
power.

Perata's bill is in the Senate Appropriations "suspense file," meaning it will
be taken up along with other bills deemed to have a significant fiscal impact.
The Senate leader's bill must pass the Appropriations Committee by the end of
next week.

Perata's staff did not respond to questions on S.B. 1368 by press time.

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