Dec 5 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Eugene Tong Daily News, Los Angeles

Under the state's stringent goal to reduce carbon emissions, cities including Burbank and Glendale are trying to decide how to handle their stakes in a Utah coal power plant that provides up to half of their energy needs.

Walking away could mean selling short a $3.2 billion investment that could pay back millions in low-cost power in 15 years, at the cost of roughly 15 million tons in carbon-dioxide emissions per year.

At a coordinating committee last month, the plant's California clients agreed to set aside funds to study how CO2 reduction technology can be applied at the Intermountain Power Plant in Delta, Utah.

Ned Bassin of Glendale Water and Power said the utility receives 20 percent of its electricity from the plant.

"Until we turn it down, I think we have significant influence and a stake in IPP," Bassin said. "... IPP is one of the cleaner coal fire power plants."

The 1,800-megawatt plant operated by 23 Utah cities under the Intermountain Power Agency was built with $3.2 billion in loans shouldered by six California cities.

In exchange, Los Angeles, Burbank, Glendale, Anaheim, Pasadena and Riverside receive some 75 percent of its electricity until 2027.

But legislation signed by Gov. Arnold Schwarzenegger in September to put a 25 percent dent in greenhouse-gas emissions by 2020 -- including from out-of-state power suppliers -- has complicated the deal.

It came to a head in recent months when IPA asked its California clients to renew bytheir contracts to 2044. The cities, under pressure from the Sierra Club and other environmental groups, turned down the offer.

Burbank was the exception, and the episode was an embarrassment for the City Council and Mayor Todd Campbell, a committed environmentalist.

At a meeting today, the council will put the contract on hold after the power agency agreed to extend the signing deadline until 2023 -- the loans will be paid off in about 2020.

Campbell, a former policy analyst with the Natural Resources Defense Council, said the city had signed the contract to retain transmission rights that could apply toward "green" energy projects -- including redeveloping the coal plant into something that's "environmentally responsible."

"We do not want to remain on coal," he said. "We want to retain the assets the city of Burbank purchased. If we don't have a contract, we lose our rights to resources down the line. To do that would be a mistake."

It's a model in use by Glendale, which uses the same transmission lines to carry power purchased from a Wyoming wind farm, Bassin said.

Reed Searle, Intermountain's general manager, said the plant's Utah owners will try to work with its West Coast partners to cut CO2 emissions.

"It's not easy for us if you can't renew your contracts," he said.