Western governors OK energy plan including coal plant incentives

Western governors OK energy plan including coal plant incentives

New York (Platts)--13Jun2006

Western governors adopted proposals Sunday to allow their states to install at
least 30,000 MW of clean power generation by 2015 and increase overall energy
efficiency 20% by 2020.

Coal-fired plants are included under certain circumstances.

The governors also committed to ensuring there will be adequate electricity
transmission for the next 25 years.

The 18 governors signed off on the goals, proposed in 2004 by California
Governor Arnold Schwarzenegger and New Mexico Governor Bill Richardson, at the
Western Governors' Association annual meeting in Sedona, Arizona.

To meet the clean energy goal, the governors agreed to use renewable sources,
including hydropower; and natural gas and coal gasification plants; and
combined heat and power technology. New nuclear reactors are not part of the
plan.

The Advanced Coal Task Force, a part of the report to the governors,
recommended state-level incentives, such as expedited siting and cost
recovery, for certain advanced coal technologies be divided into two groups.
The first, to receive the highest priority for state incentives, would
encourage building four to five generating plants, totaling 2,000 MW, that
burn coal and capture and sequester 60% of carbon dioxide emissions.

The second to gain incentives would be for plants totaling 3,000 MW that use
technologies that have not been commercially developed in the West "that most
cost-effectively and rapidly move toward zero emissions and carbon capture and
sequestration." They include gasification, ultra-supercritical coal and
oxy-combustion.

The governors asked Congress to expand a number of tax incentives that would
support their goals, including a 10-year extension of the popular 1.8?/kWh
renewable production credit.

They also pressed Washington to help them develop biofuels and coal-to-liquids
as gasoline alternatives. "We need the federal government to step up to the
plate to meet this [energy independence] challenge or get out of the way,"
Montana Governor Brian Schweitzer said.

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