Los Angeles DWP Commissioners vote to sell holdings in coal-fired Navajo Generating Plant

Water and Power Commissioners in Los Angeles have approved a sale of the city’s interests in the coal-fired Navajo Generating Station in Arizona. The vote will cut LA’s coal interests by a quarter, and represents a significant step towards a goal of total divestment from coal set by former Mayor Antonio Villaraigosa in 2013.

With shifts in the energy market, says the LA Department of Water and Power’s Mike Webster, selling off interests in the Navajo plant also could save Angelenos money.

Coal kept LA’s electricity rates down for years, which is how it came to represent 40 percent of the city’s energy portfolio. But heavy carbon pollution associated with the heaviest of fossil fuels prompted protests from the Sierra Club’s Beyond Coal campaign, as well as Greenpeace. Federal environmental officials under the Obama administration tightened regulations.

Most interestingly, the energy market has changed in the last couple of years. Efficiency programs have reduced demand – so utilities like DWP don’t need to buy as much energy. And the costs for other sources of energy, including natural gas, have dropped lower.

Selling out of the Navajo plant has become less costly to ratepayers than keeping LA’s interests in it, says DWP’s Mike Webster.

“The coal costs are going up. The operations and maintenance are also going up,” he says. “By us divesting now, it actually reduces the impact on ratepayers.”

Webster says 477 megawatts of coal energy that come down transmission lines to light up LA soon will be replaced by an even larger amount of more solar and geothermal energy.

Keeping interests in the Western and El Dorado transmission lines is a calculated investment to keep close to emerging renewable projects. “It opens up more southwest energy that can be delivered to our system. Also it opens up geothermal energy that can be delivered to our system,” Webster says. “Strategically, it’s really important to stay connected in the desert southwest.”

DWP still has the majority stake in Utah’s Intermountain Power Plant.  Webster says plans to divest from that plant are ahead of schedule – with more details about a sale of those interests expected next month.

L.A. Mayor Eric Garcetti included Villaraigosa's pledge in his recently released sustainability plan for the city.

“This is an important step toward cleaner air, addressing climate change, and creating a clean energy future for Los Angeles,” Garcetti said in a statement. “The sale of the Navajo Generating Station is just the latest example of LA’s national leadership in carbon reduction and climate change action, taking us one step closer to my goal of getting LA off coal by 2025.”