Utah’s tug-of-war between coal and clean energy
(Utah News Dispatch) As the federal government is incentivizing states to transition to cleaner sources of energy through unprecedented funding, Utah’s Republican supermajority legislature is hesitant to accept the cash, fearing emissions regulations may be “overreaching.”
Energy is a priority in the 2024 session, but protecting existing energy sources may prove a barrier to those national efforts.
Though there’s wide concern over quickly shutting down coal plants in the state and not being able to meet energy demand, some lawmakers and advocates are trying to find a way to make Utah a viable clean energy pioneer.
Reliability and affordability concerns
In the debate over energy futures, a bill being considered in the legislature this session would restrict the use of federal incentives to fund new resources that would lead to the “early retirement” of an electrical generation facility.
Rep. Colin Jack, R-St. George — who is also chief operating officer at Dixie Power, an electric cooperative serving customers in southern Utah and northern Arizona — is sponsoring HB191, which would ban the closure of electricity plants in favor of other projects if they “create a material adverse effect on the provision of affordable, reliable, dispatchable, and secure electricity,” increase rates, or create a shortage of electricity services.
“What we’re seeing all across the United States is a diminished capacity to serve electrical loads.” Jack said. “And that’s been caused by utilities or state policy-driven decisions by utilities to prematurely demolish facilities that have a high capacity factor, and have very good economics and replace it with facilities that don’t.”
Under the bill, any older existing generators should only be replaced with others of equal or greater capacity. And, according to Jack, there is yet to be a technology that’s able to replace the existing coal, natural gas and nuclear infrastructure in terms of reliability and affordability.
“The industry is working on a lot of other solutions, trying to innovate and find what’s going to be the next great thing,” he said. “But it hasn’t yet been invented, or at least not perfected to a utility scale.”
Jack said he worries about exacerbating the unreliability of electricity not only in Utah, but in the region, since some western states’ systems are interconnected.
But, for Jack, the question of rejecting or accepting federal money is “irrelevant” in the reliability and affordability discussion.
“The federal government can incentivize lots of bad ideas which would be bad for the state of Utah and bad for the entire western region,” he said. “So what we’re promoting is that we keep reliable and affordable electricity in spite of any other tertiary considerations.”
To sacrifice energy security, Jack said, would be “immoral and unconscionable.”
For Sen. Nate Blouin, D-Salt Lake City, on the other hand, rejecting federal money to keep coal plants operating “is not economically sensible, and it is certainly not environmentally sensible either,” he said. “So that is something I’m really worried about.”
In pursuit of clean energy
Utah has already started to jump on some technologies to develop its geothermal energy capacity, for example. The University of Utah in partnership with the Department of Energy has a laboratory in Milford “to develop, test and optimize the methods and techniques required to create, sustain and monitor enhanced geothermal systems resources.”
Geothermal developers want to tap that effort and the resources in the area to build big projects, Blouin said. That’s why he’s running “Geothermal Energy Production Amendments,” an unreleased bill that would enable them to do so.
The goal, he said, is also to bring more jobs to the state and incentivize programs for rural communities that may struggle as other energy sources are going through a transition.
“That bill is going to have study pieces trying to get stakeholders together and look at this through an economic development lens rather than just specifically an energy lens,” Blouin said.
The legislation would have a “multifaceted” approach, including studies and searching for options of where and how geothermal energy could work on the grid. It would also incorporate a job creation tax credit.
“As a company that’s developing this stuff is creating jobs, they can get credits that reduce their costs and kind of make the energy cheaper,” Blouin said. “So it gives them more of an incentive to build.”
He highlighted that what draws developers to geothermal is that it is a form of clean energy that runs 24/7 and is as reliable as a coal or nuclear plant. The downside, he said, is that it is specific to places that produce heat underneath the ground.
That also means that eyes are following development opportunities to central Utah, where these resources exist.
Blouin said he has seen bipartisan support on clean energy incentives as projects, such as a small modular reactor that was in the works with Utah Associated Municipal Power Systems, fall through because of economic concerns.
Another incentive is in HB124, a bill sponsored by Rep. Carl R. Albrecht, R-Richfield, which, among other actions, would expand the High Cost Infrastructure Development Tax Credit “to include certain geothermal energy projects, hydroelectric energy storage systems, and nuclear power generation systems.”
Blouin argued that Utah needs a plan to expand its clean energy use and protect communities whose livelihoods rely on nonrenewable energy sources like coal with federal funds, which could pay for education programs and job creation.
“Rather than keep trying to cling on to that and do everything we can to live in the past,” he said, “I’d rather see us looking towards the future with some of these new technologies that can do a lot of the same things without the emissions that we had from coal and try to do as much as we can to make sure that those communities are still able to thrive.”
Enthusiasm for federal incentives
Max Becker, senior associate at Utah Clean Energy who specializes in federal climate opportunities, said that in a state mostly run by coal and liquefied natural gas, there are great opportunities to expand its clean energy infrastructure.
That includes a federal grant that the Utah Office of Energy Development applied for that would pay for solar programs for low-income communities, Becker said.
It’s an “unprecedented” time for Utah to reach emissions reduction goals, Becker said, as the federal government signed the largest investment in clean energy and climate action in the country, the Inflation Reduction Act, which provides a 30% tax credit for certain investments in wind, solar, energy storage and other renewable energy projects.
The program also includes an additional incentive for communities who work and live in areas where energy is a substantial industry; a “bonus credit of up to 10 percentage points for qualifying clean energy investments in energy communities.”
Under the Inflation Reduction Act umbrella, the Internal Revenue Service also rolled out Elective Pay, a program allowing government entities, churches, nonprofits and those who normally wouldn’t file tax returns to be able to get paid if they make clean energy investments.
“The tax credits alone are such a huge boost,” Becker said. “And we hope that those incentives are driving our utilities, our business leaders, our state (and) local officials to push for clean energy incentives that will help clean our air and make sure that our water stays clean.”