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Utility asks Olympia to Put Off Review of Proposed Power Plant by Staff The Oregonian, May 13, 2007

Kalama - The state's new greenhouse gas law will affect the $1.5 billion facility

OLYMPIA -- Energy Northwest has asked the state of Washington to delay its permitting review of a proposed $1.5 billion power plant in Kalama after passage of a new climate change bill.

Gov. Chris Gregoire signed the bill into law, barring Washington utilities from signing long-term contracts with coal-fired power plants that produce excessive greenhouse gases.

Greenhouse gases, including carbon dioxide, methane and other gases, essentially trap energy from the sun, which warms the Earth's surface and lower atmosphere. Many scientists say human activity that increases those gases contributes to global warming.

Energy Northwest, a public power consortium based in Richland, Wash., asked the state Energy Facility Site Evaluation Council in a letter to delay its permitting process. The consortium said it wants to wait and see how regulators plan to limit heat-trapping gases.

"We don't mean to signal in any way we're walking away from the project," Energy Northwest spokesman Brad Peck said. "We're as committed to this project as the day it started."

The new law directs state and federal agencies, electric utilities and "public interest representatives" to write regulations limiting emissions such as carbon dioxide. The state must adopt the rules by June 30, 2008.

Energy Northwest urged state regulators to try to adopt the rules by midsummer so it can decide whether to forge ahead or abandon its proposed 680-megawatt coal gasification plant. The project would use coal or petcoke, the waste product from oil refineries, that would be turned into a gas to be burned to generate power. The plant could also burn natural gas.

The new law allowed projects like the proposed plant five years to "sequester" carbon dioxide emissions underground. Otherwise, emissions would have to be offset through drastic measures, such as buying a dirty power plant and shutting it down.

Energy Northwest has participated in a study to inject emissions into basalt, which is common in the region. But the utility said it isn't sure five years will be enough time to determine the feasibility of that technique.

Moreover, either option for curbing greenhouse gas emissions could significantly increase the cost of power from the project. Energy Northwest wants to know how the law will be implemented before it takes the project to potential customers for financial commitments.

Given the uncertainty surrounding implementation of the law and the time required to build major power generation plants, "we must immediately begin looking at alternative options for regional power supplies," Energy Northwest Vice President Jack Baker wrote in the letter.

Environmentalists say the delay request could be the beginning of the end for the project.

"It's a prudent move on their part," said Marc Krasnowsky, a spokesman for the Northwest Energy Coalition. "I think they've concluded their public utility customers are likely to be spending a lot more for the power from the proposed plant than they had expected to."

Energy Northwest, which includes 20 public utilities and municipalities, operates a nuclear power plant near Richland and a hydropower project, as well as wind, solar and biomass power projects.

The state energy council is in the midst of a year-plus review of the application for the proposed plant. The council then makes a recommendation to the governor, who has the final say on whether large power plants are approved.