Mohave Coal-Fired Plant Set to Shut Down Next Year

6 September 2005
Power Market Today

At least two key milestones are upcoming this month in the checkered recent history of the coal-fired 1,580 MW Mohave Generating Plant at Laughlin, NV, but they are not expected to keep the giant power plant operating after Dec. 31, an environmentally imposed deadline it has faced for six years. A stakeholders meeting will be held early in the month among the jointly owned plant's partners, headed by its (56%) majority owner/operator, Southern California Edison Co.

The two milestones later in the month are: (1) a revision of the University of Nevada study on the Mohave plant's economic impact to the surrounding adjacent Nevada and Arizona territory, and (2) a California Public Utilities Commission-mandated study of alternative site uses for producing renewable energy at either the power plant site or the coal mine location. A draft of the CPUC-ordered study is due by Sept. 30.

A stakeholders' meeting will be held Sept. 9 in Phoenix, according to a SoCal Edison utility spokesperson in Rosemead, CA. Besides Edison and its plant partners --Salt River Project (SRP) (20%), Nevada Power Co.(14%) and Los Angeles Department of Water and Power (LADWP) (10%) -- environmental and consumer groups will be represented by the Natural Resources Defense Council (NRDC), Grand Canyon Trust, unions, the CPUC Office of Ratepayer Advocates (ORA), and San Francisco-based The Utility Reform Network (TURN).

The March 2002 economic impact analysis by the University of Nevada professors concluded that any decision to shut down Mohave would put many local people out of work and have a "significant impact" on local economies in southern Nevada and northern Arizona, along with the states'
and the Native American tribal governments.

An overriding conclusion of the earlier study by George Borden and Robert Fletcher was that for economic activity, personal income, and jobs, the local community of Laughlin has depended heavily on the Mohave power plant for more than 30 years. The plant three years ago accounted for some $364 million in annual economic activity at Laughlin, Bullhead City and other surrounding areas, according to the study.

"The local economies have become dependent upon the Mohave plant to provide high-paying jobs that generate additional spending in the area, which in turn creates additional personal income," said the 2002 report.
"If Mohave were to cease operations, local economic developers would need to assess how best to replace the lost jobs and associated personal income."

It is no longer a question of "if," as Edison and the other owners are preparing for a shutdown the end of this year even as negotiations for new coal and water contracts that have been bogged down for years continue.

SoCal Edison last March called for the alternative uses study at the same time some stakeholders were trying to appeal to environmental groups and/or regulators to extend the deadline for having some $800 million of environmental upgrades completed at the plant. (see Power Market Today, March 16 and March 29).

A clean-coal gasification and power plant operation, as well as wind and solar developments, were among the alternatives the CPUC asked that the study analyze. The first draft of that report is expected by month-end, according to an Edison utility spokesperson.

Edison retained Chicago-based Sargent & Lundy Consulting Group (S&L) for what it called the "Mohave Alternatives/Complements Study (MACS)," and it in turn employed a subcontracting economic consulting firm, Synapse Energy Economics, to deal with the energy efficiency, transmission, socioeconomic, economic and market analysis issues tied to each alternative.

Edison reviewed S&L's response to its request-for-proposals (RFP), and found the firm "highly qualified" to conduct the study, according to Edison Senior Attorney Sumner Koch. S&L depended on a group of designated resource people from each of the Mohave stakeholders in compiling the report that will soon be made public in draft form.

CPUC President Michael Peevey, as the assigned commissioner, an administrative law judge, Carol Brown, and the regulatory commission's energy division director, Sean Gallagher, have been part of the stakeholder review process.