Los Angeles divests 477-MW share of Navajo coal plant in Arizona

The Los Angeles Department of Water and Power (LADWP) said July 7 that it will reduce its coal-generated power by 25% with the completed divestiture from the Navajo Generating Station, which was finalized on July 1 of this year.

The milestone is a major step toward eliminating coal from the city’s power portfolio by 2025. LADWP is also still working to exit from the coal-fired Intermountain power plant in Utah, with various parties with interests in the 1,800-MW plant working to build a replacement gas-fired plant at the site.

The Navajo divestment is the result of an agreement with the Salt River Project (SRP) to sell the LADWP’s 21% share in the coal-fired Navajo Generating Station outside of Page, Arizona. The sale will reduce LADWP’s greenhouse gas emissions by 5.39 million metric tons over the next three and a half years. 

“The crisis of climate change demands that we take action now to end our reliance on coal,” said Los Angeles Mayor Eric Garcetti. “Divesting in the Navajo Generating Station is a major step toward reducing greenhouse gas emissions and securing L.A.’s clean energy future.”

Under the agreement with SRP, LADWP stopped receiving its former 477-MW share of coal power from Navajo on July 1. The power will instead come from renewable resources and energy efficiency programs, backed by natural gas. The backup natural gas power resource is located outside of the Los Angeles basin and is unaffiliated with the damaged Aliso Canyon Natural Gas Storage Facility. With the completion of the Navajo transaction, LADWP will reduce coal generated power from 40% to 30% of the city’s energy portfolio.

“This is a huge step forward toward achieving a clean energy future for Los Angeles,” LADWP General Manager Marcie L. Edwards said. “After years of negotiations and extensive coordination with all project participants, we have reached a milestone – the close to one more chapter in transforming the City’s Energy portfolio.”

LADWP will receive about $15 million at the close of the transaction and 158 MW of Eldorado transmission rights which will provide import capability for additional renewable resources.

Early elimination of coal power will ensure compliance with Senate Bill 1368 and the Global Warming Solutions Act of 2006 (Assembly Bill 32), which created the state’s Cap and Trade Program to reduce greenhouse gas emissions.

Navajo is a 2,250-MW plant with three 750-MW units. It burns low-sulfur bituminous coal from Peabody Western Coal’s Kayenta mine, located 78 miles to the southeast. Coal is transported via a dedicated electric train.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.