Alternatives

In addition to the outstanding water and coal issues that make an evaluation today as to the efficacy and efficiency of continuing with Mohave as a coal-burning facility impossible, there are also unresolved issues concerning (1) the need for the power, (2) time and type of need and (3) California's emphasis on reducing demand through energy efficiency and demand response programs, and meeting need through clean and/or renewable power.

California's Energy Action Plan²⁷ (EAP) sets forth a number of goals for California, including encouraging utilities to have a mixed portfolio of ownership interests, fuel diversity, and contract terms. Mohave, as a utility owned generation coal-burning facility gives Edison one more long-term, stable power source designed to serve baseload, and provides needed fuel diversity. It is true that Edison, and California, are very dependent on natural gas to produce energy. As so many parties commented, in the face of the volatile supply and price of natural gas, coal presents a cost-efficient alternative. Even though the exact price of coal is not known today, parties were in agreement that based on historical data, coal is a reliable and affordable source of power.

However, Mohave also produces a baseload supply of power, producing power 7/24. The question arises that if demand for electricity is reduced by either California's emphasis on energy efficiency and demand reduction programs, or because there are significant changes in Edison's customer base due to core/non-core, community aggregation, municipalization or direct access, will Edison still need 855 MW of power? Mohave cannot run efficiently as a "peaking" unit. If by the time Mohave comes back on line in 2009/2010, if Edison only needs "peaking" power, will Mohave be producing so much extra power as to vitiate any savings from the coal production?

Unfortunately, because of the absence of critical information on the costs of water and coal for a continued Mohave, neither the Commission, nor the parties, can make an informed determination as to the efficiencies of Mohave vis-à-vis any alternatives. Because Mohave is a baseload plant, the most logical comparison is with a new CCGT facility. While parties opined as to which would be more cost efficient, there was not enough clear information to make an accurate comparison. For example, although a new gas-fired plant would burn cleaner than a coal-fired facility, its economic efficacy depends significantly on the cost of gas-a factor that cannot be known exactly today. So what a CCGT facility might save on emissions costs, might be lost to the vagaries of the gas market.

Also because not all of the critical costs for a continued Mohave are known today, Mohave could not be compared with other possible alternatives, such as renewable sources. While WEC presented a proposal for solar on the reservation, WEC's cost estimates were not sufficient for comparison-even if Mohave's cost estimates were complete.

NRDC proposed a mixed portfolio of alternatives to replace Edison's share of load from Mohave: reduce demand by 1/3 through energy efficiency, obtain 1/3 of the power from renewables and get the remaining 1/3 from an IGCC. While this proposal comports with the EAP in loading energy efficiency and emphasizes renewables, again, we are unable to adequately compare the proposal with Mohave due to the inchoateness of Mohave's cost estimates and the lack of sufficient specificity of NRDC's recommendations.