Friday, March 31, 2006

Sempra to nix plan for Jerome power plant

Development rights offered for sale to another energy company

Express Staff Writer

A San Diego-based power company will no longer pursue plans for a coal-fired power plant in south-central Idaho.

In a letter submitted to Idaho Gov. Dirk Kempthorne, Sempra Generation announced that it plans to sell its development rights for Idaho Valley Energy, a subsidiary of the company.

"Consistent with a corporate strategic decision regarding investing in gas infrastructure and related businesses, Sempra Generation will sell the development rights to the Idaho Valley Energy Project," Michael Niggli, Sempra Generation president, wrote in the letter.

Sempra's development rights now for sale include land and water options, environmental data, engineering studies and designs and meteorological data.

The letter, dated Wednesday, March 29, was issued hours before the Idaho Senate voted to approve a two-year moratorium on coal-fired power plants.

House Bill 791 passed Wednesday on a 30-5 vote and now goes to the governor for his consideration.

Sempra's proposed facility was to be a $1.4 billion, 600-megawatt plant sited in Jerome County.

Proponents said the project would provide jobs and million of dollars in taxes.

Opponents said the technology was outdated and posed a risk to Idaho's air and water and the health of its citizens.

Sen. Clint Stennett, D-Ketchum, was enthusiastic about the announcement.

"The process worked and Idaho is well served by their departure," he said Wednesday.

Sempra officials previously said a moratorium would cause them to pull the plug on the Jerome County project.

But Wednesday, Art Larson, Sempra spokesman, said the decision represented a shift in the company's investments.

"It was a strategic decision on where to put capital," he said. Their focus will be on natural gas infrastructure and facilities, including a 1,323-mile natural gas pipeline from Colorado to Ohio.

The announcement came on the day Sempra executives held an annual analyst meeting discussing the company's future activities.

The moratorium, Larson said, had "very little" to do with the decision. But the company maintains that moratoriums are bad policy.

"(It) would seriously compromise the willingness of investors to develop energy projects at a time when the state most needs to plan and attract investment in energy infrastructure to meet Idaho's future needs," Niggli's letter says. "Idaho's investor-owned and consumer-owned utilities have publicly stated a need for coal-fired electricity to meet increasing demand due to Idaho's growth."

Larson added that moratoriums put a "chilling effect on outside investments."

Rep. Wendy Jaquet, D-Ketchum, disagrees.

"The moratorium should go forward," she said Wednesday.

The state has no plan for siting coal-fired power plants, and its energy plan hasn't been updated since 1982. Jaquet said the state needs to take time to establish a framework for energy-facility siting and to determine Idaho's energy needs.

"(Sempra's announcement) takes the pressure off," she said, "and it ensures the governor will sign the moratorium bill." Addressing future energy needs is now on the front burner at the Statehouse.

The Legislature approved $300,000 to fund the Interim Committee on Energy, Environment and Technology, and charged it with formulating an energy plan.

Jaquet said more people are signing on to the idea of a siting committee, which could also be an outcome of energy-related discussions in the summer committee.

Currently, without a siting committee, the decision to approve the plant would have fallen to the three-member Jerome County Board of Commissioners if the necessary water transfers were secured and the Idaho Department of Environmental Quality issued its permits.

Stennett proposed two siting bills, one this legislative session, one last year, but both died in committee.

Sempra is also selling development rights to a coal-fired power plant project proposed for Nevada.

One issue Larson cited is the decision last year by the California Public Utilities Commission to no longer enter into long-term contracts to buy power from out-of-state coal-fired facilities that don't meet California's emissions requirements.

Stennett has no regrets about Sempra's change of heart.

"Don't let the door hit you on the way out," he said.

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