Utah considers legal action against California coal fees

February 13, 2018

Looking to support the coal industry in the state, Utah lawmakers gave initial approval to a proposal that would set aside $2 million to sue California over rules that make coal-fired power more expensive.

The proposal from Republican Rep. Mike Noel passed through a subcommittee on Feb. 12 with only one Democratic lawmaker raising objections. It marked the latest attempt by the state's GOP leadership to help a struggling coal industry that is key to economies in several central Utah counties, the Associated Press reported.

Coal production in the state has dropped by about 40 percent since 2015 as natural gas and renewal energies have gained a large share of the market.

Noel said California's policy is hurting coal miners in his rural district and violates the U.S. Constitution's Commerce Clause. He said the taxpayer money is a small price to pay for standing up to what he calls “California's war on Utah coal.”

California utilities pay an extra $15 per megawatt hour to buy power from Utah's coal-fired Intermountain Power Plant.

“The next thing it will be the pork produced in the state,” said Sen. David Hinkins, a Republican who represents several of the state's counties most dependent on coal production. “It would be like us saying we don’t want to take California almonds or California oranges but we'll take them from Florida.”

However, California regulators and environmental groups disagree.

California Air Resources Board spokesman Stanley Young said that the state's system is not singling out Utah.

“California’s cap and trade program is designed to reduce climate-changing gases and rewards electricity with lower carbon pollution used by Californians — regardless of where that electricity comes from,” Young said.

The system has survived previous court challenges from business leaders in California.

Lawmakers who several years ago backed a Utah plan to spend $53 million in public money on an Oakland, CA-coal shipping terminal say the proposed expansion would allow them to ship coal to Asia. But the Oakland City Council voted to ban coal shipments, leading to a court battle that is awaiting a ruling from a federal judge in California.

The new proposed money was inserted into an appropriations bill by the Natural Resources, Agriculture and Environmental Quality Appropriations Subcommittee and now moves on to an executive appropriations committee.

Out-of-state demand for Utah's coal had led to a drop in coal production to about 14 million tons in 2017, down from about 27 million tons in the mid-2000s, said Michael Vanden Berg, energy and mineral program manager at the Utah Geological Survey.


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