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Leavitt proposes power plan

Utah governor calls for generating and conserving electricity

Wrapping up common energy words such as "conservation," "efficiency," environment" and "streamlining" into one package, Gov. Mike Leavitt on Wednesday unveiled an energy policy designed to meet the state's needs more than a decadeinto the future.

The two-page document calls for increases in the supplies of gas and electricity by 2005 to cover the state's needs for the next 10 to 15 years and to help other states as well, if possible.

Acknowledging that "cheap energy is a thing of the past," the governor made it clear that Utah's needs come first.

"Utah has the will to do what is necessary to ensure consumers have reliable power at reasonable prices," Leavitt said.

Additional information:

Governor's statement on Utah's energy policy

Full text of Utah's Energy Policy

The policy is the final version of a document fine-tuned by the governor's Energy Supply Working Group, which has met since December to map the state's energy strategy. It spells out energy demand projections, changes in state government and the framework for making energy-based decisions.

Reed Searle, general manager of the Intermountain Power Agency, which oversees the Intermountain Power Project near Delta, commended the governor for his actions.

"We've long felt the state needed an energy policy," Searle said. "This is a big step in answering a lot of questions in people's minds and in providing guidance."

Leavitt said the eventual results of the policy will be more gas pipeline construction and increased pipeline capacity, the construction of more power plants — both coal- and gas-fired — and incentives for consumers to conserve.

All will be needed if the energy-use projections are accurate. The state is expected to need nearly twice as much electricity in the next decade as it uses now. While the state uses about 3,000 megawatts — about 5,000 during peak usage periods — Leavitt wants to see enough generation to meet the expected additional demand of 1,800 to 3,100 megawatts in the next 10 years. A megawatt is enough energy for about 500 homes.

And while the average home uses about 115 decatherms of natural gas per year, the governor said Utah will need 32 million more decatherms in the future. He noted, however, that much of that gas would be used for electricity generation.

The state also will need 287 million more gallons of petroleum products, including 160 million gallons of gasoline, 99 million gallons of diesel fuel and 28 million gallons of jet fuel.

To help move electricity generation plans along, the state will establish a single-point review process within the Department of Environmental Quality to help "fast-track" regulatory activities. The governor also will create an Energy Coordination Council, which will implement the energy policy and develop positions among and between agencies.

But boosting generation isn't the only goal. The governor plans to merge the Office of Energy Services and the Office of Energy and Resource Planning to help get Utahns to conserve and use energy more efficiently.

"Due to complex economic, environmental and regulatory issues, the West has not kept up in the development of energy resources," Leavitt said. "Conservation, for all of us, is an important short-term solution, but of course more production is a long-term necessity.

"We cannot just build our way out of this (energy) problem," he said, but added that conservation measures must become an ethic. "It's a hard sell to get my children to turn off the lights at home."

The energy policy also emphasizes regional participation, including cooperation with other states and a regional electrical transmission organization. "We have to partner with other states to be sure we can meet our demand," Leavitt said.

But he remains critical of California, saying that state's consumers "continue to be shielded from the true cost of power." State law is keeping most utilities from passing on the higher costs of obtaining power, leaving consumers with less incentive to conserve.

"If they don't solve that problem, the ripple effect across the West — across the United States — will be considerable," Leavitt said. "Our state will continue to participate as a partner in creating regional solutions to this problem. But we will take care of Utah first."

And while the state hopes to "fast-track" the regulatory process for new power generation construction, Leavitt said energy needs must be balanced with environmental priorities.

"Communities that have a steady supply of high-quality energy will prosper in the 21st century. Those who don't will falter. We must find the balance between sustainable economies and sustainable environment. We can have both," he said.

Natural gas will be in heavy demand for electricity generation, which will drive up its price. That will make coal — plentiful in Utah and already strongly entrenched as the top energy source in the state — more economically viable as an energy-generation option, he said.

But he stressed that the state needs a diversified energy mix. "We're not going to bet on one fuel; we're not going to bet on one source," he said.

That rang hollow with Joro Walker, director of the Utah office of an environmental organization called the Land and Water Fund of the Rockies. Walker said she liked Leavitt's push for conservation and efficiency, "but his focus on coal was disappointing. I want us to think long-term. All the evidence points to renewable resources being important in the future."

Sarah Wright, chairwoman of the Utahns for an Energy Efficient Economy, concurred. She emphasized that energy-efficiency measures costing $300 million to $400 million could trim 700 megawatts off the state's needs and save $1 billion over the next 20 years.

"I'm not sure the public understands," she said. "People plug in their lights and don't think of where the electricity comes from or the potential degradation of the environment as a result of using energy."