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Utilities that operate coal plants in the Western U.S. face growing water supply

Electric utilities that operate coal plants face growing water supply risks in the western United States, where water is scarce and increasingly threatened by hotter and drier conditions driven by climate change.

That’s the focus of a new Energy and Policy Institute report, which explores the water supply risks facing coal plants in the American West, and the conflicts over water that have arisen between communities and the utilities that own and operate coal plants. Those include legal disputes over water rights between Native American communities and utilities, groundwater consumption by coal plants in Arizona, the impacts of drought on coal plants in Colorado, Montana, and Wyoming, and more.

Several electric utilities have recently announced plans to close coal plants that they operate in order to reduce costs and meet the expectations of their customers, regulators, and investors for a cleaner power supply. Those closures will free up large quantities of water, creating potential economic and environmental benefits while also raising questions about the fate of that newly available water.

But many coal plants in the Western U.S. do not yet have clear closure plans, and the utilities that operate them will continue to face water supply risks and conflicts.

Cumulatively, 30 coal plants in Arizona, New Mexico, Colorado, Utah, Nevada, Montana, and Wyoming consumed more than 370 billion gallons of water between 2014 and 2018, according to data published by the Energy Information Agency. That amounts to more than 76 billion gallons of water each year, or 208 million gallons each day on average.

Combining coal unit water consumption data with coal unit closure dates shows that coal plants in the Western U.S. could consume 886 billion gallons of water between 2020 and 2040. That figure could be reduced as more utilities announce additional coal plant closures, close coal units before their scheduled retirement dates, and operate coal plants less often.

The largest electric utilities in the West warn investors in filings with the Securities and Exchange Commission that drought in the region could disrupt water supplies consumed by their coal plants. For example, New Mexico’s largest utility PNM reported in its 2019 10-K annual report about water risks, including to coal plants that it plans to close (San Juan Generating Station, or “SJGS”) or exit (Four Corners):

Assured supplies of water are important for PNM’s generating plants. Drought conditions in New Mexico, especially in the “four corners” region, where SJGS and Four Corners are located, may affect the water supply for PNM’s generating plants. If inadequate precipitation occurs in the watershed that supplies that region, PNM may have to decrease generation at these plants. This would require PNM to purchase power to serve customers and/or reduce the ability to sell excess power on the wholesale market and reduce revenues. Drought conditions or actions taken by the court…

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2020-07-15 19:58:19

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