Coal-fired debate heats up in Texas

By Eileen O'Grady

HOUSTON, Feb 9 (Reuters) - Opposition is growing to TXU Corp.'s $10 billion plan to build new coal-fired power plants in Texas as lawmakers and regulators consider measures in the next few weeks that will determine whether the projects can move forward.
Environmental groups have been joined by elected officials and business leaders arguing that TXU's plan to build 11 new coal plants will drastically increase emissions of sulfur dioxide, nitrogen oxides, mercury and carbon dioxide, worsening the state's air quality and contributing to global warming.
A public rally to oppose plans by TXU and other developers is set for Sunday on the steps of the state capitol in Austin. Both sides have bought newspaper and TV ads to sway public opinion.
"No one wants all these coal plants the way they have been sprung on Texans," said Jackson Williams, executive director of Texas Clean Sky Coalition, the latest business-based coalition to oppose new coal plants.
The battle pits powerful mayors in Houston and Dallas against Texas Gov. Rick Perry who supports coal development. It pits Texas cities that welcome jobs and taxes the plants will create against communities that want more coal plants only if they use a technology, called gasification, to cut pollution.
Dallas-based TXU said new plants will add generation to keep pace with the state's growing appetite for power in a cost-effective way that uses the best anti-pollution technology available.
Critics say TXU is using old coal technology and only wants to boost profits while adding more pollution to the Texas sky in hopes of beating the deadline for future laws to restrict coal-plant emissions.
"The company will more than double its emissions of carbon dioxide, the primary man-made greenhouse gas, from 55 million tons a year to 133 million tons a year," said Jim Marson, regional director of Environmental Defense in Austin.

OPPOSITION EXCEEDS TXU'S EXPECTATIONS
The showdown begins later this month on two fronts. A regulatory hearing will be held for permits that would allow TXU to build six coal plants. Legislators are meeting to consider a coal moratorium and proposals that would limit power-plant ownership or tighten the air-permit process.
Donna Hoffman, a spokeswoman for the Sierra Club in Texas, said rally organizers hope to convince legislators to endorse a six-month moratorium on coal permits.
A moratorium would derail the governor's effort to expedite Texas' air-permit process. In 2005, as electricity prices soared after two hurricanes disrupted U.S. natural gas production, Perry issued an order to spur coal construction to reduce Texas' reliance on expensive gas.
Opposition to its plan has exceeded TXU's expectations, said spokeswoman Kim Morgan.
"We feel we have put together a strong, positive program for the state to lower prices, supply much-needed power and better air quality," Morgan said.
TXU critics are skeptical of TXU's pledge to cut overall emissions by 20 percent by cleaning up its older coal plants with additional pollution controls.
The only concession made by TXU has been to agree to build some new plants so that equipment can be added to capture carbon emissions in the future.
Investors are watching the growing opposition.
"We had the impression when this was announced that people were a lot more concerned about the high and rising price of electricity in Texas," said Tim O'Brien, a principal with Crow Point Partners, which advises the Boston-based Evergreen Utility and Telecommunications mutual fund which owns TXU shares.

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