IPA spokesman John Ward said allowing an application for an air permit to expire was a formality as plans for the plant have not been viable since 2007 when the Los Angeles Department of Water and Power (LADWP) pulled out of the project.
There are no plans to stop production of the existing two units at Intermountain, which produce 1,800 MW of power.
"More than 400 million tons of carbon dioxide pollution, a main cause of global warming, have been kept out of the air annually as a result of stopping these 100 plants," said a Sierra Club statement.
"It also demonstrates an undeniable trend of American communities moving beyond coal and toward clean, renewable energy," said the environmental group.
The Sierra Club's national director of its anti-coal efforts, Bruce Nilles, praised Los Angeles Mayor Antonio Villaraigosa, who announced that the city's 1.45 million electricity customers would stop getting power from coal plants by 2020.
Nilles said that the Bush Administration cleared the path for a surge in new coal-fired power plants in 2002 by eliminating some environmental regulations.
Coal power plants emit more carbon dioxide than any other source in the United States. CO2 accounts for more than 85 percent of the world's greenhouse gas emissions that cause global warming.
The Los Angeles city-owned utility has said it will stop using coal-fired power by 2020, although its contract to buy 44.6 percent of the power from the existing two units at Intermountain will not expire until the last day of 2026.
About 40 percent of the electricity now delivered by the LADWP is generated from burning coal, mainly at Intermountain and at the Navajo Generation Station in Arizona. No utility-scale coal power plants operate in California anymore, and the state has banned new contracts for imported coal power. The agreement to buy power from Navajo expires in 2019 and will not be renewed, the LADWP said.
Villaraigosa admitted that electricity rates in Los Angeles will increase as a result of the new policy.
Nationally, about half the electricity delivered comes from coal plants.
The IPA, which is owned by 36 Utah municipal utilities and rural electric cooperatives, did not withdraw the permit until now because it was involved in a lawsuit with the LADWP over more than $6 million in costs to plan Unit 3, said Ward.
That suit was settled last month. Details were not disclosed by Ward or the LADWP.