Idaho Power Accelerates Valmy Coal Plant Exit

Idaho Power updated its 2019 Integrated Resource Plan (IRP) in October. This second amended version improves upon the previous one by making various adjustments to prior model inputs and data analyses following the recommendations of the company’s IRP review team. The amended version recommends exiting the Valmy coal plant early.

In the updated analysis, the company plans to exit its Valmy Unit 2 coal plant in Nevada three years earlier than what was suggested in its previous plan. This advances the company’s exit date from the Valmy Unit 2 plant to 2022, aiding Idaho Power’s plans to remove all coal resources from its system by 2030. The earlier exit date for this plant resulted from an economic analysis that showed that wind and solar resources are cheaper compared to operating the Valmy Unit, and that exiting early would save consumers a significant amount of money. This analysis therefore reinforces the economic reality of operating expensive coal plants.

Valmy’s early closure will be another step forward in removing fossil fuel from the supply of electricity used by Oregon customers who are currently served by Idaho Power. Idaho Power stopped taking coal from Valmy Unit 1 at the end of 2019, and has also owned a stake in the Boardman coal plant which closed in October, 2020.

Valmy (sometimes called North Valmy) is a two-unit coal plant that is shared between Idaho Power and NV Energy. Idaho Power owns 50 percent of both units, but NV Energy is the plant’s operator. CUB has followed Idaho Power’s efforts to discontinue its coal operations at Valmy and commends the utility. Future coal and carbon regulation makes coal plants a significant economic risk for customers.

Idaho Power’s effort to remove itself from Valmy has not been easy. The operating agreement between NV Energy and Idaho Power does not contemplate one party wanting to discontinue operations – this is a problem for many of the joint-owned coal plants in the west. Idaho Power had to negotiate a new Project Agreement with NV Energy that set the terms by which one of the owners could leave and that agreement had to be reviewed by the public utility commissions (PUCs) of Oregon and Idaho. In addition, the company had to work with CUB and the Oregon PUC staff to find a way to accelerate the depreciation of Valmy Unit 1 to remove it from the books by 2019. (There may still be an unresolved issue with accelerated depreciation of Unit 2, but if there is, CUB expects that we will be able to work with Idaho Power and other stakeholders to resolve the issue.)

CUB appreciates the new coal analysis by Idaho Power and the effort it has undertaken to remove coal from its system. Oregon customers are well ahead on the path of having a coal free power system while saving thousands of dollars on their electricity bills. CUB has actively participated in Idaho Power’s IRP process. In the coming months CUB will review the company’s most recent IRP filing and ensure that its resource acquisition plans are accounting for similar benefits for Oregon ratepayers.

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