PacifiCorp Study Finds Closing Coal Plants Will Benefit Customers
Posted on December 11, 2018 by Bob Jenks
Tags, Energy
Last year, the Oregon Public Utility Commission (PUC) requested a study of PacifiCorp’s coal plants to determine if those plants remain economic. Since 2010, approximately one third of all coal plants in the US have shut down, with many more planned to retire in the next few years, including Oregon’s Boardman plant, Washington’s Centralia plant, and Nevada’s North Valmy plant. While PacifiCorp has retired two small coal units, and plans to retire a small number of additional coal plants, it has lagged behind other utilities. This raised the question of whether PacifiCorp’s coal plants were more economic than other utilities, or whether the company was running plants that were uneconomic.
Last week, the company released the preliminary results of its study of 23 of its coal plants. The study examined PacifiCorp’s costs with and without each plant. In most cases, the study found that costs would be lower without the plant. There was a fair amount of press attention to this study, much of it focused on the finding that of the 22 coal plants, 13 (or 60 percent) were not economic.
Of course, the details of the analysis are a little more nuanced. PacifiCorp operates a system of electric generation and transmission that provides service to customers across six western states. While 16 of the 22 coal plants could be eliminated on an individual basis and reduce costs, this does not mean that all 16 can be closed. There is a big difference between closing an individual plant, and 3 or 4 plants, or 15 or 16. The utility has to maintain reliable and affordable service.
This led to the second part of the PacifiCorp study: examining what would happen if it removes multiple coal units. This study found that the utility could save customers as much as $300 million by eliminating five coal units. However, the company still has some work to do looking at the reliability impacts of shutting down multiple coal plants.
CUB was one of the groups that supported the request for this study. We know from our work on Boardman that closing coal plants can provide economic benefits to customers. In addition, future carbon regulation creates an economic risk around coal. In the face of climate change, coal needs to be phased out.
This study shows that some of PacifiCorp’s coal plants should be retired soon. While the exact number will need further analysis, there is little doubt that closing coal plants will have an economic benefit. Just as importantly, the study shows that PacifiCorp can no longer proceed on the assumption that its coal fleet is economic. It isn’t. In every resource planning process going forward, PacifiCorp will have to update its coal analysis and keep looking at closing coal plants.
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12/11/18 | 0 Comments | PacifiCorp Study Finds Closing Coal Plants Will Benefit Customers