Phasing Out 14 Coal Units Could Save $1 Billion
Posted on February 3, 2017 by Bob Jenks
Tags, Energy
It has taken CUB a few years to get PacifiCorp to seriously analyze phasing out coal plants instead of spending billions to retrofit their plants. However, Pacific Power (PAC) recently presented the results of its analysis of the least cost/least risk way to comply with Regional Haze pollution standards on 14 coal units that are facing retrofits. The Company’s analysis found that phasing out the plants as an alternative to retrofits will save its customers $1 billion.
To give you some context to this story let’s start back in 2009.
Portland General Electric (PGE) was facing a $500 million retrofit on the Boardman coal plant. CUB’s review of the Regional Haze Requirements (part of the federal Clean Air Act) convinced us that PGE could propose phasing the plant out and committing closure as an alternative to the retrofit. CUB successfully pushed PGE to analyze phasing the plant out by 2020 as an alternative, and PGE’s initial analysis suggested this would save customers approximately $200 million. Then, working with PGE, we were able to secure the approval of the Oregon Department of Environmental Quality, the Oregon Public Utility Commission (OPUC) and the US Environmental Protection Agency.
At about that same time, PAC was also facing similar retrofits on many of its coal plants and CUB urged it to conduct the same analysis. At first the Company refused, then agreed, however ultimately PAC failed to effectively analyze the phase-out of coal plants. In 2012, CUB asked the OPUC to penalize Pacific Power for acting imprudently by not properly analyzing the phase-out alternative before retrofitting three coal plants. OPUC agreed and Pacific Power was required to provide customer credits totaling $17 million.
Again, in 2013, CUB asked OPUC to reject PAC’s plan to retrofit additional coal plants, because they did not properly analyze phasing out the plants as an alternative. OPUC agreed, rejected the coal retrofits, and ordered the utility to work with CUB and OPUC Staff on improving its analysis of its coal retrofits. In 2014, we saw the results of this improved modeling when PAC examined the required retrofit at its Cholla coal plant and concluded that phasing out the plant was a better alternative.
Last week (the final week of January 2017), PAC presented its latest analysis of retrofitting coal plants in an IRP workshop. This time, the utility properly analyzed phasing out the plants as an alternative. And just like the Boardman and Cholla results, the analysis shows that customers will save big money by phasing out the plants.
This plan still has to be reviewed by other stakeholders including the OPUC, the states where the coal plants are located, and federal environmental officials. But with $ 1 billion in savings, the economic benefits of phasing out the coal plants are clear, and will be hard to reject.
Pacific Power will submit its final IRP draft to the Commission in the Spring, and we will then be able to access the particulars of their analyses. However, with a projected savings of $1 billion, we are confident that PAC’s 2017 IRP will be great for consumers.
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02/02/17 | 0 Comments | Phasing Out 14 Coal Units Could Save $1 Billion