CUB Applauds Coal Shut Down, Demands Better Analysis of Coal Investment

A couple of years ago, PGE was planning to invest $500 million in its Boardman coal plant. CUB challenged PGE to consider phasing the plant out instead of making the planned investments, and requested that PGE complete an analysis of a phase-out. PGE did the analysis and concluded that customers could save $200 million with a phase-out of the Boardman coal plant. (See Boardman Closure Update from last year.)

Since that time, CUB has been working to get Oregon’s other two electric utilities, both of which have significant coal resources, to conduct similar studies before making investments in their aging coal plants. We talked about this last year in “PacifiCorp Is Starting to Get the Message On Coal.” This past week showed that we are making some progress with PacifiCorp—but we’re not having much success (yet) with Idaho Power.

PacifiCorp

In a filing last week, Pacific Power announced its intention to stop burning coal at the Naughton 3 coal plant, saying that its analysis shows that it is cheaper to stop burning coal instead of investing millions in new pollution control equipment. CUB has been pushing PacifiCorp to do a comprehensive study of the Naughton 3 coal plant, because its plans required significant investments in pollution control to be made over the next few years.

The new analysis of Naughton 3 conducted by PacifiCorp states that it would be cheaper to stop burning coal and instead covert the plant to natural gas. Because burning gas in a former coal plant is not as efficient as a new natural gas combustion turbine, this repowered plant would operate primarily to serve summer peak load in Utah and Wyoming. PacifiCorp says that it does not need the plant the rest of the year. This change in position by PacifiCorp shows that recent investments in wind generation and energy efficiency are reducing the need for large baseload power plants that run 24/7.

PacifiCorp deserves credit for its recent decision. The company has spent years fighting against attempts to close coal facilities. And in recent years, it has invested more than 1 billion dollars in its coal fleet without first studying whether this was the best decision economically. But this time PacifiCorp did the study we requested before making new investments, and now it is proposing to stop burning coal at this plant. This is a significant switch for the company, and we applaud the decision.

Idaho Power

On the other hand, Idaho Power is moving forward with clean air investments in its coal fleet without looking at alternatives. CUB filed testimony this week asking the PUC to find Idaho Power imprudent for not doing the type of analysis that PacifiCorp has now done on Naughton 3, and that PGE did on Boardman. We also requested that the PUC disallow Idaho Power’s request to charge its Oregon customers for the costs of the clean air investments that were not properly analyzed.

Idaho Power and PacifiCorp are both part-owners of the Jim Bridger 3 coal unit. Jim Bridger 3 is in the process of upgrading its pollution control technology as part of the Clean Air Act’s Regional Haze Rules. These are the same rules that created the need to invest millions in PGE’s Boardman coal plant. Because Idaho Power is also a minority owner of Boardman, the need and potential outcome of such a study should not come as a surprise to the company. Since the same rules caused PacifiCorp to change its position on Naughton 3, it is not surprising that PacifiCorp’s recent testimony related to Naughton 3 also referenced the need to review Bridger 3.

At issue in the current Idaho Power rate case is the incremental investment associated with a single year at Bridger 3—a relatively small sum of money. More important, as CUB pointed out in its testimony, is a review of the entire proposed clean air investment scheduled to take place in the coming years. The question that needs to be asked is whether it is cost effective to invest in the Jim Bridger 3 plant at all, or should the company be considering retirement of the plant, as was done with Boardman, or repowering of the plant as a natural gas plant as is being suggested for Naughton 3.

One additional troubling issue related to the Idaho Power docket is that the Staff of the Oregon Public Utility Commission filed testimony supporting Idaho Power’s investment in the coal plant. The PUC Staff seems happy to evaluate each year’s incremental investment separately, without ever considering the total multi-year investment cost required to meet the federal requirements. Under the PUC Staff’s approach, both Boardman and Naughton 3 would have continued to burn coal. We would never have discovered that it will save customers huge amounts of money to phase out coal burning at these facilities.

An interesting footnote—I found out about the PacifiCorp Naughton 3 decision while attending the Western Clean Energy Advocates Conference in San Francisco. I had been invited to the conference to discuss Boardman as a case study in how utilities can save customers money by avoiding investments in coal plants. By the time I actually stood up to speak there were two case studies for me to point to! We thank WCEA for my invitation to speak about this work.

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