PacifiCorp Gets the Analysis Right: And It Is Closing a Coal Plant

PacifiCorp recently filed its updated analysis of additional investments necessary to keep its Cholla (pronounced “choy’ ya”) coal plant operating. Since 2010, CUB has been critical of PacifiCorp’s approach in evaluating coal plant investments, particularly the way PacifiCorp was analyzing the option of avoiding new investment by closing its plants. This time, PacifiCorp worked with CUB and the Public Utility Commission (PUC) staff on the design of its analysis before conducting the study on Cholla. On September 29th, the results of that study were released and the utility announced that rather than install a Selective Catalytic Reduction (SCR) system, it would phase out the coal unit:

“PacifiCorp will pursue a compliance strategy that avoids installation of SCR with a firm commitment to cease operating Cholla Unit 4 as a coal-fired unit in early 2025.”

CUB applauds PacifiCorp for doing a good analysis, and CUB is not surprised by the results. As coal plants go, Cholla was not very economical. PacifiCorp owns Cholla Unit 4, but the owner of the other 3 units had already pledged to phase out coal operations at those units. Under the EPA’s Regional Haze Rules, PacifiCorp was required to install expensive pollution control equipment on the plant if it wanted to continue coal operations at the plant.

The issue here is the same one PGE faced with Boardman: how does the utility bring the plant into compliance with the Regional Haze Rules of the Federal Clean Air Act? Oregon’s DEQ was supporting a plan that would have required PGE to invest more than $500 million in the plant and would have allowed it to operate until 2040 or beyond. CUB’s interpretation of the regional haze rules suggested that a plant owner could voluntarily agree to shut a plant early and that the pollution control would be evaluated on whether it was cost effective based on the shortened life of the plant.

At first this was problematic for DEQ because they had always used an assumed 20 year useful life for a plant under the regional haze rule. CUB proposed that instead of requiring PGE to spend $500 million to upgrade the plant, that DEQ should allow it to commit to closing the plant in 2020 and should then evaluate whether the pollution control was a cost effective investment for a plant that had a limited life. This may have been a novel approach at the time, but in the end, PGE, DEQ, EPA and the PUC all agreed. As a result, Boardman became the first modern baseload coal plant with an agreement to shut down early.

Since that time, CUB has been working to get PacfiCorp to conduct the same kind of analysis. We were calling it a “Boardman-style phase out approach.” We asked the PUC to reject PacifiCorp’s 2011 Integrated Resource Plan (IRP) because it had failed to conduct this analysis. In PacifiCorp’s 2012 rate case, CUB won a $17 million penalty against PacifiCorp because of the failure to conduct this analysis properly, and because it could not be determined whether the coal investments that they were making were the least-cost solution.

This year, CUB asked the PUC to reject pollution control coal investments in PacifiCorp’s 2013 IRP. The Commission did just that. In July it issued an order that refused to acknowledge the coal investments. It ordered the Company to work with the PUC Staff, CUB, and other parties on the parameters used for analyzing coal investments. In addition, because the decision on Cholla pollution control was imminent, the PUC ordered PacifiCorp to:

“Provide an analysis of the Cholla Unit 4 compliance alternatives in a special, designated IRP Update within six months of the final order in LC 57 and well enough in advance to allow for all viable pollution control alternatives to be adequately considered and pursued.”

Now, well before the six-month deadline, PacifiCorp has issued its IRP with updated analysis using the Boardman style phase out. While this style of phase out was novel when CUB proposed it for Boardman, PacifiCorp’s analysis finds that EPA has a “recent history of being willing to consider such approaches when they also provide significant environmental benefits.” It is therefore no surprise that the PacifiCorp decided to stop burning coal at Cholla by 2025.

That is also why CUB has been challenging PacifiCorp on their analysis for so long; when the analysis is done right, it makes a difference. It is cheaper for customers to phase out this plant, than to spend millions of dollars retrofitting it and allowing it to run indefinitely. And, as is often the case, this solution benefits not only the consumer, but also the environment.

To keep up with CUB, like us on Facebook and follow us on Twitter!

• Share this post on Facebook.
• Share this post on LinkedIn.
• Share this post with email.

« Back