By Dustin Bleizeffer 

State criticizes utility's plans to replace coal with renewables


October 14, 2020

Wyoming’s largest electrical provider, PacifiCorp, wants to speed up its shift from coal-fired power to renewable energy.

But its plan for achieving that vision lacks proper analysis, transparency and modeling, and doesn’t adequately consider other alternatives, such as nuclear power or adding carbon capture to coal plants. That’s the conclusion of the Wyoming Public Service Commission, which just released the results of its investigation into the utility’s 2019 Integrated Resource Plan.

The PSC’s findings won’t result in any immediate action regarding the utility, which operates as Rocky Mountain Power in Wyoming. Instead, the PSC will ask the company for more analysis and collaboration when developing future power scenarios and forecasts.

“There may be difficult decisions ahead, and the commission must be provided the best information possible, free of hypotheticals and perceived bias to make those decisions,” Commission Chairwoman Kara B. Fornstrom said. “The state has to have confidence in the analysis used to support the action plan.”

PacifiCorp/Rocky Mountain Power’s IRP, released in the fall of 2019, is a rolling analysis for how to provide reliable, lowest-cost electricity for the next 20 years. Preferred alternatives called for retiring several Wyoming coal-fired units early and developing renewable generation and storage. Shortly after release of the plan, the PSC announced it would investigate the IRP — an unusual measure for the commission to take.

The investigation included testimony from ratepayer organizations, industry and environmental groups, as well as local governments. It also included public hearings in Rock Springs and Kemmerer, where plans to shutter coal-fired units will damage local economies.

The three-member PSC commission outlined its conclusions during a public “deliberation” hearing Thursday, which included criticisms that PacifiCorp didn’t seriously consider adding carbon capture schemes to its coal-fired power plants in Wyoming. Further, members of the PSC commission alleged PacifiCorp designed its modeling to bolster a foregone intention to shift away from coal.

“I recognize [PacifiCorp] is serving six states with differing philosophies about the future of energy,” Fornstrom said, reading from a prepared statement. “I don’t envy them. However, I hope that it is clear that Wyoming wants its voice to be heard — the same amount of effort expended by the company to pursue Wyoming directives as to other states.”

The PSC will schedule a conference with PacifiCorp and stakeholders to suggest additional measures and methods in developing the utility’s next IRP; its 2021 planning effort is already underway. The commission will also review its control over plant retirements and other major changes to electric utility systems.

Perhaps the most significant determination by the PSC this week is that it can’t base its decisions on job losses and other socioeconomic implications of major utility actions.

Taking on those issues requires a coordinated effort between PacifiCorp and a full network of government agencies, Fornstrom said.

“In my view, outside of general awareness, the commission’s role is limited to appropriate cost-recovery related to these plans,” Fornstrom said. “Any attempt at mitigation is a system responsibility to be shared by all PacifiCorp and Rocky Mountain Power states and its shareholders. [PacifiCorp] has committed to developing these plans and I have urged the company to involve the appropriate agencies and local officials in an empathetic and cooperative manner.”

PacifiCorp/Rocky Mountain Power — the state’s largest utility — published its most recent IRP last year.

It detailed a preferred option that includes closing two of four units at the Jim Bridger plant near Rock Springs by 2029, closing the Dave Johnston plant near Glenrock by 2027 and closing two units at the Naughton plant near Kemmerer in 2026.

The coal units set for early retirement in Wyoming are several decades old, losing profitability, and typically operate at lower capacities than in years past, according to the company.

The plan also calls for adding 3,500 megawatts of wind generation in Wyoming by 2025, and another 4,600 megawatts from wind by 2038. More than 1,500 megawatts of wind generation is already under construction in Wyoming, and the utility plans to add another 1,920 megawatts by 2024 — a $3 billion-plus capital investment.

The company said its overall plan to more rapidly shift from coal to renewables will save its customers across six states up to $599 million.

Many Wyoming leaders desperately want to help keep coal burning in the state and throughout the nation. The state is the nation’s largest coal producer, and the industry’s decline is compounding a historic budget crisis.

Although more than 90% of the coal Wyoming produces is shipped to coal-fired power plants outside the state, the 12 coal power plants (most are made up of several coal-fired units) still operating within its borders support thousands of jobs and are economic drivers for towns such as Rock Springs, Kemmerer and Glenrock.

Several Wyoming lawmakers, along with Gov. Mark Gordon, are incensed that Renewable Portfolio Standards and other carbon emission-cutting efforts in other western states seem to drive PacifiCorp’s ambitions to trim coal power generation in Wyoming.

“I think it’s an absolute sham what Rocky Mountain Power has done, and a travesty,” Sen. Ogden Driskill (R-Devils Tower) told WyoFile in 2019. “After many years of being a good neighbor, Rocky Mountain Power is really not trying to be a good neighbor in Wyoming.”

Wyoming has taken a legislative approach to push back against plans to close coal-fired power units in the state, including a 2019 law forcing utilities that want to retire coal units ahead of schedule to first offer them for sale. They also want to push utilities with coal-fired power in Wyoming to strap on carbon capture technologies — an endeavor that’s been tried elsewhere without success.

But Gordon and Wyoming lawmakers insist it can work in Wyoming.

This year, the Wyoming Legislature passed a bill to subsidize carbon capture projects in Wyoming by dipping into Wyoming ratepayers’ pockets. Last month, Gordon rolled out a Wyoming-commissioned U.S. Department of Energy study examining the economic benefits of applying carbon capture to PacifiCorp’s Wyoming coal units set for early retirement. It concluded that doing so would not only save money for ratepayers, but sustain thousands of jobs and significant tax revenue to the state.

PacifiCorp, and several energy market experts, panned the study as a woefully inadequate examination.

“The list of items missed by the study’s analysis is very long,” PacifiCorp spokesman Spencer Hall said in September. “This type of calculation ignores so many elements, and should not be relied upon for making the kinds of decisions required of a regulated utility.”

Hall told WyoFile on Thursday that PacifiCorp needs more time to process the PSC’s conclusions before commenting.

Climate and multi-state considerations

Another criticism leveled at the utility’s analysis was its inclusion of a possible carbon tax or cost applied to the emission of greenhouse gases. Curbing fossil fuel emissions — of which coal is a significant contributor — will be key to stemming the climate crisis, according to scientists.

PSC Chairwoman Fornstrom agreed with other intervening parties’ testimony that the inclusion of a potential future price on carbon might have skewed PacifiCorp’s analysis of shifting from coal to renewables. A proper analysis of future energy markets in the utility’s service territory might better be rooted in existing laws and regulations, she said. So far, there isn’t a regulated price on carbon emissions.

PSC Deputy Chair Mary Throne disagreed. “I recognize that there is no carbon tax in place yet, but I don’t believe there was any testimony that it’s completely unreasonable to include some risk for carbon regulation in the future — and indeed the Clean Air Act still regulates greenhouse gases. That has not gone away, and is unlikely to go away,” she said.

Throne said Wyoming’s wishes are complicated by the fact that PacifiCorp must meet regulatory requirements in several other states. Trying to quantify the potential future cost of meeting evolving regulations limiting fossil fuel emissions is “difficult and speculative,” she said. “I don’t think it is improper for PacifiCorp to consider the cost of carbon [emissions] going forward.”

This week, the Trump administration is arguing in the U.S. Court of Appeals in Washington D.C. that the federal government doesn’t have authority to limit greenhouse gas emissions from power plants.

Shannon Anderson is staff attorney for the Powder River Basin Resource Council, a Sheridan-based landowner advocacy group that intervened in the PSC’s investigation. She said she was glad to hear that the PSC doesn’t seem to see its role and authority expanding into consideration of the more broad and complex aspects of socioeconomic impacts related to closing power generating facilities and building new facilities. However, she said, she still worries that the PSC might move in that direction.

“They [the PSC and elected leaders] want to save these coal plants,” Anderson said after Thursday’s hearing. “The question is how, and is it legal?”

The PRBRC saw no evidence in the PSC investigation filings that PacifiCorp’s plans to begin shuttering old coal plants and replacing them with renewable energy and battery storage will result in increased costs to ratepayers and reliability issues, she said. Although, Anderson added, her organization would like to see deeper analysis of both questions.

“This [PacifiCorp’s 2019 IRP] is a very modest proposal and recognizes the coal units they propose to retire are completely uneconomic,” Anderson said. “Every day they run, they lose money for customers.”

WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.


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