Idaho Power will make its case in November for investing $130 million in environmental upgrades for the Jim Bridger coal-fired power plant near Rock Springs, Wyo.
The utility that serves nearly 500,000 customers in southern Idaho and eastern Oregon has already begun the make its case to customers in an insert in its latest bill. But it will lay out its case publicly for a Certificate of Public Convenience and Necessity at a technical hearing Nov. 7 with PUC staff and the groups who have intervened.
The certificate means the PUC considers the investment prudent and approves adding it to customers’ bills. But it won’ immediately show up on your bill if they do approve it.
The PUC will hold a public hearing on the certificate Nov. 25. It is expected to rule by Nov. 29.
Idaho Power has one-third ownership in the coal plant that is the largest emitter of greenhouse gases in the region. Only two units with 351 megawatts are scheduled for upgrade.
Utah and Wyoming already have approved the upgrade for Pacificorp, which is the majority owner. If approved, Idaho Power estimates it would add $18.8 million to the annual revenues it charges its customers
This week the Oregon Public Utility Commission issued a warning to PacifiCorp about its Integrated Resource Plan saying it has not fully accounted for the risks of spending hundreds of millions of dollars to keep its coal plants. One commissioner said Pacificorp was headed “for a trainwreck” on the rate approval process, if they don’t.
Idaho Power said in its filing with the Idaho PUC it was seeking the certificate “because of the magnitude of the investment and the uncertainty surrounding coal-fired generation in today’s political and social environment.”
The environmental upgrades are needed to comply with Clean Air Act regional haze rules that require controls to limit nitrogen oxide emissions by December 2015 on Jim Bridger Unit 3 and December 2016 on Unit 4. The regional haze rules are designed to improve visibility in national parks and wilderness areas.
Idaho Power claims it considered other options, including replacing the Bridger output with natural gas-fired generation. To replace all of its coal power, about 1,000 megawatts, it says it would have to build three natural gas plants similar to the Langley Gulch plant at a cost of more than $400 million apiece, it told its customers in a newsletter.
Its wind power would only produce 700 megawatts if the wind blew 24 hours a day, they say. Wind does not blow as often during the summer peak, it said in the newsletter.
Idaho Power also says solar and geothermal won’t replace coal soon, but they only looked at the issue with them as the capital investors. Critics said during Idaho Power’s Integrated Resource Planning deliberations that they could get customers and third party investors to pick up most of the capital tab if they wanted.
The commission staff, which operates independently of the commissioners, agreed with the company’s analysis that the upgrades are more economically favorable to customers. The staff said any alternatives to investing in Bridger emissions controls must be dispatchable and reliable year-round. Further, staff said, the alternatives must be constructed and operational by the federal compliance deadline.
Idaho Power said natural gas prices would have to decrease by 52 percent to make natural gas conversion more economically favorable. Carbon dioxide emissions prices, which would come either from a carbon tax or a emissions market, would need to be 423 percent more than the company’s forecasted carbon prices to cover the cost of retiring the coal plants and replacing them with other sources or demand reduction programs.
The staff recommended only $81.4 million be pre-approved for ratemaking because some of the utility’s costs are not as certain as others.
The Industrial Customers of Idaho Power said in its filing it does not oppose the certificate, but opposes pre-approved ratemaking treatment. “There is no compelling reason the commission needs to bind itself or future commissions with these investments at this time,” lawyers for the industrial customers said.
The Snake River Alliance opposes the certificate but said that if approved, it should not include binding ratemaking commitments.
The Idaho Conservation League said Idaho Power had not adequately presented the associated with investing in coal or compared them to the risks associated with other options.