Reader's View, Idaho Power: Company needs to explain coal decision

May 14, 2013 

Rocky Barker got it right in his April 30 column: Idaho Power faces profound changes in how it does business.

Burning coal to make electricity, for instance. As Idacorp shareholders convene Thursday for the company's annual meeting, they face an urgent question not on their agenda. As utilities nationwide shed coal plants due to what Idaho Power says is coal's uncertain future, why is it doubling down on coal?

If Idaho Power intends to continue burning coal for 40 percent of our electricity, it should explain why, and soon. Customers have no reason to believe Idaho Power's "trust us" explanation of its proposed coal plant investments because the data underlying the decision remains confidential. But the impact on our monthly bills and the risks to the power plants are enormous, as Idaho Power told the Securities and Exchange Commission in its 2012 Annual Report:

"Environmental laws and regulations may, among other things, increase the cost of operating power generation plants and constructing new facilities, require that Idaho Power install additional pollution control devices at existing generating plants, or require that Idaho Power cease operating certain power generation plants…"

If Idaho Power doesn't know what it will cost to keep burning coal, why did it tell the Idaho Public Utilities Commission in February that it already decided to pour $200 million or more customer dollars into its coal plants without examining alternatives other than burning natural gas?

Idaho Power proposes to saddle customers with at least two decades of unknown environmental retrofit costs to keep the plants operating legally, and those investments don't include the future cost of controlling carbon dioxide emissions. That's why utilities nationwide are dropping coal for expanded energy efficiency, renewables and natural gas, including one very close to home: Idaho Power's partner in its Nevada plants, NV Energy, just said it's going coal-free, leaving 50 percent owner Idaho Power potentially holding the bag - of coal.

Idaho Power claims customers want cheap power regardless of the proven health and environmental risks, but also the known economic risks. It says its coal plants "meet or exceed" environmental rules, just as all utilities do. And it argues that clean energy alternatives such as wind or solar are incapable of replacing coal. It is true wind doesn't always blow and the sun doesn't always shine, but utilities are already integrating both in amounts greater than Idaho Power says it can handle. Nobody suggests replacing Idaho Power's 1,100 megawatts of coal power with wind, but rather a blend of clean energy replacements as other utilities are doing.

Idaho Power faces scrutiny not only from clean energy advocates and consumer advocates but also regulators in Idaho and Oregon who will determine whether its investment into its coal plants makes sense. It wants to make that commitment this year, before customers can review it. Customers have paid for these coal plants once; they should not have to start paying for them again.

If any of those coal investments are disallowed for recovery in customer rates, as has already happened to Idaho Power and its other coal partner, PacifiCorp, then those costs would shift from customers and to the company and its shareholders. It describes the risk this way:

"If Idaho Power is similarly unable to recover in full its costs through the ratemaking process, such nonrecovery would negatively impact Idacorp's and Idaho Power's financial condition and results of operations."

That's an extraordinary gamble and one not befitting a conservative company like Idaho Power. It's also the kind of crapshoot that should get the attention of the company's shareholder owners convening in Boise.

Ken Miller is energy program director at Snake River Alliance.

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