Idaho Power told its customers this month that coal is going to be a major source of electricity for years to come based on what we know today.
For that to happen, the company must invest $130 million in pollution-control equipment for the Jim Bridger coal-fired power plant near Rock Springs, Wyo.
Idaho Power didnt have to go to the Idaho Public Utilities Commission to get permission to make the investment paid for by its customers. But the utility, serving people and businesses in Southern Idaho and eastern Oregon, decided to take its case there because of the magnitude of the investment and the uncertainty surrounding coal-fired generation in todays political and social environment, Idaho Power said in its PUC filing.
That uncertainty comes as President Barack Obama is taking steps to regulate greenhouse gases from power plants, and as many utilities are moving away from coal.
So Idaho Power sent customers an insert in the latest bills touting coal as an inexpensive, reliable energy source. It also filed for a Certificate of Public Convenience and Necessity with the PUC, to make the case that the environmental upgrades are a prudent investment and to lay the groundwork for including those costs in a future rate request.
Groups such as the Snake River Alliance and the Industrial Customers of Idaho Power arent ready to support Idaho Powers plan to place the cost of upgrading the coal plants on customers backs. They will get a chance to grill company officials at a technical hearing Thursday with PUC staff and the groups that have intervened.
The PUC will hold a public hearing on the certificate Nov. 25, and expects to rule by Nov. 29.
Approving the certificate would mean that the PUC considers the investment prudent and OK to add to customers bills. But those costs wouldnt show up on bills immediately because they still would have to be included in a future rate case.
GREENHOUSE GAS SOURCE
Idaho Power owns a third of the Wyoming Bridger plant, the largest emitter of greenhouse gases in the region. Two units that generate 351 megawatts of electricity are scheduled for upgrades.
Pacificorp is the plants majority owner. Utah and Wyoming already have approved its requests for the upgrade.
But in October, the Oregon Public Utility Commission issued a warning to Pacificorp about its Integrated Resource Plan, telling the company that it had not fully accounted for the risks and possible future costs of keeping its coal plants. Commissioner John Savage said Pacificorp was headed for a train wreck on the rate-approval process.
Zack Waterman, director of the Sierra Clubs Boise office, said the Idaho PUC should wait until Pacificorp provides Oregon with the answers it wants before deciding Idaho Powers request.
Idaho Power estimates that the upgrade would add $18.8 million to what it charges customers. But Water said the $130 million upgrade price does not include the cost of complying with mercury, greenhouse gas or coal ash regulations that are coming down the pipe.
The environmental upgrades are needed to comply with regional haze rules under the Clean Air Act, designed to improve visibility in national parks and wilderness areas. Those rules require controls to limit nitrogen oxide emissions by December 2015 on Jim Bridger Unit 3 and by December 2016 on Unit 4.
Idaho Power claims it considered other options, including replacing the Bridger power output with natural gas-fired generation. To replace all of Idaho Powers coal power about 1,000 megawatts the company says it would have to build three natural gas plants the size of its New Plymouth-area Langley Gulch plant, at a cost of more than $400 million each.
Idaho Power also says solar and geothermal wont replace coal soon, but the utility looked at the question only with plants built by Idaho Power. Critics said during the utilitys Integrated Resource Planning deliberations that it could get customers or third-party investors to pick up most of the capital cost if it really wanted to get electricity from those sources.
The PUC commission staff, which operates independently of the commissioners, agreed with the companys analysis that the coal-plant upgrades are economically favorable to customers. But it recommended that just $81.4 million of the $130 million cost be approved for ratemaking, because some of the utilitys costs are not as certain as others.
CRITICS DONT WANT CUSTOMERS TO PAY
The Industrial Customers of Idaho Power said it does not oppose the certificate but does oppose the ratemaking process.
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 Snak e River Alliance does oppose the certificate. Ken Miller, its Clean Energy Program director, quoted a PUC order in September that said trying to predict future greenhouse gas regulations is fraught with failure and uncertainty.
This is not the time to gamble with tens of millions of ratepayer dollars just to ensure a dirty energy future for Idahoans, Miller said.
Rocky Barker: 377-6484