Regulators won’t make Idaho Power customers pay for coal plant upgrade, yet

rbarker@idahostatesman.comDecember 2, 2013 

The Idaho Public Utilities Commission refused to automatically place in Idaho Power’s customer bills the costs of upgrading a Wyoming coal plant to meet environmental regulations.

The three-member commission did grant the utility a certificate that allows it to invest $130 million in environmental upgrades at the Jim Bridger coal plant. But it said putting the investment on ratepayers now might have made it more difficult for Idaho Power to pull back if even more federal or state emission controls make the upgrades no longer economical, the commission said.

“Because of the uncertain future of coal-fired generation, we find it unreasonable to prematurely commit ratepayer dollars to support Idaho Power’s investment,” the commission wrote. Approval of such treatment would provide the company with economic, social and political assurance it seeks, while leaving ratepayers to “bear the risk of environmental uncertainties.”

The decision pleased proponents of clean energy.

“That was the heart of our case,” said Ken Miller, clean energy program director at the Snake River Alliance. “Clearly we're gratified with the commission’s decision."

In its order, the commission referred to upcoming decisions by the Obama Administration to develop rules for existing power plants to regulate greenhouse gases by 2015. The commission referenced emissions rules on the two coal units where “a tipping point could be reached making them uneconomic."

“It is in the best interest of the customers, the company and the company’s shareholders for Idaho Power to be continuously analyzing the impact of changing environmental regulations on its upgrade project,” it wrote.

Bill Shawver, Idaho Power's corporate communications director, said the company still believes the environmental upgrades are the most cost-effective path forward for it and its customers.

“We certainly are analyzing and evaluating the order,” Shawver said. “We’re happy (with) the the decision to grant the certificate.”

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 plant’s majority owner. Utah and Wyoming already have approved its requests for the upgrade.

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.

The commission granted the certificate because opponents and the many customers who wrote and showed up for a hearing Nov. 25 couldn’t offer alternatives that could “reasonably and timely replace the value of energy and capacity that Bridger provides.”

“The suggestion … that renewable resources and energy efficiency could somehow replace Bridger’s ability to reliably provide energy and capacity is simply not realistic in the near-term,” the commission wrote.

It said Idaho Power’s baseload coal and gas plants help integrate renewable energy and are “critical to the reliable operation of the high-voltage transmission system in that they provide voltage and frequency support.”

But it also acknowledged that cleaning up the air is in the public’s interest.

“The detrimental effects of long-term coal use on human health, the climate, wildlife, land and water are well-documented,” it wrote. “However, Idaho Power’s analysis presented and (commission) staff’s investigation confirmed that investment in selective catalytic reduction controls is presently the least-cost, least-risk alternative to both reduce environmental effects and allow reliable electric service to continue.”

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