Letters from the West

Idaho Power wants to shut down Nevada coal plant in 2025

Idaho Power says it wants to shut down the North Valmy coal-fired electric plant in Nevada in 2025, 10 years earlier than previously planned.
Idaho Power says it wants to shut down the North Valmy coal-fired electric plant in Nevada in 2025, 10 years earlier than previously planned.

Idaho Power has signaled that it plans to shut down its North Valmy coal-fired power plant in 2025, 10 years earlier than previously planned.

The utility has asked the Idaho Public Utilities Commission to accelerate depreciation of the Battle Mountain, Nev., plant it owns with NV Energy. Idaho Power’s investment in the plant, approved by the PUC in the 1980s, is guaranteed to be paid for by its customers over the life of the plant.

If the PUC approves the accelerated depreciation, Idaho customers would pay their share of the company’s investment sooner than 2031 for one of the coal plant’s units, and 2035 for the other.

Idaho Power officials said the plant is operating mostly to meet peak power and reliability needs because its costs are higher than current electric power market rates. Even though studies showed Idaho customers would benefit from an earlier shutdown, the 2025 date works best in coordinating with its Nevada partner, the company said.

Overall this is an economic decision pushed in part by the cost of shipping coal to Nevada and the lower prices for alternative power from renewables, natural gas and other sources on the open market. Climate change and new federal carbon rules only play a secondary role.

Idaho Power is asking the PUC to essentially to have its customers pay off the plant more quickly than planned, likening it to a family paying off a home or car loan early and compressing the costs into a shorter schedule, Idaho Power officials said in its press release.

In its filing with the PUC, Idaho Power said Nevada commissioners already have ordered NV Energy to accelerate its depreciation based on a 2025 closing date. That’s also when Idaho Power expects to finish its Boardman-to-Hemingway high-power transmission line project, which will better connect Idaho to energy suppliers and markets on the West Coast. That will allow Idaho Power and other utilities to send and receive energy in response to market and power demands.

Studies done for Idaho Power’s long-term plan, which involves many of its customers and interest groups, showed that 2019 would be the cheapest shutdown date for Idaho Power’s customers, said Ben Otto, an energy attorney for the Idaho Conservation League. But clean-energy advocates like Otto recognized the utility’s need to coordinate the end-of-life date with its business partner.

Those advocates have sought to get Idaho Power to phase out all of its coal plants, which after Valmy would leave the Bridger Plant it owns with Rocky Mountain Power in Wyoming. IdaCorp CEO Darrel Anderson told stockholders in May he was “leaning against” investing in upgrades in Bridger, which would mean shortening the life of at least part of that plant. Climate change is the main issue for advocates who have been pushing the utility to get out of coal for nearly a decade. Burning of coal is a big contributor to greenhouse gases that contribute to climate change, and reducing coal emissions has become a primary aim of federal energy and environmental policy.

In its filing, Idaho Power also asked the PUC to adjust the depreciation rate for all of its capital assets, so that together customers would pay $35.2 million a year beginning June 1, 2017.The typical Idaho residential customer using 1,000 kilowatt-hours of electricity per month would pay $3.08 more a month, or a 3.1, percent rate increase.

Rocky Barker: 208-377-6484, @RockyBarker

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