IEEFA U.S.: Idaho Power IRP should be required reading for Wyoming regulators, politicians
Idaho Power’s latest revision of its 2019 integrated resource plan (IRP) charts the utility’s direction through 2040 but is likely to have the greatest impact in neighboring Wyoming in the next year or two.
The IRP has Idaho Power being coal-free by 2030 and carbon neutral by 2045. This has major implications for Wyoming because Idaho Power owns one-third of each of the four units at the 2,111-megawatt (MW) Jim Bridger Power Plant—the largest coal-fired generating station in Wyoming. Idaho Power’s IRP sets 2022, 2026, 2028 and 2030 as the deadlines for relinquishing its stakes in the four Bridger units, at least six years earlier than proposed in its 2017 IRP.
The economics are favorable for exiting five of seven coal-fired generating units by the end of 2026
Unit 1 came online in November 1974; Unit 2 followed a year later. Both units face required emissions-control investments to deal with regional haze issues, making them the logical choice to go first. The current IRP submission is Idaho Power’s third version and second IRP revision this year, but it reiterates the company’s original analysis, which “indicates favorable economics associated with Idaho Power’s exit from five of seven coal-fired generating units by the end of 2026 and exit from the remaining two units at the Jim Bridger facility by year-end 2030.”
Idaho Power acknowledges its ownership share in the plant provides system reliability benefits, particularly for its participation in the energy imbalance market that now includes most utilities in the western U.S. Still, its analysis, upon which it bases its IRP update and in which it started with a baseline retirement date of 2034 for all four units, shows the best economic choice involves early coal plant retirements.
“The economics of coal plant ownership and operation remain challenging because of frequent low wholesale electric market prices coupled with the need for capital investments for environmental retrofits,” the analysis states. “Moreover, the evaluation of exiting from coal unit participation is consistent with the company’s expressed glide path away from coal and long-term goal to provide 100 percent clean energy by 2045.”
Another key finding in the revised IRP filed on Oct. 2, is the “cost competitiveness of PV solar.” The revised 2019 IRP has 120 megawatts of solar online by the end of 2022; the 2017 IRP had none.
IDAHO POWER’S SHIFT COMES ON THE HEELS OF AN ALMOST IDENTICAL ONE HAPPENING AT PACIFICORP, which even more than Idaho Power has been a mainstay of the Wyoming coal-mining economy. The analysis in Idaho Power’s IRP should be mandatory reading for Wyoming regulators and policymakers, who have vociferously opposed plans by PacifiCorp to schedule early retirement of many of its coal-fired generating stations. This opposition surfaced most recently last month (a week after the revised Idaho Power IRP was filed) at a Wyoming Public Service Commission (PSC) meeting called to release its internal “investigation” of PacifiCorp’s 2019 integrated resource plan. Similar to Idaho Power’s findings, PacifiCorp concluded that the most economical path for supplying electricity to ratepayers entails a significant buildout of solar, wind and battery storage resources, coupled with the retirement by 2030 of 16 of its coal-fired generating units (eight of which are located in Wyoming).
Despite the detailed economic analysis in PacifiCorp’s IRP, Wyoming PSC Chairwoman Kara Fornstrom, an energy transition skeptic, said at last month’s hearing that “the commission must be provided the best information possible, free of hypotheticals and perceived bias … The state has to have confidence in the analysis used to support the action plan.” Similar doubts have been voiced repeatedly by state legislators and Governor Mark Gordon since the release of PacifiCorp’s IRP.
The problem for Gordon, Fornstrom and other Wyoming officials who are resisting market changes is that these analyses are grounded in economics, not hypotheticals or biases. And the reality is that the financials today point clearly toward renewables and storage—not coal.
The problem for Wyoming officials is that these analyses are grounded in economics, not hypotheticals or biases
These diverging economic trends are visible in the state’s own tax collection data. Carbon County posted the strongest growth in sales and use taxes between August 2019 and 2020, with receipts increasing more than $3.6 million. Carbon County is the site of a 3,000MW wind project being built by Power Company of Wyoming. At the other end of the spectrum, receipts in Campbell County, the home of the North Antelope-Rochelle and Black Thunder mines—the two largest coal-producing facilities in the U.S.— fell more than $2.5 million during the same period.
Wyoming will be hit hard by the rapid transition away from coal as a generation resource for utilities. It is home to much of the Powder River Basin, whose production has powered coal-fired power plants across the country for years. The 10 coal-fired power plants in Wyoming, with roughly 6,000MW of capacity, ship their generation mostly outside the state’s borders—to utilities and states that are looking to exit the sector.
As difficult as the transition will be for local economies built on coal, denial will not help. Utilities are required to provide reliable electricity at the lowest cost possible, and coal no longer meets this mandate. Wyoming’s leaders should be working with PacifiCorp and other utilities to plan for a just transition around policies that confront the truth head-on, rather than continuing their shoot-the-messenger approach. A good first step would be to read Idaho Power’s revised IRP.
Dennis Wamsted is an IEEFA analyst and editor.
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