After months of environmental groups' claims that PacifiCorp was hiding the true economic picture of its coal-fired generation, the company presented an updated analysis showing that its customers could save money if four units at the Naughton and Jim Bridger plants in Wyoming are retired early, the utility said in a Thursday public presentation.
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The Berkshire Hathaway Energy subsidiary did not conclude what the least-cost way to retire those units and other coal facilities would be, because the utility must complete additional resource portfolio studies before submitting its final 2019 Integrated Resource Plan to regulators in the states it serves by August 1. The analysis also considered the possible retirement of five more units at three other coal plants, indicating lower potential savings for those.
Western Resource Advocates, an environmental group, said coal plants are becoming increasingly uneconomic as the price of power from renewable sources continues to fall. "Customers in all Western states will be best served by PacifiCorp replacing aging coal units with renewable energy resources that are cost-effective and reduce harmful carbon emissions that drive climate change," the organization's attorney Sophie Hayes said in a statement.
The PacifiCorp study shows Naughton units 1 and 2 and Jim Bridger units 1 and 2, in which the utility is a majority owner and operator of both plants, are candidates for early retirement because they are less economic than other resources to operate beyond 2022.
Yet, the company said it is mindful of the impact on communities and employees that would result from closing those units.
"The timing and sequencing of any actual coal unit closures will ultimately be determined by a range of factors that also include workforce and community transition considerations," PacifiCorp said in a press release.
The utility's next steps will include evaluation of alternative operational scenarios, such as assessing state rules for acquiring new resources and needs for transmission upgrades.
The utility also pointed to natural gas pipeline delivery risk in considering gas-fired resources for replacing coal. Variable energy resources, primarily wind and solar, were modeled with fixed hourly generation profiles, but the intermittency of renewable generation adds uncertainty, PacifiCorp said.
Carbon dioxide emissions reductions counted heavily in the overall benefits associated with accelerated retirements. PacifiCorp also ran models on retiring Dave Johnston unit 3 in Wyoming, Craig (Yampa) units 1 and 2 in Colorado and Hayden units 1 and 2 in Colorado.
The analysis did not take into account the health benefits due to cleaner air and water that would result from replacing coal with renewable energy and battery storage, said Sierra Club's Beyond Coal Campaign Representative Christopher Thomas. The organization fought for the public release of the coal plant economics information.
"This just adds to all the numbers we're seeing across the country that show clean energy is a far better deal than coal, and PacifiCorp's analysis doesn't even account for the benefits to our environment and public health from burning less coal," Thomas said. "PacifiCorp finally seems to be coming to grips with the fact that coal just doesn't make economic sense anymore."
-- Jeff Stanfield, S&P Global Market Intelligence, email@example.com
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