Western coal-burning giant embraces wind

Source: Benjamin Storrow, E&E News reporter • Posted: Monday, May 7, 2018

A Western utility giant has so much wind that it has begun to turn its back on fossil fuels.

PacifiCorp, a Portland, Ore.-based utility serving six Western states, said this week it has no plans to build new natural gas plants in the coming decades. Instead, the company is embarking on a wind binge, with plans to install enough turbines to power 400,000 homes by 2020.

The announcement marks a first for PacifiCorp. In the past, the company’s long-range plans always included some call for new fossil-fuel-fired generation. Now, that’s changing.

“With reduced loads and lower renewable resource costs, the updated preferred portfolio contains no new natural gas resources through the 20-year planning horizon,” the company wrote in an update to its Integrated Resource Plan, as its long-term outlook is known. “This is the first time an IRP has not included new fossil-fueled generation as a least-cost, least-risk resource for PacifiCorp.”

PacifiCorp is hardly unique. Stagnating demand for electricity, the falling price of wind and solar, and increased cooperation among power companies have seen utilities across the West retire coal plants in favor of renewables in recent years, said Robert Godby, a professor who studies power markets at the University of Wyoming.

In Colorado, Xcel Energy Inc. is considering a plan to close two coal units early and replace their power with wind, solar and natural gas. Two units at Montana’s Colstrip Generating Station, one of the West’s largest coal plants, are now slated for early retirement. And industry interests are scrambling to rescue the coal giant of the Southwest, Navajo Generating Station, after its utility owners voted to close it next year.

“The wind is blowing toward renewables,” Godby said. “The question is what it’s going to look like.”

Environmentalists were quick to praise PacifiCorp’s investments in renewables but contend the company’s efforts are less impressive than they may initially appear.

Coal accounts for roughly 60 percent of PacifiCorp’s fuel generation today. It would still make up 45 percent of the utility’s power generation in 2025 and slightly less than 40 percent in 2030, even with the new wind power called for in the company’s long-term plans.

“They’re talking about building a ton of stuff without taking a ton of stuff offline,” said the Sierra Club’s Marta Stoepker. “You have to wonder what that means for consumers.”

Noah Long, the legal director for the Natural Resource Defense Council’s Western energy program, said he suspects PacifiCorp’s coal units are already teetering on the edge of profitability. It will ultimately be up to state regulators to push the company on whether it makes sense to keep those plants in operation, he said.

“I think to some extent they are delaying the conversation about their coal as long as they can,” he said. “In the meantime, they’re probably perfectly happy to have their customers effectively pay above-market rates to keep those coal plants running.”

Whether state regulators are up for that debate remains to be seen. PacifiCorp serves Oregon, Idaho, Utah, Washington, Wyoming and a sliver of California. Coal remains a liability for the company in states like Oregon, which enacted a law to wean itself off PacifiCorp’s coal fleet by 2030. But regulators in coal-reliant states like Wyoming and Utah are less likely to look favorably on the closure of coal units.

The wind may be blowing in renewables’ favor but just how far it will carry PacifiCorp remains to be seen.