Printed on: September 23, 2013

Idaho Power waits for Obama rules on existing plants

By Rocky Barker
Idaho Statesman

Proposed rules the Environmental Protection Agency released Friday to cut carbon pollution from new power plants to combat climate change won't affect Idaho Power and its customers.

The proposals apply only to new power plants. But President Obama did order the EPA to issue final greenhouse gas rules for existing plants no later than June 2015. Those rules could well decide the future sources of the electricity that lights Idaho homes and powers Idaho commerce.

Idaho Power owns one-third of the Jim Bridger coal plant in Wyoming and half of the Valmy plant in Nevada. It also is part owner of a coal plant in Boardman, Ore., that already is planned for closure because of environmental costs.

Idaho Power reviewed its Wyoming and Nevada coal plants earlier this year and decided to keep them for now.

"We don't know what (the president) is proposing," said John Carstensen, Idaho Power's engineering project leader. "We will evaluate the rules when they come out and we understand the particulars of them."

EPA Administrator Gina McCarthy said the Obama administration will begin an outreach program to hear public ideas about climate change, which she said is a public health issue as well as an environmental issue. That justifies regulating greenhouse gases under the Clean Air Act, an approach the Supreme Court has upheld.

"Climate change is one of the most significant public health challenges of our time," McCarthy said Friday. "By taking common-sense action to limit carbon pollution from new power plants, we can slow the effects of climate change and fulfill our obligation to ensure a safe and healthy environment for our children."


Coal and Idaho


Coal produces about 40 percent of the nation's electricity. But many utilities are replacing aging coal plants with natural gas, which at its current low price produces power for about the same price but with fewer greenhouse gases. Idaho Power gets about 42 percent of its electricity from coal.

Idaho Power has filed a request with the Idaho Public Utilities Commission to recover its investments in upgraded emission-control equipment required at the Wyoming Jim Bridger coal plant, which it owns with PacifiCorp.

The improvements would include installing controls to reduce nitrogen oxide emissions on two of the Bridger generating units. If allowed, the projected $130 million Idaho share would be amortized over several years, costing ratepayers about $18.8 million a year.

PacifiCorp, which owns two-thirds of the plant, has received preliminary approval from the Utah and Wyoming commissions to bill ratepayers for its share of the coal plant improvements.

Idaho Power filed its request with the Idaho PUC voluntarily, to provide an avenue for public debate about the coal decision, said Brad Bowlin, a spokesman for the utility. A hearing is scheduled Nov. 22.


Planning for more renewables, conservation


This week, the Idaho PUC accepted the Integrated Resource Plan from PacifiCorp for its customers in eastern Idaho, where it said it plans to continue depending on coal.

The commission offered no opinion on PacifiCorp's choices. But it did issue a challenge to the utility.

The PUC said forecasting coal costs is "fraught with failure and uncertainty" and references Obama's decision to impose additional regulation on fossil-fueled generation such as coal and natural gas to reduce greenhouse gases.

"In light of this contingency, it appears to be in the best interest of the company and its customers to continue to evaluate and devote more focus on the development of alternative energy resources," the three-member commission wrote.

The commission also told PacifiCorp to increase its efforts to move to higher levels of energy efficiency and demand reduction.

"Instituting cost-effective energy-efficiency measures that reduce customer demand benefits everyone," the commission said. "Such measures can obviate the need for new generation resources and thereby decrease the constant upward pressure on energy pricing."

Efficiency programs "are almost always preferable" to building new natural gas plants or buying power on the market, the commission told PacifiCorp.

The Idaho Conservation League, the Snake River Alliance and industrial customers have intervened in Idaho Power's coal case. Ben Otto, an attorney for the conservation league, said he was pleased with the commission's comments on PacifiCorp but not surprised, since the utility had ignored its own models that suggested energy efficiency was cheaper.


Idaho Power is writing its plan now


What does the PUC's challenge to?PacifiCorp mean for Idaho Power, which serves most of Idaho's electrical customers?

Idaho Power does take advantage of cost-effective energy efficiency and programs to manage demand during peak periods, Bowlin said.

The PUC has the authority to reject the two-year integrated resource plans, written by the utilities to guide their power-demand decisions. But it never has.

 Idaho Power has an advisory board it looks to as its draws up its plan development. The Idaho Power integrated resource plan is still open for public comment through Nov. 7. at the PUC.

IdaCorp CEO LaMont Keen told stockholders in May that Idaho Power has raised its 2015 objective for cutting carbon dioxide emissions to 15 percent. Idaho Power set a carbon-cutting goal in 2009 after a majority of stockholders urged the utility to reduce its CO2 emissions.

Keen and other Idaho Power officials have said the company will reconsider the decision on its coal plants in its next plan two years from now.

"A day will come when the coal plants that help power our lives need to be replaced," said Lisa Grow, senior vice president for power supply. "Idaho Power will be ready for that day, but retiring these sources of reliable, low-cost power prematurely would not be in our customers' best interests."