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PacifiCorp, Replacing Coal with Renewables

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In recent years, mandates requiring utility companies to keep emissions and electricity prices low have made wind and solar more and more appealing.  PacifiCorp, one of the west's largest utilities, will retire 16 of its 24 coal units earlier than originally planned.  According to an E&E News review of EPA emissions data, the units scheduled for retirement accounted for almost half of the utilities’ carbon dioxide emissions between 2008 and 2018.  The Portland-based power company plans to replace the majority of that coal-generated power with 3,000 megawatts of solar, 3,500 MW of wind and 600 MW of battery storage.  The plan emphasizes the need to transition away from coal-fired power plants for the interest of saving ratepayers substantial costs down the road.  "The primary drivers behind this transition really stem from opportunities to explore new resource technologies that frankly are simply more cost effective and being able to meet our customers' needs with a reasonable cost and reliably," Rick Link, a PacifiCorp executive commented.  Not everyone is pleased with these proposed changes.  While Oregon and Washington have passed legislation aimed at ending coal use, Wyoming is attempting to keep its coal industry standing.  The plan would close two units at the Jim Bridger plant in western Wyoming, the largest coal facility in PacifiCorp's fleet and among the biggest in the nation.  If approved, PacifiCorp’s Integrated Resource Plan through 2038 would create a ripple affect likely to impact the entire state.  "What we are basically seeing is the beginning of the end of coal mining in southwestern Wyoming, which has gone on since before statehood." said Rob Godby, an economist at the University of Wyoming.   How well are other states taking the news? How will the power company meet the challenges of a transition this size?

Nevelyn Black's picture

Thank Nevelyn for the Post!

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Matt Chester's picture
Matt Chester on Oct 7, 2019 9:17 pm GMT

Thanks for sharing, Nevelyn.

This Pacificorp news has been hot across Energy Central recently-- here are some places to read more of what our community thinks: 

https://www.energycentral.com/c/cp/wyoming-solar-capacity-increase-1300-under-pacificorp-plan

https://www.energycentral.com/c/cp/rocky-mountain-power-releases-new-20-year-plan-including-more-renewables-less

Bob Meinetz's picture
Bob Meinetz on Oct 8, 2019 4:45 pm GMT

Disappointing, Nevelyn, that some accept PacifiCorp's promises at face value, despite a long history of broken ones. In 2014 PacifiCorp/Berkshire Hathaway Energy's CEO, Warren Buffett, let the cat out of the bag:

"'For example, on wind energy, we get a tax credit if we build a lot of wind farms,' Buffett said. 'That’s the only reason to build them. They don’t make sense without the tax credit.'”

Translation: PacifiCorp is not charging taxpayers to fight global warming but to increase returns for its investors, apparently harboring the belief the country's top 2% aren't rich enough.

In California's Energy Imbalance Market (EIM), state regulators have no way to verify whether electricity coming from PacifiCorp is being generated by wind turbines, solar panels, gas plants, or coal plants - and frankly, they don't want to know. It's a comfortable deception on both ends of the transaction, a "win-win". Or if we include the environment, a "win-win-lose".

Matt Chester's picture
Matt Chester on Oct 8, 2019 9:44 pm GMT

I mean, that was the point of the tax credit, was it not? To make building out wind farms at the time (5 years ago) more economically enticing for companies. And now in 2019 as those tax credits are set to expire, those tax credits have done their job and there's a load of wind generation capacity built up. I fail to see how tax credits working exactly as intended should be a negative thing?

Here's more to that story:

MidAmerican began purchasing wind turbines about 15 years ago ostensibly to help hedge against energy prices, but Buffett said in 2014 the “only” reason to build wind power was to take advantage of tax subsidies.

“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,” Buffett told an audience in Omaha, Neb. in 2014.

“For example, on wind energy, we get a tax credit if we build a lot of wind farms,” Buffett said. “That’s the only reason to build them. They don’t make sense without the tax credit.”

MidAmerican CEO Bill Fehrman reiterated that statement in 2016 when the company announced a goal of generating 85 percent of its power capacity from wind energy.

“Because of the tax credits and our ability to deliver these projects at a low cost, we’re setting up our customers for a low-carbon future,” Fehrman told The Wall Street Journal in 2016.

Buffett and Fehrman are referring to the Wind Production Tax Credit (PTC), which is set to expire in a few years. The tax subsidy initially shelled out $24 per megawatt hour to wind producers for the first 10 years of operation, but subsidies began to be reduced in 2017.

MidAmerican will reach 100 percent green energy in 2020 when it completes a $922-million wind farm, Reuters reported. (RELATED: California, Texas Face Rolling Blackouts If Summer Heat Stresses The Grid)

Iowa has been one of the biggest beneficiaries of wind tax subsidies. The state got 37 percent of its electricity from wind power in 2017, and exported wind energy to other states with mandates to use green energy.

Joe Deely's picture
Joe Deely on Oct 8, 2019 11:48 pm GMT

Bob,

You made a couple of really good points in your comment.

"They don’t make sense without the tax credit.'”

PacificCorp has said they plan on building 3,500 MW of wind by 2025. If what you say about tax credit is true - then they will want to front load all of those wind projects to be completed by end of 2020 when the tax credit expires. According to the rules they will also have to start construction on these wind projects before the end of 2019.  Nice.

Your comment about EIM is also a good one. A lot of folks don't realize how much electricity moves around in the Western grid. With most of the coal being removed from the PacificCorp mix - the entire Western grid becomes cleaner - including California.

CAISO and CARB will need to adjust downwards the emission rates they use for unspecified imports. Reported CO2 for CAISO and overall CA will continue to drop further.

 

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