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PacifiCorp plans early exit from Colstrip | News

By October 4, 2019 No Comments
PacifiCorp plans early exit from Colstrip | News

Colstrip Power Plant stakeholder PacifiCorp has become the third utility owner to plan a 2027 exit from the power plant.

The Oregon-based utility released a draft plan Thursday for where it plans to get its electricity for the next 20 years. The plan entails early retirement of 16 coal-fired units in the next 11 years, while new wind and solar energy projects are constructed.

The biggest acceleration in coal power plant retirement dates was for Colstrip Units 3 and 4. PacifiCorp had previously anticipated the southeastern Montana units running until 2046. Two other Colstrip Power Plant owners, Puget Sound Energy and Avista Corp., had already chosen to be financially ready for shut down by 2027.

“This was a situation where, because we are a minority owner, we had to line up with their depreciable lives and their date was 2027,” said Spencer Hall, PacifiCorp spokesman.

PacifiCorp’s modeling for the best Colstrip retirement was based on information gathered in September 2018. At that point, Puget and Avista had both settled on the end of 2027. Those plans are likely to have changed, given that Washington legislators passed a climate change law this spring that bans coal power in 2025. Those new terms were not included in PacifiCorp’s decision making, Hall said.

In a Thursday announcement, Rick Link, PacifiCorp’s vice president of resource planning and acquisitions said the decision to retire the coal power plants and develop 7,000 megawatts of renewable energy generation by 2025 was based on cost. Renewables were cheaper.

“With a focus on lower-cost renewable resources and strategic transmission investments, this plan allows us to continue to deliver the reliable and low-cost energy our customers need as we embark on a phased and well-managed coal transition that minimizes impacts to our thermal operations workforce and communities,” Link said.

Recently, PacifiCorp received approval to begin building a 114 turbine wind farm in Carbon County near Bridger. The $406 million project is expected to generate enough power to electrify more than 76,000 homes. The energy will be transmitted out of state on a 250-kilovolt power line that services Yellowtail Dam. PacifiCorp owns the line.

Since 2016, four of Colstrip Power Plant’s six co-owners have made plans for early exits. In addition to Puget, Avista and PacifiCorp, Portland General Electric plans to exit Colstrip by 2035. Portland General Electric’s exit is driven by an Oregon state law setting deadlines to end coal power in the 2030s.

Although Portland General Electric has until 2035 to cut the cord on coal power, the company confirmed to Lee Montana Newspapers last week that it would be financially ready to exit by 2030.

PacifiCorp, has customers in six states including Oregon, was under deadline to drop coal power in its home state by 2030, but because it had the ability to sell coal power elsewhere, the deadline wasn’t a driving force behind it’s early exit from Colstrip.

Combined, the four utilities exiting early have 70% ownership of Colstrip Units 3 and 4. The remaining owners are Talen Energy, of Pennsylvania and South Dakota-based NorthWestern Energy, which is also Montana’s largest regulated monopoly utility. Talen owns a 30% share in Unit 3. NorthWestern owns a 30% share in Unit 4.

While Talen in recent years has said it is losing money on the power plant, which it is also paid to operate, the company has not indicated whether it’s willing to join the other four owners of Unit 3 for early retirement. Talen did announce with Puget Sound Energy in June that it will close Colstrip Units 1 and 2 this December. Talen and Puget have equal ownership of the units, which they decided were no longer economical.

NorthWestern Energy has been resolute that Unit 4 will remain operational until 2042.

Colstrip Power Plant stakeholder PacifiCorp has become third utility owner to plan a 2027 exit from the power plant.


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