Long-Awaited Decision A Compromise On Early Coal Plant Closures

Oct 3, 2019

In December of last year, Pacificorp released a presentation that shook several Wyoming cities and their state leaders. It was the first hint of the utility's 20-year Integrated Resource Plan (IRP) and it included the early closure of many coal plants including three in Wyoming.

About half of the proposed scenarios listed early retirement of the Naughton and Jim Bridger power plants; some as early as 2022 rather than 2029. This past spring, Kemmerer's Mayor Tony Tommassi said, "I thought, well, I'm seeing what it says, but this can't be real."

Today, exactly 10 months from that presentation, Pacificorp announced its preferred portfolio. Of the 50 possibilities, P-45, one scenario among many, would affect only two of Pacificorp's four Wyoming coal plants. Closure dates were not as early as initially expected.

Naughton Power Plant in Kemmerer: One of the largest taxpayers in Kemmerer, the Naughton plant employs 126 people. This plan would close two of the three coal-fired units four years early in 2025. The third unit would be converted to natural gas next year. In 2023, Pacificorp would initiative work into the potential sale of units 1 and 2.

Jim Bridger Power Plant near Rock Springs: The massive plant has four units. Two would close as the expected 2037. The others would close in 2023 and 2028. The sale process for the whole plant would begin in 2021.

Rick Link, director of structuring and pricing, said the scenario was chosen after 16 months of significant testing, deliberation, and community involvement. He added P-45 is in line with the utility's existing investments.

"This is a leap forward in continuing that momentum. Investments in wind and transmission, while at the same time adding very significant levels of new solar, and for the first-time battery resource technologies in our plan," he said.

Overall, Pacificorp's chosen scenario would reduce coal-fired generation by 2,800 MW by 2030. It closes 20 of 24 coal-fired units by 2038. The Gateway South transmission project would also be expanded dramatically, in addition to wind, solar and battery technology.

Link said the utility has done studies that show the early closure of certain units can generate hundreds of millions of dollars to the benefit of customers.

In Wyoming, the P-45 scenario would add 1,920 MW of wind capacity by 2024, 1,415 MW of solar and 354 MW of battery storage between 2024 and 2038 at existing plants.

Those are all massive increases to the existing capacity in the state. Earlier this year, Wyoming had just over 1,400 MW of installed capacity. In mid-2018, Wyoming only had 1.6 MW of installed solar capacity.

Shannon Anderson, a staff attorney with the Powder River Basin Resource Council, a landowners group, said this is a cautious recognition of market realities.

"It's recognizing that they need to do something on coal retirements, but just the complexity of their system makes that difficult. This is probably the least coal retirement you would see from the utility. Really what it does it just announce a few early retirements."

Local Impact

Pacificorp expects to implement an employee transition plan and community action plan in coordination with local leaders in both Rock Springs and Kemmerer: in 2021 and 2022 respectively.

For the community action plan, a company representative said the Department of Energy approved a grant to fund analysis of economic development opportunities "particularly in the Lincoln County area." He said that will get underway in the near-term. In the Rock Springs area, he said there will be a similar process with an action plan, but a committee will still need to be formed to lead the charge.

Rob Piippo, president and general manager of Kemmerer Operations LLC, commended Pacificorp for its work with the community, but he did push back. He said he doesn't agree with the results and that the plan threatens the future of Kemmerer mine.

"It's excruciating to me... they all deserve to get to retire like their grandfather did. And it's unfortunate that the results of this study aren't going to allow that to happen," Piippo said. "It's my guys, my people, my team, they're going to have to figure out how to put their lives back together when their way of life got destroyed in this."

Earlier in the hearing, Pacificorp's Link spoke to that point.

"We recognize that those coal facilities have been an importance resource in our portfolio for many, many years. Those employees have done nothing wrong that work there. They have done great things for this system. And the resources that will remain will play an important role going forward," Link said.

Later in the call, Link said the employee transition plan will be developed over time based on the community, but that there's no concrete date yet for those discussions.

SF 159 - State lawmakers passed a bill, SF 159 "New Opportunities For Wyoming Coal-Fired Generation" this past legislative session in response to Pacificorp's initial IRP presentation. The bill mandates an attempted sale of any coal plant slated to be retired.

Pacificorp's Link said that's not really a consideration in their long-term planning. For one, no official rules or regulations have been laid out to implement the legislation. He added it's unclear whether there would be a buyer or even it would be possible for them to procure the facility.

"From a modeling perspective, in effect, we're essentially assuming there is no successful buyer," Link said.

Next Steps

The final IRP won't be filed until October 18. After that, the Wyoming Public Service Commission will hold a public meeting following by an open comment period. The conversation on P-45 continues tomorrow, October 4.

Have a question about this story? Contact the reporter, Cooper McKim, at cmckim5@uwyo.edu.