Idaho Power Customers Won't Pay For Coal Plant Pollution Controls ... At Least For Now


A week after opponents of coal-fired electricity flooded the chambers of the Idaho Public Utilities Commission, regulators have denied a bid by Idaho Power to charge its customers $130 million to help implement mandated pollution controls for two of four generators at the Jim Bridger coal plant near Rock Springs, Wyo., where the utility company is part owner.

The following is an excerpt of the PUC's Dec. 2 decision:

“The detrimental effects of long-term coal use on human health, the climate, wildlife, land and water are well-documented. However, Idaho Power’s analysis presented and (commission) staff’s investigation confirmed that investment in selective catalytic reduction controls is presently the least-cost, least-risk alternative to both reduce environmental effects and allow reliable electric service to continue.”

As Idaho Power sticks with coal, however, ratepayers won’t be footing the bill, at least for now:

“While the commission granted the certificate, denial of binding ratemaking treatment means the commission will be able to review costs as the project progresses,” wrote Gene Fadness, a commission spokesman, in his press release about the ruling Monday, which quoted the commission’s decision. “Because of the uncertain future of coal-fired generation, we find it unreasonable to prematurely commit ratepayer dollars to support Idaho Power’s investment.”

Approval would have provided “the company with economic, social and political assurance it seeks, while leaving ratepayers to “bear the risk of environmental uncertainties,” Fadness said.

The ruling is being seen by many who protested the application last week as a moment of breathing room in a race for the planet to come up with alternatives to producing electricity in place of so-called “thermal fuels.”

“This is, quite literally, a breath of fresh air,” said Snake River Alliance Executive Director Liz Woodruff. “Idaho Power’s customers have spoken. They no longer want to be responsible for the harm to human health and our climate that these plants and their owners are responsible for. Idahoans want cleaner energy instead.”

Idaho Power isn’t likely to turn the lights out at the Bridger plant any time soon, however, nor does it mean customers won’t face future charges for the upgrades.

Majority stakeholder in the plant, PacifiCorp, owned by Berkshire Hathaway, has already received the go-ahead in Wyoming and Utah to install the controls designed to curb nitric oxide and nitrogen dioxide, known for their harmful environmental and health effects. Fadness said Idaho Power and PacifiCorp would likely seek approval to charge for the upgrades through future “rate case” applications that are a regular part of maintaining power generation facilities.

The Bridger power plant delivers about one fifth of Idaho’s electricity (350 megawatts). The facility burns approximately 8 million metric tons of coal annually to generate power that is delivered to six states. It’s enough coal to essentially bury downtown Boise each year, according to the Sierra Club, which is an ardent opponent of burning coal in the long term. They led the vocal protest at last Monday’s hearing with more than 30 public comments against approval of Idaho Power’s “certificate of public convenience and necessity” application. The plant continues to be a cost-effective source of electricity largely because coal is delivered on a 2.6-mile conveyor belt from an adjacent mine and not shipped long distances by diesel-powered locomotives.

“The commission emphasized that the “public interest is paramount,” in considering Idaho Power’s application,” wrote Fadness. Idaho Power says it voluntarily filed the application for pre-approval to gauge public scrutiny of producing electricity with coal. Response has been strong.

“It’s becoming awkward for Idaho Power to cling to coal, because coal is a loser in every possible way,” Woodruff said. “The only argument we hear from coal plant supporters is that it’s cheap, but those days are numbered and every utility, including Idaho Power, knows it.”

State by state, coal plants are being shuttered due to the financial costs of operation within the bounds of existing and anticipated pollution control requirements, but fixes at the Bridger plant are still more economical than instituting large scale renewable systems argues Idaho Power in its 2013 Integrated Resource Plan.

But groups like the Snake River Alliance and the Idaho Conservation League say the utility is not characterizing the long-term costs of coal in a genuine way since future environmental policy is unclear. Detractors say it's time, considering the environmental ravages of global climate change, to wean consumers off of the polluting resource more quickly. According to testimony given at the PUC public hearing last Monday, it is counter to public opinion and the public good to continue patching an out-dated technology. But, for now Idaho is still stuck with a portion of coal to power its electricity demand.

“Without the upgrades, which are being required to meet Clean Air Act regional haze rules, the coal units would be forced to cease operation by December 2016 and that is not in the public interest,” said the commission. “Cost-effective replacement resources that are dispatchable and reliable year-round do not presently exist nor could they be brought on line before the required dates.”

The Sierra Club and others believe that the bridge to renewables and non-polluting sources of electricity that are reliable may be a stretch in the short term, but it is a stretch worth making, especially since regulation of carbon dioxide emissions could one day shut down coal plants across the board anyway. Upgrades would be a waste of money.

“What we have been saying all along is not to shut down the coal plants tomorrow, but other utilities are doing it successfully,” said Zach Waterman, director of the Sierra Club’s Idaho chapter. He suggested that demand reduction and instituting various efficiencies could help balance the equation until alternatives are in place rather than getting in deeper with coal. “We don’t think the analysis used to support sticking with the coal plant makes sense.”

Waterman said the crux of the argument is that Idaho Power is relying on a supply-side comparison—the cost of maintaining coal versus installing natural gas, rather than taking into account all that could be done on the demand side in terms of conservation and efficiency until viable alternatives are in place.

“The public spoke up. We are very glad that the public utilities commission is giving us an opportunity,” Waterman said. “Our members are glad that we have more time to look at this rather than put all our eggs in the coal basket.”

In the ongoing debate over whether the external and financial costs of burning fossil fuels still makes sense for people and the planet, most parties agree that if the Bridger units are kept in operation now, it will make it harder to stop supporting them when additional environmental protection requirements to curb sulfur oxide, particulate matter, ozone, mercury, and ultimately carbon dioxide come along. More environmental protection measures at coal plants will equal more cost for the consumer—much greater costs than Idaho Power is leading on, according to testimony heard last week and cited in the commission’s report.

A forward-looking strategy is now back in Idaho Power’s court.

Spokesman for Idaho Power, Brad Bowlin, said Monday that the company must now evaluate how it plans to proceed with the Bridger plant in light of the commission’s decision.