[ exact phrase in "" • ~10 sec • results by date ]

[ Google-powered • results by relevance ]

LOCATION/TYPE

News Home
Archive
RSS

Subscribe to RSS feed

Add NWW headlines to your site (click here)

Sign up for daily updates

Keep Wind Watch online and independent!

Donate $10

Donate $5

Selected Documents

All Documents

Research Links

Alerts

Press Releases

FAQs

Publications & Products

Photos & Graphics

Videos

Allied Groups

PGE and PacifiCorp face big headwinds on resource plans  

Credit:  By Ted Sickinger | The Oregonian/OregonLive | July 16, 2017 | www.oregonlive.com ~~

PacifiCorp and Portland General Electric pitched new resource plans to regulators last week that include major investments in renewable energy.

PacifiCorp’s $3.5 billion proposal entails building 1,100 megawatts of new wind farms in Wyoming, upgrading another 1,000 megawatts of existing windmills there to provide more power, and building a new transmission line to ease bottlenecks on the grid and bring all that green energy to market.

PGE touted a smaller but ambitious expansion that would have it build or buy power from the equivalent of a 525-megawatt wind farm in the Columbia River Gorge – the largest single addition to its renewable energy portfolio to date.

Both companies are trying to create a sense of urgency among regulators. They insist they need to act now to capture federal production tax credits that could cover 25 percent of the wind farm costs, but are set to expire in 2020. The additions would also put them on a faster compliance path with state renewable energy mandates, and move them toward decarbonizing the grid – ostensibly a big priority for Oregon leaders and customers.

PacifiCorp dubbed its plan the “Energy Vision 2020 project.” PGE, meanwhile, called its strategy a “no-risk, no-regrets” way to move more quickly toward the state’s mandate of 50 percent renewable energy by 2040.

Yet outside stakeholders, including environmental groups that are typically gung-ho about such investments, are balking. They don’t have quite the same vision and believe there may be big regrets if the utilities move forward as planned.

The consternation highlights the sweeping changes and deep uncertainty that have overtaken an industry known for its boring predictability. A massive influx of renewable energy on the West Coast, particularly solar power in California, is fundamentally changing electricity markets and products in the region. Coupled with shifting customer preferences, a push toward more unified transmission markets, distributed generation, energy storage technologies, electric vehicles, energy efficiency efforts and global warming regulation, the industry is facing more change in a decade than it has seen in the last half-century.

Its traditional business model – building big, long-lived and centralized plants that run on fossil fuels to meet customers’ needs – is fast disappearing. But the alternative still isn’t clear, wreaking havoc on the “least-cost, least-risk” planning process on which utilities and regulators have relied.

“It’s a mess,” said Bob Jenks, executive director of the ratepayer advocacy group, Citizens’ Utility Board of Oregon. “There is no consensus on energy policy.”

In Oregon, all of this is playing out before a relatively new and untested set of commissioners at the Public Utility Commission.

A RADICALLY DIFFERENT VISION

PacifiCorp reviewed its plan Monday during a commission workshop in Salem. It faced a tough audience, as the regulatory staff, industry, environmental and ratepayer groups which commented on the plan say the utility had already pulled a bait and switch.

PacifiCorp held a series of public meeting from June 2016 to March 2017 to solicit input on the first draft of its resource plan before submitting it to regulators. That plan included no new resource acquisitions for more than a decade.

But after wrapping up those meetings, the company unveiled a radically different Energy Vision 2020 with major investments in wind. The last-minute swap gave outsiders little time to look under the hood. And now that they have, they’re not sure they like what they see.

Though the Portland-based utility claims its early purchase of the renewables will save ratepayers money, PUC analysts point to a fairly basic issue: for the next decade, PacifiCorp doesn’t need the energy, either to meet customer demand or comply with state renewable mandates.

Meanwhile, the industry continues to see rapid technological changes and price drops that make the savings uncertain.

It’s an expensive plan, with a big chunk of the cost tied up in the 140-mile transmission line that will solve some congestion problems in Wyoming. But several stakeholders think it would be cheaper for PacifiCorp to close its Dave Johnston coal plant there, freeing up the same capacity at a lower cost.

Coal still makes up the heart of PacifiCorp’s power plant fleet – a basic sticking point for Oregon, which passed a law last year banning the import of electricity from coal-fired power plants by 2030.

The company plans to retire some units in the next decade but plans to keep running the Dave Johnston plant until 2027, and others for two decades or more while gradually shifting to natural gas and renewables. The company says it makes economic sense to run the coal plants, even with a price on carbon. And it says it has learned to ramp them up and down – coal plants typically run flat out – to integrate renewable power from both its own resources and from California. That flexibility, it says, allowed it to reduce emissions by 12 percent last year.

But that’s not a popular plan in Oregon.

The Sierra Club maintains that 40 percent of PacifiCorp’s coal fleet is already non-economic compared with other resources. It says the utility is becoming an outlier in the West – the one that believes it can continue to rely on coal while others move aggressively toward alternatives. PacifiCorp is suing the Environmental Protection Agency to overturn regional haze regulations that would require the installation of expensive pollution controls to keep many of its aging units running.

“They’re doing some magical thinking around regional haze and assuming they won’t have to comply with it,” said Amy Hojnowski, who represents the Sierra Club’s Beyond Coal campaign. “Even without those rules, 40 percent of the coal units are non-economic. …We support early action on renewables, but without a full assessment of their existing coal fleet, we can’t really tell what’s least-cost, least-risk way to move forward.”

PacifiCorp doesn’t require approval from state regulators to move forward with its plan, but runs the risk of having investments disallowed if it ignores their concerns. Still, it has to please regulators and customers in the six states where it operates, many of which have very different priorities than Oregon.

A SENSE OF URGENCY

PGE, on the other hand, does all its business here and wants regulators’ blessing for its plan. Its resource needs are also more pressing, driven by the looming retirement of its coal plant in Boardman at the end of 2020. Regulators are set to deliver a decision on its plan within a month.

The company initially asked regulators to endorse a plan to acquire more than 800 megawatts of “generic capacity” resources through competitive bidding. PGE planned to join that process with a proposal to build two new gas plants at the Boardman site. The plan also included the new wind resources, energy efficiency and additional demand management programs.

It did not go well. Environmentalists, ratepayer advocates, independent power producers and PUC staff excoriated nearly every element in the plan and recommended that commissioners not acknowledge most of it.

PGE has since suspended its permitting efforts on the Boardman gas plants. It lowered its projections of demand growth. It said it had reached a tentative agreement with a hydroelectric supplier that would satisfy some of its capacity needs, and has a variety of solar contracts in the works.

But the utility is still trying to light a fire under commissioners, insisting it needs more than 500 megawatts of new capacity by 2021. It has started bilateral negotiations with a number of parties to meet those needs by purchasing power from existing resources – whether a gas plant, hydroelectric providers or other resources. But it needs a waiver from competitive bidding requirements to buy or contract for any of those resources, and there’s no guarantee it will meet all of its needs. If the negotiations fall short, it wants permission to start a new competitive bidding process to fill the gap, which could revive its own proposal to build a gas plant at Boardman.

In the meantime, it wants to solicit bids for the new renewable resources.

There are concerns across the board. Critics says PGE’s action plan is too vague for regulators to acknowledge at all. Environmentalists and ratepayer advocates are concerned that in the end, PGE will come back with a proposal to buy or build another gas plant.

“The gas plant they brought on last year has a 45-year life,” Jenks said. “That’s 2060. I don’t know what the world looks like in 2060. I don’t know why they’re not doing deals that have a shorter lifetime, that give us more flexibility where we go in the future.”

Megan Decker, who was appointed to the commission in April, asked PGE whether there was any risk to reliability if the commission decided to acknowledge only part of its capacity need.

PGE’s response: It’s not the only utility in the region looking for capacity. Some 3,000 megawatts of coal plants are scheduled to be shuttered in the near term.

“If you don’t secure capacity in that window, you’re exposing your customers to the spot market or power not being available,” said Franco Albi, who manages the company’s resource planning.

Commissioner Stephen Bloom, the longest serving of the three commissioners, had a fairly sharp response to that: “We’re not in an emergency situation. We’ve known about Boardman for a long time.”

PGE is facing similar blowback on its renewables plan. Like PacifiCorp, it doesn’t need the power to meet state renewable energy mandates for another decade, and has a big bank of renewable energy credits that it can draw down for that purpose. And unfortunately, the output of a new wind farm isn’t predictable enough to solve its capacity problem.

There was little indication last week what the commission would decide to do with PGE’s plan, or whether the utility is prepared to move forward regardless.

Robert Kahn, executive director of the Northwest & Intermountain Power Producers Coalition, says regulators need an entirely new approach to resource planning. His organization represents independent power producers and backed a bill that passed this legislative session requiring the commission to explore potential changes to the regulatory system in light of the changes overtaking the industry.

The question, he said, is “how do you justify any of this when the entire world is changing.”

[rest of article available at source]

Source:  By Ted Sickinger | The Oregonian/OregonLive | July 16, 2017 | www.oregonlive.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

Wind Watch relies entirely
on User Funding
Donate $5 PayPal Donate

Share:


News Watch Home

Get the Facts Follow Wind Watch on Twitter

Wind Watch on Facebook

Share

CONTACT DONATE PRIVACY ABOUT SEARCH
© National Wind Watch, Inc.
Use of copyrighted material adheres to Fair Use.
"Wind Watch" is a registered trademark.
Share

Wind Watch on Facebook

Follow Wind Watch on Twitter