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Regulators wrestle with PGE, PacifiCorp over billions in new renewables  

Credit:  By Pete Danko, Staff Reporter | Portland Business Journal | Oct 11, 2017 | www.bizjournals.com ~~

Portland General Electric is downsizing its ambitions and PacifiCorp is facing vigorous opposition as Oregon regulators continue to wrestle with plans by the investor-owned utilities to spend big money on new renewables.

The regulator qualms, shared by some stakeholders, aren’t with renewables so much as the utilities’ desires to make massive investments in the next few years.

PGE, rebuffed on a potential $1 billion wind power buy two months ago, on Tuesday outlined a “new path forward” to the Public Utility Commission that reduces the scope of their proposed procurement by about 40 percent while offering mechanisms intended to protect ratepayers from paying above market costs for renewables.

Utility officials said they were optimistic about gaining consensus with stakeholders on the new plan and PUC commissioners said they were eager to see the finished product. The utility said it expected to file an addendum to its integrated resource plan, which was approved in August without the renewables component, by the end of the year.

The news was less encouraging for PacifiCorp and its IRP, the every-other-year blueprint for meeting long-term resources needs in a “least-cost, least-risk” manner. In the IRP process, the regulated utilities look for “acknowledgement” of their plans, which can be advantageous down the road as they make the case for recouping their investments through rates.

But on Friday, PUC staff, in final comments on PacifiCorp’s IRP, recommended the commission not acknowledge the utility’s plan to spend more than $3 billion on new wind power, retooled existing wind farms and new transmission. PacifiCorp calls the plan “Energy Vision 2020,” and it has drawn varying levels of support from renewable energy advocates.

The heart of the staff critique – signaled in an earlier analysis this summer – is that PacifiCorp hasn’t demonstrated a need for the resources: “PacifiCorp currently has a clear, least-cost, least-risk path to serving customers without the new major resources,” the staff said.

Rick Link, PacifiCorp’s vice president for resource and commercial strategy, said that’s not true.

“What these wind resources do is replace market purchases,” Link said. “We have described this as an economic opportunity, and that’s been a big focus, but maybe the full story hasn’t been out there.”

The staff allows that the investments – in up to 1,270 megawatts of new wind, 999 megawatts of repowered existing wind turbines and a 140-mile transmission line, all largely in Wyoming – could offer economic benefits, but said they would also come with risks from things like cost overruns and generation shortfalls.

As for the idea that the investments will help lower emissions, the staff said “a decarbonization strategy cannot simply be a proposal to add carbon-free investment on top of a rate base that is currently fossil fuel-centric.” The six-state utility currently sources about 60 percent of its power from coal, a figure expected to decline by about half by 2038.

The Sierra Club thinks PacifiCorp should move faster, and the PUC staff agreed with the group’s call that PacifiCorp take a deep look at the economics of its coal fleet, proposing an analysis to be completed by the end of next March.

“When PacifiCorp filed this IRP, they ignored the coal plants altogether and tried to make it entirely about the $3.5 billion and renewables,” Amy Hojnowski, senior campaign representative for the Sierra Club, said. “It was, ‘Look at this shiny object.’ We want to see the wind built, but we need them to do the analysis and prove there aren’t coal units that sit on existing transmission that shouldn’t be retired.”

Link and other utility executives said they will offer a detailed response to the staff critique when comments are due by the end of the month. But Etta Lockey, PacifiCorp’s vice president for regulation, defended the IRP as “making good on the policy directive that we were part of passing” with last year’s coal to clean legislation.

“We’re exciting about Energy Vision 2020,” Lockey said, calling it a pathway to “increase renewables on our system that we know our customers want.”

Source:  By Pete Danko, Staff Reporter | Portland Business Journal | Oct 11, 2017 | www.bizjournals.com

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

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