PacifiCorp Readies Multibillion-Dollar RFP for New Generation

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--PacifiCorp (Portland, Oregon), an electric utility unit of Berkshire Hathaway Incorporated (NYSE:BRK.A) (Omaha, Nebraska), will next month release a massive request for proposal (RFP) for new electric generation that could exceed $5 billion in value. New transmission projects valued at around $1.8 billion also would be needed to connect the new generation to PacifiCorp's far-reaching transmission system, though the RFP is for generation only.

"This is a very large-scale procurement of generation," Rick Link, PacifiCorp's vice president of resource planning, told Industrial Info. "We are very excited to participate in this process. We are optimistic we'll get a large amount of renewable resources out of it. The entire solicitation is driven by economics."

Link emphasized that the RFP was for all sources of generation: "It could be for anything -- renewables, nuclear, pumped-storage hydro, natural gas. It's whatever the market can offer."

Although PacifiCorp is not under a carbon-reduction plan with its regulators, the RFP materials make clear the company is looking to add carbon-free generation, as much as 1,823 megawatts (MW) of new solar resources to be co-located with 595 MW of new battery energy storage system (BESS) capacity. The RFP also seeks bids for up to 1,920 MW of new wind generation. Projects must be operating by the end of 2024.

Link said he expected that bids submitted for solar and BESS would show "ongoing improvements" from current prices, though he declined to be specific. He also said he expected bids for wind would show improvements in performance compared to today's technology, though again he declined to provide specifics.

The multibillion-dollar solicitation follows PacifiCorp's late-2019 integrated resource plan (IRP), which called for closing 2,800 MW of coal-fired power plants by 2030 and nearly 4,500 MW by 2038 to make way for renewable energy and battery storage capacity.

The RFP will be issued July 6. Bids are due August 10. No businesses affiliated with PacifiCorp will be submitting bids. Winning projects must be capable of interconnecting with or delivering to PacifiCorp's transmission system in its east or west balancing authority areas.

PacifiCorp's operating utilities serve a total of 1.9 million customers in six Western states: Oregon, Washington, California, Wyoming, Utah and Idaho. PacifiCorp owns about 10,880 MW of generating capacity. Company spokesman Spencer Hall told Industrial Info that PacifiCorp owns about 16,500 miles of transmission lines, the most of any single operator in the Western U.S.

PacifiCorp's IRP envisions retiring 16 of its 24 operating coal-fired units by 2030. An additional four units will be closed by 2038, the end of the 20-year IRP planning horizon.

In its IRP last October, PacifiCorp said that several coal-fired units that were slated to be retired in the out-years of the utility's planning horizon have had their retirement dates moved forward:

• Jim Bridger Power Station in Wyoming: Unit 1 will be retired in 2023 instead of 2028, as originally planned. PacifiCorp is the 66.6% owner of this station. Unit 1 has 578 MW of generating capacity.
• Naughton Power Station in Wyoming: Units 1 and 2 will be retired in 2025 instead of 2029. PacifiCorp owns all of this station. Units 1 and 2 have combined generating capacity of 360 MW.
• Craig Power Station in Colorado: Unit 2 will permanently cease operations in 2026 instead of 2034, as originally planned. PacifiCorp is the 19.3% owner of this plant. Unit 2 has generating capacity of 389 MW.
• Colstrip Power Station in Montana: Units 3 and 4 will close in 2027 instead of 2046. PacifiCorp owns approximately 18% of this plant. Units 3 and 4 have combined generating capacity of 1,480 MW.
• Jim Bridger Power Station Unit 2 will permanently cease generating electricity in 2028 instead of 2032, as originally planned. This unit has 578 MW of generating capacity.

PacifiCorp is one of many power generators who are closing their coal-fired units, as cheaper renewables and natural gas, coupled with slower load growth, displaces coal in power generation. For more on the declining use of coal by electric generators, see March 17, 2020, article - Coal Use by U.S. Power Generators Continues to Decline, and October 19, 2019, article - Coal Power and Coal Mining Trapped in Vicious Cycle.

PacifiCorp's 2019 IRP contained far more wind and BESS capacity than its 2017 IRP, and the faster deployment of greater amounts of wind and energy storage means that carbon emissions will decline more dramatically than was planned only two years ago. Full implementation of the 2019 IRP will cut PacifiCorp's carbon emissions by over 10 million short tons by 2030 compared to was contemplated in the 2017 IRP.

Click on the images at right to see how PacifiCorp's 2019 IRP accelerated the deployment of wind (shown in green) and BESS (shown in blue), leading to faster reduction in carbon dioxide emissions.

Winning bidders must have their projects achieve commercial operation by yearend 2024. That in-service date had been yearend 2023, but was extended by one year to accommodate the one-year extension of the federal Production Tax Credit (PTC), which took place at the end of 2019.

The utility specified that at least 25% of selected lithium-ion BESS must be co-located with a renewable resource and have storage duration of between two and six hours. At least 25% of flow batteries must be collocated with a renewable resource and have duration of two to 12 hours. All other types of BESS could be collocated with at least 25% of renewable resources.

PacifiCorp also will accept bids from longer-lead projects, such as pumped-storage hydro and nuclear, that would not be online by yearend 2024.

As hefty as this RFP is, it is only the first step. Over the next 20 years, as it retires coal-fired units, PacifiCorp plans to bring on more than 4,600 megawatts of new wind power, more than 6,300 megawatts of solar power, and more than 2,800 megawatts of energy storage by 2038.

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