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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:BRKA) (Omaha, Nebraska), is using its broad generation and transmission footprint across six Western states to advocate for what it sees as "sound energy policy," which includes "decarbonizing the West," Cindy Crane, president and chief executive of Rocky Mountain Power (Salt Lake City, Utah), recently told an industry conference in Denver, Colorado.
Rocky Mountain Power is the PacifiCorp unit providing electricity to customers in Utah, Wyoming and Idaho. Rocky Mountain Power, together with its corporate sibling, Pacific Power, serves about 1.9 million customers in a 143,000-square-mile service area across six Western states. The company owns about 11,000 megawatts (MW) of generation and a 16,500-mile transmission network.
PacifiCorp plans to install about $700 million of pollution-control equipment at two of its power plants, Huntington and Hunter, to improve visibility in federal Class 1 areas, Crane told about 120 attendees at the 4th Annual Western Power Summit, sponsored by Access Intelligence (New York, New York) and held October 23-24 in the greater metropolitan Denver area. Construction of those projects is scheduled to begin in mid-2020 and be complete by the summer of 2023, according to Industrial Info's Global Market Intelligence (GMI) Integrated Platform.
In addition, PacifiCorp is considering installing pollution-control equipment at three other power stations it operates and has agreed to stop burning coal at a fourth station, Craig in Colorado. The operated stations where it is considering installing pollution-control equipment are:
However, aside from the Huntington and Hunter stations, no final decisions have been made on whether to install pollution-control equipment at those units or converting one or more of those units to burn natural gas, Ricky Mountain Power spokesman Spencer Hall told Industrial Info. "It's a very dynamic situation with a lot of contingencies," he said. "We're weighing the economics and the environmental regulations. Conversion to gas is under consideration at some units," but he would not specify which ones.
Rocky Mountain Power also owns 19% of Unit 1 of the Craig Power Station, a Colorado coal-burning generator operated by Tri-State Generating & Transmission (Westminster, Colorado). Tri-State has proposed prematurely retiring that unit, which has about 427 MW of generating capacity, by the end of 2025. For more information, see October 26, 2016, article - Two Colorado Coal-fired Generating Units May be Retired Prematurely.
In addition to either installing SCR equipment at some stations, or possibly converting some of them, PacificCorp is about $1.6 billion of the way to completing construction of about $6 billion of transmission investments. These lines are designed to bring renewable generation from Wyoming to Idaho and areas west and south. The lines also would debottleneck the transmission grid is the area, where generation exceeds available transmission capacity.
"These lines, when completed, will allow us to access tremendous renewable resources," Crane told about 120 attendees at the Western Transmission Summit. "We'll be able to bring wind power from Wyoming to Oregon and Utah, and solar power from Utah to other parts of the region. These lines will open up a very congested area and help the West decarbonize."
In addition to building high-voltage transmission lines, Crane's said PacifiCorp's plans to decarbonize the West's power supply includes investing billions of dollars to repower its windpower fleet and build new wind generation in the region. "The repowering will be a huge benefit to customers," she said. "It will allow us to capture more energy and generate more electricity at more variable wind speeds."
PacifiCorp's "Energy Vision" project entails repowering 999 MW of existing windpower generation, which would increase output by 20%, adding at least 1,100 MW of new wind generation by 2020 and building a new 500 kilovolt (kV) transmission line to unlock low-cost wind and relieve transmission bottlenecks, Crane said October 23. According to the 20-year integrated resource plan (IRP) PacifiCorp that filed with its regulators earlier this year, over the next two decades the utility also plans to deploy about 2,077 MW of incremental energy efficiency resources and 365 MW of new direct load control capacity. For more on PacifiCorp's planned capital investment plans, see April 21, 2017, article - Buffet's Utility Backs New Green Resources, Transmission Projects and August 17, 2017, article - Rocky Mountain Power Files for Wind and Transmission Projects.
Crane told conference attendees that when PacifiCorp issued a request for proposal (RFP) for up to 1,270 MW of new wind resources in September, it received an "extremely robust response" totaling over 4,000 MW. She said the company plans to issue a short list of projects in January.
While it has a robust portfolio of generation and transmission projects, PacifiCorp also wants to "modernize" the Public Utility Regulatory Policies Act (PURPA), a federal law from 1978 meant to encourage the construction of smaller power plants called "qualifying facilities" (QFs). Unfortunately, Crane said, there has been a significant growth in the QF queue in PacifiCorp's service area due to declining costs to build solar and wind generation. These QF additions are outpacing need for new generation and are causing transmission constraints, she added. Across PacifiCorp's six-state service area, 77 QF projects totaling 4,771 MW are in a queue awaiting authorization to either begin construction or connect with the utility's transmission system. PURPA requires utilities to purchase electricity from QFs if it costs less than what the utility would spend to generate the electricity itself. She noted efforts to update PURPA are under way in Congress, but there are no guarantees the reform efforts will succeed.
Beyond building capital projects, boosting energy efficiency programs and reforming PURPA, Crane extolled the benefits of the energy imbalance market (EIM), which she said could "break the inefficiency of state (electric) markets." The West is the only region of the U.S. not participating in an organized wholesale energy market like PJM, MISO or the Southwest Power Pool, she noted. The EIM, which started in late 2014 as a joint effort between PacifiCorp and the California Independent System Operator (CAISO) (Folsom, California), pools electric generation within each organization's balancing areas and dispatches resources on a least-cost basis. Crane said the EIM "optimizes generation and transmission to serve customers across the EIM's footprint."
She added, "Low cost renewable energy imports from California are increasingly displacing fossil generation in low-load periods, and fossil plants are providing- low cost flexible ramp service."
The EIM went live in November 2014, and since then more than $255 million of benefits have been created, she said. In late 2016, NV Energy (Las Vegas, Nevada), another unit of Berkshire Hathaway, joined the EIM. In 2017, other electric utilities in the region, including Puget Sound Energy (PSE) (Bellevue, Washington) and Arizona Public Service (APS) (Phoenix, Arizona), joined the pool. Over the next few years, Idaho Power (Boise, Idaho), Seattle City Light (Seattle, Washington), Los Angeles Department of Water & Power (Los Angeles, California) and Salt River Project (Phoenix, Arizona) plan to join the EIM.
"EIM benefits grow with expanded participation, bringing additional diversity and transfer capability," Crane said. Of the benefits created between November 2014 and September 2017, about $75 million have gone to CAISO, $107 million to PacifiCorp, $33 million to NV Energy and $30 million to APS, she estimated.
The EIM is "driving a fundamental change in the West that is redefining 'on-peak' and 'off-peak' wholesale electric prices," Crane said. "High price volatility in the mornings and afternoons are being offset with low prices or even negative prices in the afternoons." The mismatch between generating resources and customer demand, combined with the rules of the CAISO, has caused electric prices to become negative for substantial periods during a year. In 2015, she said, electricity in California was priced at less than zero for about 9% of the hours in that year. But so far this year, wholesale electricity in the Golden State has been priced at less than zero for roughly 25% of the hours.
Other speakers at the conference agreed that broadening the EIM into a full-fledged, multi-state regional transmission organization (RTO) or independent system operator (ISO) would save between $1 billion and $9 billion in capital outlays for new generation and transmission.
"Because we don't have an organized regional market, we use our resources very wastefully," a representative of an environmental organization told the Western Power Summit. "We can do this much more efficiently. An integrated Western market could eliminate a lot of planned capital expenditures. We'll still need new transmission lines and power plants, just less of them."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Rocky Mountain Power is the PacifiCorp unit providing electricity to customers in Utah, Wyoming and Idaho. Rocky Mountain Power, together with its corporate sibling, Pacific Power, serves about 1.9 million customers in a 143,000-square-mile service area across six Western states. The company owns about 11,000 megawatts (MW) of generation and a 16,500-mile transmission network.
PacifiCorp plans to install about $700 million of pollution-control equipment at two of its power plants, Huntington and Hunter, to improve visibility in federal Class 1 areas, Crane told about 120 attendees at the 4th Annual Western Power Summit, sponsored by Access Intelligence (New York, New York) and held October 23-24 in the greater metropolitan Denver area. Construction of those projects is scheduled to begin in mid-2020 and be complete by the summer of 2023, according to Industrial Info's Global Market Intelligence (GMI) Integrated Platform.
In addition, PacifiCorp is considering installing pollution-control equipment at three other power stations it operates and has agreed to stop burning coal at a fourth station, Craig in Colorado. The operated stations where it is considering installing pollution-control equipment are:
- Wyodak Power Station, a 362-MW coal-fired station in Wyoming that is 80% owned by Rocky Mountain Power, at a potential cost of $125 million to $150 million
- Naughton Power Station Unit 3, a 326-MW coal-fired generator also located in Wyoming, at a potential cost of $150 million to $200 million, and
- Cholla Power Station Unit 4, a 380-MW coal-fired unit located in Arizona, at a potential cost of $150 million to $200 million
However, aside from the Huntington and Hunter stations, no final decisions have been made on whether to install pollution-control equipment at those units or converting one or more of those units to burn natural gas, Ricky Mountain Power spokesman Spencer Hall told Industrial Info. "It's a very dynamic situation with a lot of contingencies," he said. "We're weighing the economics and the environmental regulations. Conversion to gas is under consideration at some units," but he would not specify which ones.
Rocky Mountain Power also owns 19% of Unit 1 of the Craig Power Station, a Colorado coal-burning generator operated by Tri-State Generating & Transmission (Westminster, Colorado). Tri-State has proposed prematurely retiring that unit, which has about 427 MW of generating capacity, by the end of 2025. For more information, see October 26, 2016, article - Two Colorado Coal-fired Generating Units May be Retired Prematurely.
In addition to either installing SCR equipment at some stations, or possibly converting some of them, PacificCorp is about $1.6 billion of the way to completing construction of about $6 billion of transmission investments. These lines are designed to bring renewable generation from Wyoming to Idaho and areas west and south. The lines also would debottleneck the transmission grid is the area, where generation exceeds available transmission capacity.
"These lines, when completed, will allow us to access tremendous renewable resources," Crane told about 120 attendees at the Western Transmission Summit. "We'll be able to bring wind power from Wyoming to Oregon and Utah, and solar power from Utah to other parts of the region. These lines will open up a very congested area and help the West decarbonize."
In addition to building high-voltage transmission lines, Crane's said PacifiCorp's plans to decarbonize the West's power supply includes investing billions of dollars to repower its windpower fleet and build new wind generation in the region. "The repowering will be a huge benefit to customers," she said. "It will allow us to capture more energy and generate more electricity at more variable wind speeds."
PacifiCorp's "Energy Vision" project entails repowering 999 MW of existing windpower generation, which would increase output by 20%, adding at least 1,100 MW of new wind generation by 2020 and building a new 500 kilovolt (kV) transmission line to unlock low-cost wind and relieve transmission bottlenecks, Crane said October 23. According to the 20-year integrated resource plan (IRP) PacifiCorp that filed with its regulators earlier this year, over the next two decades the utility also plans to deploy about 2,077 MW of incremental energy efficiency resources and 365 MW of new direct load control capacity. For more on PacifiCorp's planned capital investment plans, see April 21, 2017, article - Buffet's Utility Backs New Green Resources, Transmission Projects and August 17, 2017, article - Rocky Mountain Power Files for Wind and Transmission Projects.
Crane told conference attendees that when PacifiCorp issued a request for proposal (RFP) for up to 1,270 MW of new wind resources in September, it received an "extremely robust response" totaling over 4,000 MW. She said the company plans to issue a short list of projects in January.
While it has a robust portfolio of generation and transmission projects, PacifiCorp also wants to "modernize" the Public Utility Regulatory Policies Act (PURPA), a federal law from 1978 meant to encourage the construction of smaller power plants called "qualifying facilities" (QFs). Unfortunately, Crane said, there has been a significant growth in the QF queue in PacifiCorp's service area due to declining costs to build solar and wind generation. These QF additions are outpacing need for new generation and are causing transmission constraints, she added. Across PacifiCorp's six-state service area, 77 QF projects totaling 4,771 MW are in a queue awaiting authorization to either begin construction or connect with the utility's transmission system. PURPA requires utilities to purchase electricity from QFs if it costs less than what the utility would spend to generate the electricity itself. She noted efforts to update PURPA are under way in Congress, but there are no guarantees the reform efforts will succeed.
Beyond building capital projects, boosting energy efficiency programs and reforming PURPA, Crane extolled the benefits of the energy imbalance market (EIM), which she said could "break the inefficiency of state (electric) markets." The West is the only region of the U.S. not participating in an organized wholesale energy market like PJM, MISO or the Southwest Power Pool, she noted. The EIM, which started in late 2014 as a joint effort between PacifiCorp and the California Independent System Operator (CAISO) (Folsom, California), pools electric generation within each organization's balancing areas and dispatches resources on a least-cost basis. Crane said the EIM "optimizes generation and transmission to serve customers across the EIM's footprint."
She added, "Low cost renewable energy imports from California are increasingly displacing fossil generation in low-load periods, and fossil plants are providing- low cost flexible ramp service."
The EIM went live in November 2014, and since then more than $255 million of benefits have been created, she said. In late 2016, NV Energy (Las Vegas, Nevada), another unit of Berkshire Hathaway, joined the EIM. In 2017, other electric utilities in the region, including Puget Sound Energy (PSE) (Bellevue, Washington) and Arizona Public Service (APS) (Phoenix, Arizona), joined the pool. Over the next few years, Idaho Power (Boise, Idaho), Seattle City Light (Seattle, Washington), Los Angeles Department of Water & Power (Los Angeles, California) and Salt River Project (Phoenix, Arizona) plan to join the EIM.
"EIM benefits grow with expanded participation, bringing additional diversity and transfer capability," Crane said. Of the benefits created between November 2014 and September 2017, about $75 million have gone to CAISO, $107 million to PacifiCorp, $33 million to NV Energy and $30 million to APS, she estimated.
The EIM is "driving a fundamental change in the West that is redefining 'on-peak' and 'off-peak' wholesale electric prices," Crane said. "High price volatility in the mornings and afternoons are being offset with low prices or even negative prices in the afternoons." The mismatch between generating resources and customer demand, combined with the rules of the CAISO, has caused electric prices to become negative for substantial periods during a year. In 2015, she said, electricity in California was priced at less than zero for about 9% of the hours in that year. But so far this year, wholesale electricity in the Golden State has been priced at less than zero for roughly 25% of the hours.
Other speakers at the conference agreed that broadening the EIM into a full-fledged, multi-state regional transmission organization (RTO) or independent system operator (ISO) would save between $1 billion and $9 billion in capital outlays for new generation and transmission.
"Because we don't have an organized regional market, we use our resources very wastefully," a representative of an environmental organization told the Western Power Summit. "We can do this much more efficiently. An integrated Western market could eliminate a lot of planned capital expenditures. We'll still need new transmission lines and power plants, just less of them."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
