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Written by John Egan for Industrial Info Resources (Sugar Land, Texas) --Last week, PacifiCorp (Portland, Oregon), a unit of Berkshire Hathaway Incorporated (NYSE:BRK.A) (Omaha, Nebraska), became the latest U.S. electric utility to delay the scheduled closure of coal-fired generating capacity.
PacifiCorp serves about 2.1 million customers in six Western states: Oregon, Washington, California, Wyoming, Utah and Idaho.
It joins Evergy Incorporated (NASDAQ:EVRG) (Kansas City, Missouri), Alliant Energy Corporation (NYSE:LNT) (Madison, Wisconsin), WEC Energy Group Incorporated (NYSE:WEC) (Milwaukee, Wisconsin), Northern Indiana Public Service Company (NIPSCO) (Merrillville, Indiana) and the Omaha Public Power District (OPPD) (Omaha, Nebraska) in reversing decisions to close or convert coal-fired power plants.
These utilities cited a variety of reasons for changing course, but most cited some combination of still-lingering supply-chain dislocations, concerns about electric reliability and delays in completing construction of replacement generation. Other reasons utilities give for rejiggering their long-term resource plans include mandates from regional transmission organizations (RTOs), the slow pace of obtaining federal funding for renewable energy from the bipartisan 2022 Inflation Reduction Act (IRA) and unsettled legal or regulatory matters.
"Integrated resource plans (IRPs) are long-term planning documents that typically look out over 15 or 20 years," commented Britt Burt, Industrial Info's vice president of research for the Electric Power Industry. "They are not set in stone. They are meant to be updated when new facts and trends emerge. All IRPs are a snapshot in time."
"Think about all the changes that have roiled the electricity business and the global economy over the last few years," he continued. "Supply-chains were disrupted by the COVID-19 pandemic. Severe weather has eroded electric reliability. Strong electric load growth is being driven by the explosion of data centers and cryptocurrency mining. Developers are building massive new amounts of renewable generation. Energy prices went through the roof after Russia invaded Ukraine."
"Any one of those strategic changes could send forecasters back to the drawing board," Burt said. "And that's before we even consider the lengthy delays in connecting new generation to the grid in several markets."
"When all of these disruptive trends happen one after another, or sometimes simultaneously, every assumption in an IRP has to be revisited and updated," he said. "It's no surprise to me that electric utilities are reassessing and revising their long-term resource plans. Sometimes I wonder how the lights are staying on at all."
The utility did not release an estimated cost for the changes it seeks to make in its IRP. That's mostly because regulators have to approve PacifiCorp's preferred portfolio of resources that was announced April 2. Below is a comparison of the current preferred resource mix in the 2024 IRP update with the 2023 IRP.
Wind
PacifiCorp's current preferred portfolio includes constructing about 9,818 megawatts (MW) of new wind generation over the next two decades, virtually the same as the 9,811 MW it said it wanted to build in its 2023 IRP.
Solar
New solar generation was slashed about 52%, from 7,855 MW in the 2023 IRP to 3,763 MW in the just-released IRP update.
Storage
Storage also took a hit this year, falling approximately 50% to about 4,016 MW over the next 20 years compared to its year-earlier plan to build 8,095 MW of storage. The 2024 update said these 4,016 MW of storage resources would include batteries collocated with solar generation, standalone batteries and pumped hydro storage resources.
Energy Efficiency
PacifiCorp's optimal portfolio included a slight decrease in energy efficiency: 4,326 MW is the new plan compared to 4,953 MW in last year's plan.
Direct Load Control and Demand Response
In its 2023 IRP, the utility planned to install approximately 929 MW of direct load control over the next two decades. In its 2024 update, the utility said it expects to save about 1,123 MW of capacity through demand response programs over the next 20 years.
Advanced Nuclear
Both IRPs showed the same expectation that 500 MW of new generating capacity will come from the Natrium reactor demonstration program that will be built at a soon-to-be-closed coal-fired power plant in Kemmerer, Wyoming. Last year's IRP included the option of building two additional Natrium advanced nuclear plants--identical to the plant scheduled to be built in Wyoming--after it closed the Hunter and Huntington coal-fired power plants in Utah in the next decade. But the IRP update released April 2 took the Natrium plants in Utah off the table.
Non-emitting Peaking Resources
Last year, PacifiCorp said it wanted to construct about 1,240 MW of non-emitting peaking resources that could help meet peak electric demand. Presumably, this would be a pumped storage addition at a hydropower plant, though the exact resource was not specified. There was no comparable mention of non-emitting peaking resources in the 2024 IRP, though projects in the 2024 update on storage explicitly refers to pumped storage hydro resources.
New to PacifiCorp's 2024 IRP Update
PacifiCorp added two clusters of new resources to the 2024 IRP that were not included in the 2023 IRP: installation of carbon capture, utilization and storage (CCUS) at units 3 and 4 of the coal-fired Jim Bridger Power Station and the addition of 5,835 MW of "natural gas convertible peaking resources that (can help) meet high-demand energy needs."
The utility, one of the largest transmission owners in the U.S., also said it would make new investments in its interstate transmission network over the next 20 years. The utility said it was finalizing construction of the Energy Gateway South and Energy Gateway West Sub-Segment D.1 transmission projects and partnering with Idaho Power to build the Energy Gateway Sub-Segment H (Boardman-to-Hemingway) transmission project.
Additional transmission investments are expected to be made to increase transfer capability and enable renewable resource requests to connect to the transmission system in southeast Idaho, central and northern Utah, eastern Wyoming, throughout Oregon, and in Yakima and Walla Walla, Washington.
On the generation side of the business, though, the changes PacifiCorp wants to make this year were especially notable because its prior IRP, released 12 months ago, was anchored in renewable resources. For more on PacifiCorp's 2023 IRP plans, see April 24, 2023, article - PacifiCorp Seeks More Solar, Wind, Storage and Transmission, Less Coal Generation.
But in its April 2 statement, the utility said the sharp reductions in solar and storage were driven by "significant changes in federal and state energy policies since May 2023." Specifically, PacifiCorp is making changes to its IRP in response to "the U.S. Environmental Protection Agency's approval of Wyoming's state Ozone Transport Rule plan and a U.S. district court stay of the EPA's disapproval of Utah's state Ozone Transport Rule plan. These include extensions to the assumed operational life of certain thermal generating resources, as well as adjustments to the company's energy storage acquisition strategy, customer demand forecasts and general resource pricing updates."
In last year's IRP, PacifiCorp said it planned to exit coal-fired generation by 2032. But its new plan contemplates keeping two Utah coal-fired power plants, Huntington and Hunter, open until 2036 and 2042, respectively. In Wyoming, two coal-burning units at the Jim Bridger Power Station also had their retirement dates pushed back as part of a plan to build a carbon capture, use and sequestration (CCUS) facility there.
One reason for the decision to extend the lives of two Utah coal-fired power plants is a law enacted this year by the Utah legislature that deemed coal the preferred fuel for PacifiCorp's Utah power plants. The bill, SB224, essentially upended the paradigm that made the utility prove to utility regulators that it was choosing the least cost/least risk resource options for providing power. Instead, the PSC must now assume the coal plants are the best option, and it's up to others to prove they aren't.
"PacifiCorp's long-range planning provides a framework for future actions the company anticipates will be needed to provide the reliable and essential electric service our customers expect and deserve," said Rick Link, PacifiCorp's senior vice president of resource planning.
"We are focused on four core objectives as we plan to serve our customers in the future: reliability, resilient infrastructure, fair and reasonable prices, and a continued transition to clean and non-emitting sources of energy along the important trajectory of reduced carbon emissions."
"Over the long term," Link continued, "we also anticipate the addition of natural gas peaking resources that are capable of converting to non-carbon-emitting fuels. The revised preferred portfolio also includes resources necessary for individual state policy compliance and assumes the allocation of those resources is attributed to the state whose policy necessitated the addition."
In PacifiCorp's April 2 statement, Link added, "Our IRP update delivers customers significant near-term cost savings by avoiding accelerated closures and deferring portions of our previous resource acquisition plans while our longstanding commitment to ensuring reliable service to our customers will require continued investments in several areas."
Clean energy advocates were dismayed by the changes in the PacifiCorp IRP update. Utility commissions across PacifiCorp's six-state service area will need to review and approve the utility's plan.
Aside from PacifiCorp, these utilities have delayed the closure or conversion of coal-fired generation over the last two years:
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
PacifiCorp serves about 2.1 million customers in six Western states: Oregon, Washington, California, Wyoming, Utah and Idaho.
It joins Evergy Incorporated (NASDAQ:EVRG) (Kansas City, Missouri), Alliant Energy Corporation (NYSE:LNT) (Madison, Wisconsin), WEC Energy Group Incorporated (NYSE:WEC) (Milwaukee, Wisconsin), Northern Indiana Public Service Company (NIPSCO) (Merrillville, Indiana) and the Omaha Public Power District (OPPD) (Omaha, Nebraska) in reversing decisions to close or convert coal-fired power plants.
These utilities cited a variety of reasons for changing course, but most cited some combination of still-lingering supply-chain dislocations, concerns about electric reliability and delays in completing construction of replacement generation. Other reasons utilities give for rejiggering their long-term resource plans include mandates from regional transmission organizations (RTOs), the slow pace of obtaining federal funding for renewable energy from the bipartisan 2022 Inflation Reduction Act (IRA) and unsettled legal or regulatory matters.
"Integrated resource plans (IRPs) are long-term planning documents that typically look out over 15 or 20 years," commented Britt Burt, Industrial Info's vice president of research for the Electric Power Industry. "They are not set in stone. They are meant to be updated when new facts and trends emerge. All IRPs are a snapshot in time."
"Think about all the changes that have roiled the electricity business and the global economy over the last few years," he continued. "Supply-chains were disrupted by the COVID-19 pandemic. Severe weather has eroded electric reliability. Strong electric load growth is being driven by the explosion of data centers and cryptocurrency mining. Developers are building massive new amounts of renewable generation. Energy prices went through the roof after Russia invaded Ukraine."
"Any one of those strategic changes could send forecasters back to the drawing board," Burt said. "And that's before we even consider the lengthy delays in connecting new generation to the grid in several markets."
"When all of these disruptive trends happen one after another, or sometimes simultaneously, every assumption in an IRP has to be revisited and updated," he said. "It's no surprise to me that electric utilities are reassessing and revising their long-term resource plans. Sometimes I wonder how the lights are staying on at all."
The utility did not release an estimated cost for the changes it seeks to make in its IRP. That's mostly because regulators have to approve PacifiCorp's preferred portfolio of resources that was announced April 2. Below is a comparison of the current preferred resource mix in the 2024 IRP update with the 2023 IRP.
Wind
PacifiCorp's current preferred portfolio includes constructing about 9,818 megawatts (MW) of new wind generation over the next two decades, virtually the same as the 9,811 MW it said it wanted to build in its 2023 IRP.
Solar
New solar generation was slashed about 52%, from 7,855 MW in the 2023 IRP to 3,763 MW in the just-released IRP update.
Storage
Storage also took a hit this year, falling approximately 50% to about 4,016 MW over the next 20 years compared to its year-earlier plan to build 8,095 MW of storage. The 2024 update said these 4,016 MW of storage resources would include batteries collocated with solar generation, standalone batteries and pumped hydro storage resources.
Energy Efficiency
PacifiCorp's optimal portfolio included a slight decrease in energy efficiency: 4,326 MW is the new plan compared to 4,953 MW in last year's plan.
Direct Load Control and Demand Response
In its 2023 IRP, the utility planned to install approximately 929 MW of direct load control over the next two decades. In its 2024 update, the utility said it expects to save about 1,123 MW of capacity through demand response programs over the next 20 years.
Advanced Nuclear
Both IRPs showed the same expectation that 500 MW of new generating capacity will come from the Natrium reactor demonstration program that will be built at a soon-to-be-closed coal-fired power plant in Kemmerer, Wyoming. Last year's IRP included the option of building two additional Natrium advanced nuclear plants--identical to the plant scheduled to be built in Wyoming--after it closed the Hunter and Huntington coal-fired power plants in Utah in the next decade. But the IRP update released April 2 took the Natrium plants in Utah off the table.
Non-emitting Peaking Resources
Last year, PacifiCorp said it wanted to construct about 1,240 MW of non-emitting peaking resources that could help meet peak electric demand. Presumably, this would be a pumped storage addition at a hydropower plant, though the exact resource was not specified. There was no comparable mention of non-emitting peaking resources in the 2024 IRP, though projects in the 2024 update on storage explicitly refers to pumped storage hydro resources.
New to PacifiCorp's 2024 IRP Update
PacifiCorp added two clusters of new resources to the 2024 IRP that were not included in the 2023 IRP: installation of carbon capture, utilization and storage (CCUS) at units 3 and 4 of the coal-fired Jim Bridger Power Station and the addition of 5,835 MW of "natural gas convertible peaking resources that (can help) meet high-demand energy needs."
The utility, one of the largest transmission owners in the U.S., also said it would make new investments in its interstate transmission network over the next 20 years. The utility said it was finalizing construction of the Energy Gateway South and Energy Gateway West Sub-Segment D.1 transmission projects and partnering with Idaho Power to build the Energy Gateway Sub-Segment H (Boardman-to-Hemingway) transmission project.
Additional transmission investments are expected to be made to increase transfer capability and enable renewable resource requests to connect to the transmission system in southeast Idaho, central and northern Utah, eastern Wyoming, throughout Oregon, and in Yakima and Walla Walla, Washington.
On the generation side of the business, though, the changes PacifiCorp wants to make this year were especially notable because its prior IRP, released 12 months ago, was anchored in renewable resources. For more on PacifiCorp's 2023 IRP plans, see April 24, 2023, article - PacifiCorp Seeks More Solar, Wind, Storage and Transmission, Less Coal Generation.
But in its April 2 statement, the utility said the sharp reductions in solar and storage were driven by "significant changes in federal and state energy policies since May 2023." Specifically, PacifiCorp is making changes to its IRP in response to "the U.S. Environmental Protection Agency's approval of Wyoming's state Ozone Transport Rule plan and a U.S. district court stay of the EPA's disapproval of Utah's state Ozone Transport Rule plan. These include extensions to the assumed operational life of certain thermal generating resources, as well as adjustments to the company's energy storage acquisition strategy, customer demand forecasts and general resource pricing updates."
In last year's IRP, PacifiCorp said it planned to exit coal-fired generation by 2032. But its new plan contemplates keeping two Utah coal-fired power plants, Huntington and Hunter, open until 2036 and 2042, respectively. In Wyoming, two coal-burning units at the Jim Bridger Power Station also had their retirement dates pushed back as part of a plan to build a carbon capture, use and sequestration (CCUS) facility there.
One reason for the decision to extend the lives of two Utah coal-fired power plants is a law enacted this year by the Utah legislature that deemed coal the preferred fuel for PacifiCorp's Utah power plants. The bill, SB224, essentially upended the paradigm that made the utility prove to utility regulators that it was choosing the least cost/least risk resource options for providing power. Instead, the PSC must now assume the coal plants are the best option, and it's up to others to prove they aren't.
"PacifiCorp's long-range planning provides a framework for future actions the company anticipates will be needed to provide the reliable and essential electric service our customers expect and deserve," said Rick Link, PacifiCorp's senior vice president of resource planning.
"We are focused on four core objectives as we plan to serve our customers in the future: reliability, resilient infrastructure, fair and reasonable prices, and a continued transition to clean and non-emitting sources of energy along the important trajectory of reduced carbon emissions."
"Over the long term," Link continued, "we also anticipate the addition of natural gas peaking resources that are capable of converting to non-carbon-emitting fuels. The revised preferred portfolio also includes resources necessary for individual state policy compliance and assumes the allocation of those resources is attributed to the state whose policy necessitated the addition."
In PacifiCorp's April 2 statement, Link added, "Our IRP update delivers customers significant near-term cost savings by avoiding accelerated closures and deferring portions of our previous resource acquisition plans while our longstanding commitment to ensuring reliable service to our customers will require continued investments in several areas."
Clean energy advocates were dismayed by the changes in the PacifiCorp IRP update. Utility commissions across PacifiCorp's six-state service area will need to review and approve the utility's plan.
Aside from PacifiCorp, these utilities have delayed the closure or conversion of coal-fired generation over the last two years:
- Evergy last June filed documents with its state regulators that said it wanted to delay building some renewable electric generation, push back the retirement date of some coal-fired generation and build new gas-fired generation to meet the dispatchability requirements of its grid operator, the Southwest Power Pool (SPP) (Little Rock, Arkansas). The utility had planned to retire the coal-fired Lawrence Energy Center by the end of 2023 and add 700 megawatts of solar power by the end of 2024. But in a mid-2023 update, it said it doesn't plan to add any solar power until 2026 and will keep the Lawrence coal plant open until 2028. For more on Evergy's decision, see June 22, 2023, article - Dynamic Electric Market Forces Evergy to Adjust Resource Plans.
- Alliant Energy's Wisconsin Power and Light Company subsidiary has deferred the closure of two power plants: In mid-2022, it decided to postpone the closure of its 400-MW Edgewater Generating Station until mid-2025. It has been scheduled to close by the end of 2022. Also in mid-2022, it pushed back the closure date of the 1,023-MW Columbia Energy Center to mid-2026 from a late-2024 closure date.
- WEC Energy Group's We Energies unit recently decided to delay closing the remaining units of the Oak Creek Power Station. Units 5 and 6 will close by mid-2024 while units 7 and 8 will be retired by late 2025.
- NIPSCO, a unit of NiSource Incorporated (NYSE:NI) (Merrillville, Indiana), now plans to keep its Rollin M. Schahfer Power Station open until 2025. It had planned to close that power plant in 2023.
- OPPD last summer changed course regarding its coal-fired North Omaha Station. Originally it planned to retire units 1, 2 and 3, and convert units 4 and 5 to burn natural gas, by year-end 2023. But last August it decided to postpone all of those actions until 2026 or until construction was finished at two gas-fired power stations: Standing Bear Lake and Turtle Creek.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
