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Coal-dependent utility fights efforts to reveal whether power plants are cost-efficient

PacifiCorp, based in Oregon, relies on coal for 60 percent of its power plant capacity.

Pacificorp's coal-fired Huntington power plant on October 9, 2017 in Utah. CREDIT: George Frey/Getty Images
Pacificorp's coal-fired Huntington power plant on October 9, 2017 in Utah. CREDIT: George Frey/Getty Images

Environmental groups believe it is important for PacifiCorp, a major coal-burning electric utility in the western United States, to release cost information related to the operation of its coal-fired power plants. PacifiCorp counters that the coal plant data should remain confidential to protect the company’s financial interests.

PacifiCorp won a temporary restraining order in July to prevent state regulators from releasing that information publicly. A Washington state Superior Court judge is scheduled Friday to determine whether the restraining order should be lifted, forcing PacifiCorp to share its power plant cost information with its customers.

For several years, the Sierra Club has urged state regulators to require the company to reveal how much it costs to run its coal plants. “We believe that if this information is revealed, it will confirm what a recent independent analysis showed: at least half of the utility’s two dozen coal units cost customers more to run than cheaper and more reliable resources,” the Sierra Club said in a statement.

PacifiCorp is fighting disclosure of the data on the basis that the information contains trade secrets. Disclosing its fuel costs, operating costs, and contractual arrangements would limit its negotiating power with suppliers and customers, the company contends.

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Releasing the information could do real harm because it could be misconstrued and distort the market by letting other utilities know how much PacifiCorp spends on coal and the operation of its generating units, PacifiCorp spokesperson Bob Gravely told the Associated Press.

The company serves 1.8 million retail customers in Oregon and five other western states. It operates 72 generating facilities with a generating capacity of about 10,900 megawatts. Coal makes up about 60 percent of the company’s power plant portfolio, followed by natural gas at 15.4 percent, wind at 7.1 percent, and hydropower at 5.2 percent.

Experts have pointed out that PacifiCorp’s coal plants are not located in a region open to competition, which would make release of the cost data less harmful to the company. The company pays a certain amount to keep its coal plants running and that amount is then passed along to customers for recovery under the regulated system in which it operates, John Larsen, a director at independent research firm Rhodium Group, told Marketplace.

Oregon, where PacifiCorp has its headquarters, has only one coal-fired power station, which is due to shut down in 2020. The state imports one-third of its electricity from coal-fired plants in Montana, Utah, and Wyoming. In 2016, Oregon passed a law requiring the state’s utility companies to ensure none of the electricity they provide comes from coal by 2035.

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Environmental groups want access to the cost data to determine if running the facilities makes economic sense and if the company will need to rely on the Trump administration’s efforts to give coal plants a leg up in order to continue operating.

According to the Sierra Club, 40 percent of PacifiCorp’s coal plants are uneconomical. The group says units that are no longer in customers’ best interest include unit 4 at Cholla Power Plant in Arizona, units 1 and 2 at Craig Station in Colorado, units 1 and 2 at Hayden Generating Station in Colorado, units 3 and 4 at the Bridger Power Plant in Wyoming, and units 1 and 2 at the Naughton Plant, also in Wyoming.

Earlier this summer, the Sierra Club filed a public records request seeking information that PacifiCorp had redacted in a coal analysis the company provided to the Washington Utilities and Transportation Commission. The group also asked the Oregon Public Utility Commission to require PacifiCorp to divulge results of a company analysis into the economics of its coal-fired plants.

Independent energy consulting firm Energy Strategies released a report in June, commissioned by the Sierra Club, that showed wind and solar power, along with options for PacifiCorp to purchase energy on the open market, are in many cases cheaper than, or competitive with, coal generation.

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In the face of rising coal costs and economically competitive alternatives, PacifiCorp’s customers are increasingly more interested in what their utility’s reliance on coal means for energy prices, according to the Sierra Club.

Source: Sierra Club and Energy Strategies
Source: Sierra Club and Energy Strategies

The Energy Strategies “report clarifies what so many of us already know. The rise of clean energy is making PacifiCorp’s coal plants increasingly uneconomic,” Cesia Kearns, Western deputy director of the Sierra Club’s Beyond Coal campaign, said in a June statement upon the release of the report.

PacifiCorp’s “addiction to coal will continue to damage our air and water quality and distort the views of our most precious national parks with pollution.” Kearns said. “And for what? There are better options on the table.”