Try 1 month for 99¢

Colstrip power plant co-owner PacifiCorp reported this week that 13 of its 22 coal-fired power plants were uneconomical; Colstrip wasn't among them, but its performance was marginal.

The Oregon-based utility issued the report in advance of its 2019 integrated resource plan, which lays out where the utility will (and won’t) be getting its power to service customer demand. Closing its uneconomical plants and looking elsewhere for power, such as renewable energy, would save PacifiCorp customers about $300 million, according to the report.

Colstrip Units 3 and 4 were part of the study. PacifiCorp has a 10 percent ownership share in those generators. The power station’s two other generators, Units 1 and 2, which are scheduled to close no later than 2022, are not part of PacifiCorp’s portfolio.

The report isn’t a road map for power plant closures, said David Eskelsen, a PacifiCorp spokesman. Several other factors would have to be considered before shutting uneconomical coal plants down. Several Wyoming coal power plants were identified as uneconomical in the report. Colstrip’s role in PacifiCorp’s future will become clearer next spring. That’s when Washington regulators expect PacifiCorp and two other Colstrip power plant owners to explain what the consequences might be if a Colstrip co-owner surrendered ownership or the coal mine feeding generation station shut down.

The latter scenario seems more probable after the bankruptcy filing of Westmoreland Coal Co. in October. Westmoreland intends in January to auction off Rosebud Mine, which services Colstrip.

This fall, PacifiCorp agreed to be financially ready by December 2027 to shutter the power plant. As recently as June, the utility estimated Colstrip would operate until 2046. A second Colstrip power plant co-owner, Seattle-based Puget Sound Energy, has also agreed to be financially ready to close the plant in nine years. Spokane-based Avista Corp. had also agreed to the 2027 date to clear the way for its sale to Hydro One of Ontario. The Hydro One deal fell apart Wednesday when it was rejected by regulators in Washington state.

It's unlikely Colstrip Units 3 and 4 would stay on PacifiCorp’s books while neither profitable nor economical, said Dennis Wamsted, of the Institute for Energy Economics and Financial Analysis. IEEFA has been charting the uncompetitiveness of coal power as the energy source loses market share to natural gas and renewable energy. Wamsted planned to publish an analysis of the PacifiCorp report Friday.

“At least on the analysis it’s on the margin, one of the units is barely economical, the other uneconomical,” Wamsted said. “It’s not that good obviously, of you follow the market. If this is where it is now, it’s not going to go up into positive territory.”

Subscribe to Breaking News

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Power plants tend to become less profitable as they age, and wear and tear leads to repairs. That makes it unlikely the Colstrip units will be less expensive and more profitable in the future, Wamsted said.

The results of the PacifiCorp study were similar to one commissioned earlier this year by the Sierra Club, which concluded that PacifiCorp would be paying less for power if the utility invested in renewable energy or bought electricity on the wholesale market. That study done by Energy Strategies was dismissed by PacifiCorp, which said at the time that its assets had a track record of reliable affordable prices.

PacifiCorp’s own report released this week indicated it would be more affordable to close most of its coal-fired power plants and replace them with either renewable energy projects of power bought on the open market.

Subscribe to Breaking News

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.
0
0
0
0
0
You must be logged in to react.
Click any reaction to login.