The decision by the Idaho Public Utilities Commission aims to ensure the state’s biggest utility isn’t locked into completing the estimated $130 million project, should alternatives to coal emerge as better for ratepayers.
Some observers expect the Obama administration to pass new greenhouse gas rules in 2015 that will hurt the viability of coal, compared with other forms of electricity generation.
However, if Idaho Power acts in good faith, the utility would likely be allowed to recover its costs from ratepayers, even if upgrades were abandoned before its pollution-control project was completed, PUC spokesman Gene Fadness said.
“We don’t have a crystal ball,” Fadness said. “The commission has always felt that if utilities are acting on the best information they had at the time, then the commission doesn’t necessarily feel those costs have to be denied.”
Monday’s ruling came after protests by environmental groups, including the Sierra Club, demanding Idaho Power invest in renewables and reduce demand rather than prolonging the life of the dirtier coal plant.
However, the commission decided Idaho Power’s proposed investments, at least at this time, were better for ratepayers and trumped alternatives proposed by the environmental groups.
Idaho Power, which owns one-third of the Jim Bridger coal-fired power plant near Rock Springs, Wyo., is under a federal Clean Air Act deadline meant to improve air quality in wilderness areas and national parks such as Yellowstone, located to the north of the plant.
PacifiCorp, which owns two-thirds of the Bridger plant, has already won approval from regulators in Utah and Wyoming for its share of the upgrades, due to be completed by late 2016. Without the upgrades, the Jim Bridger Plant would be forced to shut down.
Idaho Power spokesman Bill Shawver said the utility was pleased that regulators gave the company the go-ahead to move forward, over the objections of environmentalists.
Regulators “acknowledged what we feel: That it’s still in the best interests of our customers and the company, from a cost perspective, to install the emissions control equipment,” Shawver said.
In a partial victory for environmental groups, however, the Idaho regulator declined to approve a request from the utility that would have virtually guaranteed that Idaho Power could recover the full $130 million investment, once the project was completed.
Had that been granted, the commission wrote in its 13-page decision, it would have made it more difficult for Idaho Power to abandon these investments, even if stricter federal greenhouse gas limits made the controls a bad deal for ratepayers.
“A tipping point could be reached making them uneconomic,” regulators wrote. “As the project moves toward completion ... we direct Idaho Power to return to the commission if viable alternatives ... become available.”
Zack Waterman, director of the Sierra Club in Idaho and a key organizer of opposition to the utility’s proposal, joined other coal-plant foes including the Snake River Alliance group in lauding the commission’s decision not to lock in recovery of the $130 million.
He’s hopeful forcing Idaho Power to justify its upgrades every three months, coupled with the possibility of new greenhouse gas emission limits on the horizon, will prompt the utility to “completely rethink” its investment in the upgrades.
“We’re still thrilled with this,” Waterman said. “We think this gives us an opportunity to continue the discussion. We don’t think all of the costs of running these coal plants have been accounted for. And we don’t think that an adequate range of alternatives has been presented to ratepayers.”
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