A flaw in the modeling of coal-mine reclamation costs associated with the Jim Bridger power plant has pushed back the release of PacifiCorp’s 2019 integrated resource plan from “August 1 to no later than October 18,” the utility said in a filing with the Oregon PUC.
The company spotted the mistake while preparing for July 18-19 IRP stakeholder meeting, according to the filing with the OPUC.
While mine reclamation funding costs are included in fuel costs as an element of net power costs in rates, combining them in Bridger’s coal cost can influence how the modeling dispatches the units, the utility said.
Historically, the dispatch cost of the Jim Bridger units has been low enough relative to market prices that the adder intended to capture mine reclamation costs has not significantly altered generation levels and has therefore not led to a potential understatement of costs to fund mine reclamation, PacifiCorp said in the filing.
“However, base case assumptions adopted in the 2019 IRP for natural gas prices and power prices are relatively low, and the modeling team confirmed that the Jim Bridger units are reducing dispatch in a manner that understates the cost to fund mine reclamation,” according to the filing. “Considering that early retirement assumptions for Jim Bridger units vary among cases, mine closure assumptions and associated mine reclamation funding assumptions vary by case as well. Consequently, the impact of this issue will vary from one case to the next, which could affect the comparative analysis of the costs and risks of each portfolio that is used to select the preferred portfolio.”
The Jim Bridger plant has been a flashpoint in PacifiCorp’s coal fleet for some time.
The utility released an economic analysis of its coal fleet in December showing that roughly 60 percent of its units could potentially be retired in 2022 and replaced with renewables or natural gas-fired generation (CU No. 1880 ).
The study showed the “largest potential benefits” of earlier retirements coming from a cluster of coal facilities that included some of the Bridger units.
Closing Naughton units 1 and 2 and Jim Bridger Unit 1 in 2022 would yield in a present value of revenue requirement (PVRR) $301 million in benefits. Shuttering Naughton 1 and 2, Hayden 1 and Bridger 1 in 2022 would create $307 million PVRR in savings. Retiring Naughton 1 and 2, Hayden 1, Bridger 1 and Craig 2 in 2022 yielded $307 million PVRR in savings (CU No. 1880 ).
In September, the utility asked for regulatory approval in Washington, Oregon, Idaho and Utah to accelerate the depreciation schedule of the Bridger and Dave Johnston plants in Wyoming, which each have four units. The company proposed accelerating the depreciation schedule of the Dave Johnston plant from 2027 to 2023, and expediting the economic life of the Jim Bridger plant 12 years to 2025 (CU No. 1869 ).
But PacifiCorp withdrew the request in December, saying that it needed to complete 2019 IRP modeling because the analysis may affect the depreciation schedules.
With demand for coal shrinking in the West, Wyoming’s Powder River Basin has seen a wave of coal-mining companies filing for bankruptcy. On July 1, Blackjewel, Inc., whose two flagship mines in Wyoming are the fourth and sixth most productive coal mines in the country, filed for bankruptcy.
Wyoming lawmakers passed a bill in the last legislative session requiring a utility to attempt to sell, rather than retire, coal plants in an effort to prevent facilities from closing.