Pacific Power's reliance on coal plants brings utility to expensive juncture
#1
Funny, I would have thought Pacific Power (Pacificcorp) was getting our power mostly from hydro and wind maybe too, since that's been in the news so much and we are in the Pacific Northwest too with plenty of hydropower. Turns out it's mostly coal that provides Pacific Power with theirs though: http://www.oregonlive.com/business/index...oal_p.html

Excerpt: "...when it comes to coal, PacifiCorp is king. That dependence is driving Oregon's second largest utility to a very different strategy when it comes to impending regulations: to stay the course with coal, despite the expense.

PacifiCorp relies on a fleet of 26 coal-fired boilers at 11 locations in Montana, Wyoming, Utah, Arizona and Colorado. Those plants provide almost two-thirds of the electricity consumed by customers in its six-state territory, and their low-cost output partly explains why Pacific Power's rates in Oregon remain lower than PGE's.

So it's no wonder that company executives were in Washington, D.C., this month to lobby against the quick imposition of new clean air rules proposed by the U.S. Environmental Protection Agency. Cathy Woollums, chief environmental counsel for PacifiCorp's parent company, told lawmakers that compliance within the short time frame proposed by the agency would cause the cost of plant retrofits and new generation to skyrocket as parts and labor shortages outstripped supply.

Woollums estimated that PacifiCorp would face $1.3 billion in additional environmental compliance costs, almost 40 percent of the value of its coal fleet. She didn't translate those costs to rate increases, but said the impact would be concentrated in a narrow window between 2013 and 2015, potentially forcing early plant closures and exacerbating rate hikes from other investments in new gas plants, transmission projects and renewable power.

But while it lobbies against the new rules in Washington, PacifiCorp is telling ratepayers and state regulators that plant retrofits to keep the coal fires burning are the least-cost, least-risk strategy to meet demand.

"For baseload generation, it's either gas, coal or nuclear," said Micheal Dunn, president of PacifiCorp Energy. "There aren't a lot of other options out there, and we believe that retrofitting the coal units is the most economical option for our customers."

That question will be pivotal as state regulators and ratepayer advocates scrutinize the company resource plans over the next few years. Pacific Power has raised residential rates in Oregon by 49 percent since 2005, when it announced its takeover by MidAmerican Energy Holdings, a subsidiary of Warren Buffett's Berkshire Hathaway conglomerate. Part of that rise was driven by the $1.2 billion in environmental upgrades that PacifiCorp has made during that period. Indeed, MidAmerican's chief rationale for buying PacifiCorp was as an investment vehicle for Berkshire Hathaway capital..."
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#2
(06-25-2011, 09:34 AM)PonderThis Wrote: Turns out it's mostly coal that provides Pacific Power with theirs though:

...SNIP...

Buy coal.
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#3
Well, the article says if they put a carbon tax on coal, or make coal plants install emission equipment (or, both), it's gonna make coal powered electricity suddenly become much more expensive, in a business where new plants don't come online suddenly. It's sort of a dangerous gamble.
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#4
(06-25-2011, 04:08 PM)PonderThis Wrote: Well, the article says if they put a carbon tax on coal, or make coal plants install emission equipment (or, both), it's gonna make coal powered electricity suddenly become much more expensive, in a business where new plants don't come online suddenly. It's sort of a dangerous gamble.

Life's a gamble.
Buy land. They don't make it no more. (Thanks Will).

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