Rocky Mountain Power seeks accounting for coal plant shutdown

Due to new U.S. Environmental Protection Agency air regulations, Rocky Mountain Power, a division of PacifiCorp, has applied at the Wyoming Public Service Commission for an accounting order related to the probable shutdown of the coal-fired Carbon power plant in Utah.

The requested accounting order would authorize the company to transfer the remaining plant balances from electric plant in service and accumulated depreciation and establish a regulatory asset to recover these costs when the Carbon plant is retired. The company would recover these costs through an amortization through 2020, the currently assumed life of the plant. The company said in the May 1 application at the Wyoming PSC that it anticipates retiring the Carbon plant in early 2015 to comply with recently finalized EPA standards.

Rocky Mountain Power is a regulated public utility in the state of Wyoming and is subject to the commission’s jurisdiction with respect to its prices and terms of electric service to retail customers in Wyoming. The company serves approximately 141,000 customers and has around 1,500 employees in Wyoming.

The costs associated with alternatives to comply with the EPA’s recently-finalized Mercury and Air Toxics Standards (MATS) are not expected to be cost effective. The Carbon units have not been, and cannot economically be, retrofitted with scrubbers, baghouses, or other significant emissions equipment that would foster the Carbon plant’s ability to comply, the company noted. In addition to the MATS rules, Rocky Mountain Power must consider other regulations in its long-term planning decisions for the Carbon plant. These other regulations include National Ambient Air Quality Standards (NAAQS) and long-term Regional Haze Rule planning. The Carbon plant is located in the mouth of a canyon with no room to install significant environmental retrofits, Rocky Mountain Power said.

The company previously assessed converting the Carbon plant to natural gas as a fuel resource. However, doing so would not achieve an acceptable emissions profile for long-term environmental compliance. Moreover, the company’s economic analysis showed it was not a viable least cost option, after accounting for risk and uncertainty.

Nevertheless, the company said it continues to assess compliance solutions including whether emerging technologies could save the Carbon plant from decommissioning. For example, the company is reviewing dry sorbent injection to determine if this would assist in achieving MATS compliance. Assuming the testing provides positive results for MATS-regulated emissions, the company will continue to assess the commercial viability and cost of such emerging technologies, as well as the ability of those technologies to support compliance with other emissions regulations such as NAAQS and long-term Regional Haze Rule planning.

“Despite the Company’s continued assessment of the options mentioned above, the Company does not expect to identify a least-cost option, accounting for risk and uncertainty, other than retiring the Carbon plant,” the application said.

Retiring Carbon may pose a complication with potential transmission system impacts. Depending on the impacts, the company may need to request an extension of the initial April 2015 MATS compliance deadline for the Carbon plant. If the company finds there is a need for an extended compliance schedule, it will work within the conditions included in the MATS regulations and seek administrative guidance to request an appropriate compliance extension.

Rocky Mountain Power also applied May 3 at the Idaho Public Utilities Commission for an accounting order authorizing it to transfer the remaining plant balances from electric plant in service and accumulated depreciation and establish a regulatory asset to recover these costs when the Carbon plant is retired.

PacifiCorp said in an updated integrated resource plan that it filed with various state commissions, including the ones in Utah and Wyoming, at the end of March that a Carbon shutdown was likely.

Carbon was commissioned in 1954 after Unit 1 was built into the side of a 100-foot rock formation near Helper, Utah, said a plant fact sheet on the PacifiCorp website. Unit 2 was added in 1956 and the two units produce a combined 172 MW. Electrostatic precipitators were added to both units between 1974 and 1976, and other modifications have been added during the years to reduce emissions and increase operating efficiency. Carbon burns about 657,000 tons of sub-bituminous coal per year that is delivered to the plant by truck from local mines.

A Carbon shutdown would leave PacifiCorp with its much larger Hunter and Huntington coal plants in Utah.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.