Based on the U.S. Environmental Protection Agency’s “overstated” carbon reduction goal for Wyoming, and given the fact there are limited options for Wyoming to achieve this goal, a number of coal-fired units in the state would need to be shut to meet the initial 2020 goal under the EPA’s proposed Clean Power Plan.
“It was assumed the state would shut down coal plants in order of scheduled full depreciation to minimize stranded investments, though plants will not be fully depreciated within EPA’s timeframe,” wrote Todd Parfitt, the Director of the Wyoming Department of Environmental Quality (WDEQ), in prepared testimony for a March 11 hearing on the plan held by the U.S. Senate Environment and Public Works Committee.
Those coal shutdowns would entail, said Parfitt:
- Premature closure of PacifiCorp‘s Dave Johnston plant, 816 MW;
- Premature closure of PacifiCorp’s Naughton plant, 707 MW;
- Premature closure of PacifiCorp’s and Idaho Power‘s Jim Bridger plant, 2,317 MW; and
- Premature closure of PacifiCorp’s Wyodak plant, 335 MW.
This represents 4,175 MW of the state’s total coal fleet of 6,748 MW. This is Wyoming’s “cliff,” said Parfitt. The Wyoming Public Service Commission determined the amount of stranded investment for these power plants at the year 2020 to be $1.491 billion, broken down as: Dave Johnston – $393 million; Naughton – $326 million; Jim Bridger – $524 million; and Wyodak – $248 million.
These power plants are mostly owned by PacifiCorp, which serves a six-state territory. These costs will be spread to ratepayers within the territory and do not include the cost of replacement power, Parfitt added.
Wyoming has issues with the various “building blocks” proposed under the Clean Power Plan. The first building block involves heat rate improvements and is focused on measures power plant operators can put in place to improve the process by which electricity is generated. The proposed goal for heat rate improvements of 6% for coal plants in Wyoming is not achievable, said Parfitt.
“Our utilities have found 2% to be more in line with what is achievable. EPA’s goal is based on general assumptions that are not representative of Wyoming EGUs capabilities. In particular, many plants in Wyoming have already taken steps to improve heat rates by upgrading their steam turbines and replacing aging equipment. EPA also assumes the efficiency upgrades will largely be paid off by lesser coal purchases. Wyoming’s fuel costs are among the lowest in the nation, evaporating any opportunity to offset these excessive costs. In the proposed rule, EPA expects operators to have heat rate improvements in place by 2019. This is a concern for Wyoming utilities that are juggling compliance and installation of additional technologies resulting from numerous other EPA regulations. EPA should allow gradual implementation of heat rate improvement projects. Implementation of the remaining three building blocks is allowed to occur throughout the compliance period, 2019 through 2029.
“Building block two is the re-dispatch of existing or under construction natural gas combined cycle power plants. Wyoming has little natural gas generation, rendering this component near moot, minus one incorrect assumption by EPA regarding the sole natural gas generating unit in Wyoming.”
“Building block three is renewable energy. EPA credited all of the wind generated in Wyoming to our renewable goal, some 4 million Megawatt-hours, and subsequently applied an unrealistic growth factor. Wyoming consumes only 666,212 Megawatt-hours of this amount while exporting 85% of the wind energy to other states. Since EPA incorporated all the renewable production in Wyoming into our goal, EPA’s proposal requires Wyoming consumption to increase to 9.4 million Megawatt-hours by 2030. This is a 1,415% increase, equivalent to a 52% renewable portfolio standard.
“Building block four is demand side energy efficiency. EPA set goals for the fourth block based upon broad conclusions from other states’ success with energy efficiency programs. The WYPSC performed a detailed analysis of energy efficiency saving potential in Wyoming. Based on Wyoming’s low population, industrial-based load, and other factors, the proposed goal for Wyoming is unrealistic.”