Idaho Power plans to phase out most of its coal-fired generation, partly because its plants are running less often amid persistently low natural gas prices, according to the integrated resource plan the utility filed with state regulators prior to the holiday weekend.

"Because of the low natural gas prices and expanded renewable generating capacity, wholesale electric market prices over recent years have frequently been too low to merit economic dispatch of coal generating capacity," the Boise, Idaho-based utility said in the 20-year IRP it filed Friday with the Idaho Public Utilities Commission.

Instead of installing selective catalytic reduction equipment on Jim Bridger units 1 and 2, which total 1,060 MW, Idaho Power expects to retire them ahead of schedule -- in 2032 and 2028, respectively.

Idaho Power plans to negotiate with PacifiCorp and state regulators over retiring the units. Idaho Power owns one-third of the Jim Bridger plant and PacifiCorp owns the remainder of the facility.

"The challenging economics posed by low wholesale electric market prices, particularly when coupled with the need for capital investments for environmental retrofits, have increasingly led owners of coal-fired power plants to evaluate the cost-effectiveness of continued capital expenditure and continued operation," the IRP said.

SCRs have already been installed on Jim Bridger units 3 and 4, which total 1,060 MW. Idaho Power expects the units to operate at least through 2036, according to the IRP.

Idaho Power has a 10% stake in the 640-MW coal-fired Boardman power plant that is set to be retired at the end of 2020.

The utility is also negotiating the early closure of the 568-MW coal-fired North Valmy plant in northern Nevada with co-owner NV Energy. Idaho Power aims to close one unit in 2019 and the other in 2025.

The utility intends to replace capacity from the plant by periodically importing capacity from Nevada, according to the IRP.

"Idaho Power has expressed the objective to transition away from reliance on coal-fired generating capacity, provided this transition can be conducted in a responsible, economically beneficial and measured manner," the IRP said.

Last year, Idaho Power got 24% of its electricity from coal-fired generation, 39% from hydroelectric facilities, 27% from purchased power and 10% from natural gas and diesel generation, according to the resource plan.

About one-third of the purchased power came from wholesale markets and the rest was bought under Public Utility Regulatory Policies Act contracts with renewable and co-generation facilities.

Idaho Power's hydro assets total 1,709 MW, while PURPA contracts with operating facilities total 1,115 MW. About half of the PURPA contracts are with wind farms and one-quarter with solar facilities.

Meanwhile, Idaho Power expects its load to grow 0.9% a year and its peak demand to increase by 1.4%/year, down from its 1.2% and 1.5% growth forecast included in its 2015 IRP.

--Ethan Howland, newsdesk@spglobal.com
--Edited by Valarie Jackson, valarie.jackson@spglobal.com

 

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