Note: If you’d like to know more about energy-related issues, get my monthly Energy News sent to your inbox. Sign up using the form in the upper right corner of this webpage.
It’s hard to keep track of all the controversial actions coming from the Trump administration these days. One ongoing saga has been the Department of Energy’s repeated attempts to bail out failing coal and nuclear power plants. This issue is a big deal in the eastern United States where electricity generation is a more competitive market and these dirty old plants just can’t match the lower costs of natural gas and renewable energy. Meanwhile, utilities across the West are receiving cost-effective bids for clean energy, like solar combined with battery storage.
This fall, Idaho’s utilities will update their 20-year integrated resource plans. For these plans to provide a pathway to a clean energy future, they must include facts on coal’s rising costs and the rapidly declining costs of clean energy options. The desperate rhetoric from the Department of Energy – and the strong rebuttal from industry experts – contains lessons for Idaho’s clean energy future.
Another Desperate Coal Bailout
The DOE is nothing if not persistent. Under this administration, the agency has floated various proposals to mandate purchases from failing coal and nuclear plants. Last winter, we told you that the Federal Energy Regulatory Commission (FERC) unanimously rejected the DOE’s argument that "baseload" coal is essential for maintaining electric reliability. Now the North American Electric Reliability Corp. (NERC), the entity responsible for ensuring a reliable system, reports that overall grid resilience is improving despite coal retirements.
Grasping for more straws, the DOE recently pushed a new argument – that coal and nuclear are essential for national security concerns -therefore, the federal government can use "a Cold War-era nationalization law to keep the plants online."
Former FERC chair under George W. Bush, John Wellinghoff, summed up this proposal nicely: "What Trump’s doing is going back to a Soviet-style system. This will blow the market up." And speaking to members of Congress, current FERC Commissioner Richard Glick explained: "FERC has a responsibility to ensure the reliability and resilience of the grid. And we should take our duty seriously. But we cannot try to stop the natural evolution of this industry by claiming there is a national security emergency unless there is evidence that that emergency exists.”
Forcing consumers to make purchases from uneconomical power plants is no way to operate a free market system. And alleging a nonexistent national security risk is irresponsible leadership. What’s worse, these DOE coal proposals ignore the real risks facing the system that were identified by NERC: cyber security, failed equipment at substations, and human error. Instead of rhetoric, Idahoans deserve fact-based decisions that address our need for reliable, affordable energy that protects the air we breathe. Fortunately, the facts are on our side.
Western Clean Energy Is Local, Secure and Affordable
Here in Idaho and much of the West, our utilities do not operate in an organized market for most electricity. Instead, state utility commissions oversee decisions made by local utilities about which power plants to rely on. This state-level oversight provides some separation from the federal proposals slung by DOE.
For example, the giant Navajo Generating Station is facing closure because it is too expensive. The U.S. Department of the Interior tried to use a weak federal connection to strong-arm the Central Arizona Project into buying some of the output. But CAP is signing deals for solar power at 2.5 cents per kilowatt-hour, compared with the estimate of 5 cents per kilowatt-hour from the coal-powered Navajo plant. It’s not a war on coal when businesses choose a fuel that is half the cost of alternatives.
These low-cost solar prices are not unique to Arizona. Across the West, utilities are shuttering coal plants as clean energy becomes plentiful and affordable. Nevada Energy recently released prices for solar alone in the low to mid $20 per megawatt-hour. When combined with battery storage, the prices are still competitive with the benchmark option of a natural gas power plant. And the solar prices are fixed over the 25-year contract, unlike the highly volatile gas price.
Planning for Idaho’s Clean Energy Future
As we prepare for the next round of integrated resource plans for Idaho, ICL is collecting the facts on coal and clean energy options. This round of plans matters because they will address several coal plants that serve Idaho – Colstrip (MT), Jim Bridger (WY) and North Valmy (NV).
Nevada Energy’s experience matters for Idaho because this utility is co-owner of the Valmy coal plant that Idaho Power plans to retire in the 2020-2025 timeframe. These solar prices, for specific projects that can be built in short order, confirm that replacing Valmy, which costs about $40 per unit, will save Idahoans money while protecting the air we breathe.
For the Colstrip coal-fired power plant, ICL recently joined a settlement regarding the merger of Avista and Hydro One. The settlement includes a pathway for replacing Colstrip with clean energy. There we will focus on the looming bankruptcy and rapidly rising reclamation costs of the sole-source coal supply from Westmoreland.
The Jim Bridger plant faces expensive pollution controls, rising fuel supply costs, and difficulty competing with clean energy options. As we engage with Idaho Power and PacifiCorp, ICL will support these utilities’ initial determination to retire half of Bridger in the late 2020s. With the abundance of affordable, reliable clean energy options here, we know that investing Idaho’s energy dollars in our own resources instead of out-of-state coal plants is the right strategy for our state.
Thankfully, because the Idaho Public Utilities Commission oversees our utilities’ decisions, we can focus on power plants that serve Idaho instead of the desperate rhetoric coming from the Department of Energy.