20131112Sierra Club Comments.pdf

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MONTANA ENVIRONMENTAL
INFORMATION CENTER
wwwmefr.org
November 12,2013
FOUNDED 1892 -1
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Idaho Public Utility Commission —
P.O.Box 83720
Boise,ID 83720-0074 t]
Re:Comments on Avista’s Electric Integrated Resource Plan for 2013,Docket #AVU
E-13-07
Dear Commissioners:
The Sierra Club and Montana Environmental Information Center (MEIC]submit these
comments to the Idaho Public Utility Commission (PUC)to better inform your decision
regarding Avista’s 2013 Electric Integrated Resource Plan (IRP]of August 13,2013.
Sierra Club is America’s oldest and largest grassroots environmental organization.Sierra
Club has 1.4 million members and supporters,with over 2,000 members in Idaho.Founded
in 1892,the Sierra Club has been working for over a century to protect communities,wild
places,and the planet itself.Sierra Club is dedicated to exploring,enjoying,and protecting
the wild places of the Earth;to practicing and promoting the responsible use of the Earth’s
resources and ecosystems;to educating and enlisting humanity to protect and restore the
quality of the natural and human environment;and to using all lawful means to carry out
these objectives.
MEIC is a 40-year strong environmental advocacy organization with members across the
country,including Idaho.MEIC works to protect public health and the environment from
air pollution,water pollution and climate change.
The Commission’s Order No.32888,dated September 10,2013,notes that Avista states its
preferred resource strategy provides a uleast reasonable cost’portfolio that minimizes
future costs and risks given actual or expected environmental constraints.”We submit
these comments on behalf of our members,particularly those in Montana and Idaho,to
provide information to the Commission on the significant and increasing risks the Colstrip
power plant (Colstrip)poses to public health and the environment,as well as Avista’s
ratepayers.
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We believe Idaho ratepayers are at risk in two major ways as a result of Avista’s Cotstrip
ownership interest.
1.Coistrip Units 3 &4 are facing potentially significant and unaccounted for direct
costs that would likely be passed on to Idaho ratepayers.See Regulatory Risks of
Colstrip Ownership starting on page 4.Specifically see subsections entitled Regional
Haze;Mercury and Air Toxics Rule;and Coal Costs and the Rosebud Mine.
2.All four Colstrip units are subject to overdue government regulation,citizen
enforcement actions,and increased coal supply costs that could escalate costs for
Idaho ratepayers.See Regulatory Risks of Colstrip Ownership on page 4.Specifically
see subsections entitled Prevention of Significant Deterioration;Greenhouse Gases;
National Ambient Air Quality Standards;Mercury and Air Toxics Rule;Coal
Combustion Waste;and Coal Costs and the Rosebud Mine.
We do not believe these risks have been adequately disclosed or analyzed in Avista’s 2013
Electric IRP,and would urge the Commission to require an analysis that explores the full
breadth of liabilities and risks that the Colstrip plant currently poses to Avista’s ratepayers.
Avista has a 15 percent ownership interest in Colstrip Units 3 and 4.This equates to a
nameplate capacity of about 222-megawatts.Rising costs at all four Coistrip units could
affect Idaho ratepayers directly and indirectly.As Coistrip ages,more upgrades,
maintenance,modifications and expenditures are required.According to the ownership
agreement for Units 3 &4,Avista is a minority owner and is at an apparent disadvantage in
decision-making.This issue could become more important if PPL or one of the other larger
owners sells its interest to another entity or a majority of owners want to close one or
more of the units.
Last year,news outlets reported that PPL Montana was attempting to sell all of its Montana
generation assets.Those assets included 11 hydroelectric dams and two coal-fired power
plants:Colstrip and Corette.On September 26,2013,NorthWestern Energy,Montana’s
largest utility,announced an agreement to purchase PPL Montana’s hydroelectric assets,
but not PPL’s coal assets.NorthWestern’s CEO Bob Rowe said,“Hydro power provides a
nice diversification and mitigates the risk of changing fuel prices and environmental
regulations associated with coal.”Mr Rowe’s comment indicates that NorthWestern
understands the risks posed by Colstrip and did not want to further expose its customers to
those risks.It is important for the Idaho PUC to understand these risks as well.
As you know,the nation’s energy market is engaged in a fundamental shift away from coal-
based electricity resources.At the direction of the Nevada Legislature,NV Energy,Nevada’s
largest utility,is on a path to retire all of its coal generating resources.The Northeast is
essentially coal free.The Canadian Province of Ontario announced plans to be coal-free by
the end of 2014.And the only coal plants in Oregon and Washington are now slated to
retire in 2020 and 2025,respectively.Most recently,the Oregon PUC issued very stern
warnings to PacifiCorp for not including a sufficiently thorough assessment of liabilities
associated with their coal plants.1
1 l1ttp://www.puc.state.or.us/Paesfrneetin!zs/pInemos/2Oi3/2013 historv.aspx
November 12,2013
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These examples and many more across the country underscore the remarkable change in
the electric industry that continues to take place.Less than a decade ago,coal generated
electricity accounted for 50 percent of our nation’s electricity portfolio;in recent years that
number has plummeted to below 40 percent.
This unprecedented trend away from coal generation stems in large part from the fact that
this nation’s existing coal fleet is antiquated and in need of expensive repairs.Coistrip is no
exception.In 2009,Coistrip Unit 4 had a forced outage that lasted more than 6
months and likely increased costs for Avista and other owners.Recently it was
reported to the Montana Public Service Commission (PSC)that Unit 4 again went
down unexpectedly,and is expected to be offline for repairs until early 2014.These
two long-term forced outages in four years undermine any argument that Colstrip is a
reliable source of power.Both incidents occurred during high summer demand.
As organizations with thousands of members across the West,we urge the Commission to
understand these trends and consider the true costs of the outdated,increasingly
unreliable,highly polluting,and liability-laden Coistrip plant.
SPECIFIC CONCERNS REGARDING AvIsTA’s 2013 ELECTRIC IRP
Avista’s shift away from coal has been commendable.Its increasing reliance on efficiency is
an indication that it values public health,the environment,and ratepayers.Unfortunately,
Avista’s 2013 Electric IRP is misguided in regard to Colstrip.
Colstrip Unit 4’s lack of performance in recent years indicates Avista is using the wrong
measurement to analyze its costs and the cost of replacement power.Avista appears to be
analyzing Colstrip’s output based on its nameplate capacity and then analyzing what would
be needed to replace that capacity.To accurately measure the cost of Colstrip’s power
versus the cost of a portfolio without Colstrip,Avista should be analyzing Coistrip on
a megawatt-hour basis,not a potential or nameplate basis.
Measuring Avista’s interest in Colstrip’s nameplate capacity would overestimate the
replacement power needs in its planning scenario without Colstrip.As previously
discussed,Colstrip Unit 4 is not currently operating and has not operated since early July.It
is not expected to resume operations until early 2014.Colstrip Unit 4 experienced a similar
lengthy outage in 2009.In 2011,a year in which Colstrip provided more reliable power,
Avista shows Colstrip providing 162 aMW or 1,416,000 megawatt hours (Appendix
A,Technical Advisory Committee from November 7,2012,p.5).
Despite lengthy forced outages at Unit 4 and Colstrip’s 2011 output of 162 aMW,Avista’s
Preferred Resource Strategy analysis says Coistrip would need to be replaced by a
combined cycle CT gas plant with a nameplate capacity of 270 MW,and provide 248 aMW.
(Table 8.13,p.8-26;and Appendix A,page 54)Avista’s share of Colstrip’s nameplate
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capacity is 222 megawatts.It is unclear how Avista is calculating the actual replacement
power costs should Colstrip no longer be in its portfolio.The IRP’s charts appear to predict
a need for far more energy than necessary to replace Avista’s share of Coistrip’s power.
Analyzing Colstrip’s costs using actual megawatt hours instead of the inflated
nameplate capacity would provide a more realistic cost analysis for planning future
resource needs.
Avista’s 2013 Electric IRP makes reference to the Washington State Utility and
Transportation Commission IRP process (p.8-26).Avista said in a 2011 IRP process,the
UTC requested only two scenarios be measured with regard to Coistrip:without Coistrip
and Colstrip with upgrades from potential environmental regulations.We believe this is a
simplistic and outdated request from the UTC.Puget Sound Energy,which owns the largest
share of Cositrip,was recently required to model additional scenarios for Coistrip.PSE
submitted modeling to the UTC for a low cost,medium cost,high cost,and very high cost
scenario for Colstrip.These modeling scenarios are far more useful for determining the
costs and risks Colstrip may present to ratepayers.We recommend Avista conduct similar
scenario models.
Appendix A contains the Technical Advisory Committee meeting presentations by Avista.
The analysis presented by Avista at the November 7,2012 meeting were flawed.The
economic analysis referred to on page 4 only analyzed potential economic benefits for
Montana.The report that is referenced failed to include analysis of any costs.In other
words,this was not an economic analysis of Colstrip.It was a one-sided look at benefits
with no consideration for impacts or costs.
REGULATORY RISKS OF COLSTRIP OWNERSHIP
EPA is in the process of finalizing and implementing longstanding Congressional directives
related to pollution controls at large power plants.Many of these impending regulations
will implement long-overdue requirements to protect public health,the environment,the
economy,and property rights.These regulations will have significant impacts on the
economics of outdated coal-fired electricity generation facilities.In addition to federal
regulations,Colstrip is also the subject of several pending citizen enforcement
actions that could result in significant modernization and cleanup costs.These
regulatory and legal risks must be factored into the estimated cost to ratepayers.
I.Regional Haze
Sierra Club,MEIC,and the National Parks Conservation Association appealed EPA’s
regional haze decision for Colstrip.Avista’s 2013 Electric IRP make no mention of the risks
posed by our appeal even though it could cost Colstrip’s owners over a hundred million
dollars.We believe those risks should be disclosed and analyzed as part of the planning
process.
Federal law requires a reduction in air pollution that affects some of our nation’s most
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treasured federal lands.The Clean Air Act’s visibility-protection provisions,42 U.S.C.§
7491,require states and the EPA to adopt plans to eliminate human caused haze from
national parks and other protected federal lands,known as Class I areas.The plans must be
designed to make reasonable progress toward eliminating human-caused haze pollution by
imposing Best Available Retrofit Technology (“BART”)pollution controls on some of the
largest and oldest sources of haze-causing emissions.Regional haze regulations generally
require installation of additional air pollution controls to reduce harmful emissions of
nitrogen oxides,sulfur dioxide,and particulate matter.
Colstrip Units 1 and 2 are subject to BART requirements.Colstrip 3 and 4 are subject to
reasonable progress requirements.In September 2013 EPA finalized its BART
determination for Colstrip.EPA required no upgrades at Unit 3 and 4 even though ft
admitted regional haze requirements will not be met by the statutory deadline of 2064.
EPA’s plan for Units 1 and 2 requires reductions in 502 emissions to .08 lbs/MMBtu and
NOx emissions to .15 tbs/MMBtu.2 These new lower NOx emission limits will require the
owners of Colstrip to install new air pollution control equipment.To reduce NOx,Coistrip
Units 1 and 2 must install combustion controls and Selective Non-catalytic Reduction
(SNCR],at a combined estimated capital cost for both units of approximately $27 million,
and additional annual costs of approximately $6.5 million.To reduce SO2,Units 1 and 2
each must install a spare scrubber and conduct lime injection,for a combined estimated
capital cost for both units of $56 million,and additional annual costs exceeding $8 million.
The total capital costs of regional haze compliance for Units 1 and 2 is thus $83 million,
with an additional $14.5 million each year.PPL’s shares of Colstrip 1 and 2 is unregulated.
PPL’s power from these two units is sold into the market.BART compliance costs will likely
be passed on to other utilities,like Avista,who purchase power on the open market.
The National Parks Conservation Association,along with MEIC and Sierra Club,believe that
EPA’s proposal did not go far enough.We appealed EPA’s Colstrip decision to the 9th Circuit
Court of Appeals.We are seeking to reduce emissions limits on all four Colstrip units
beyond what the EPA proposed.We believe the record demonstrates that the installation of
industry-standard pollution controls like Selective Catalytic Reduction (SCR)are cost-
effective,demonstrated to be more effective at removing NOx pollution than SNCR,and are
required under the law.Over three hundred coal units across the country have already
installed SCR technology,including a coal plant in Montana.According to EPA,SCR would
have an approximate capital cost of $156 million at Colstrip Units 1 and 2 and an
approximate increased annual operation and maintenance cost of $20 million.3 EPA did not
even analyze the costs for Units 3 &4.This appeal seeks to require additional pollution
controls at Colstrip Units 3 and 4 under the reasonable progress program.We are now
awaiting a decision by the Ninth Circuit Court of Appeals.
These potential costs are not currently but should be accounted for in Avista’s IRP.
II.Greenhouse Gas Regulations
2 77 Fed.Reg.57864.
77 Fed.Reg.23988
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Coal-fired power plants are the largest industrial source of carbon dioxide emissions today.
According to the U.S.Environmental Protection Agency’s greenhouse gas database,which
encompasses large emissions sources,Coistrip alone was responsible for about two-thirds
of Montana’s greenhouse gas emissions in 2011.Coistrip appears to be Avista’s only coal-
fired thermal resource.This places Avista at an advantage over other utilities that are more
heavily reliant on coal-fired power.However,Avista’s interest in Coistrip means it will not
be immune from future carbon regulations and costs.
On June 25,2013 President Obama delivered a speech about his plan to make the reduction
of greenhouse gas emissions a centerpiece of his second term.He immediately followed
this speech with a directive to EPA to move forward with regulating greenhouse gas
emissions from new and existing power plants.In a memo issued to the Administrator of
EPA,the President directed the agency to finalize regulations for greenhouse gas emission
from existing power plants by June 1,2015.
The Idaho PUC stated just two months ago that “it seems more likely than not that the EPA
will move forward and enact additional regulations of fossil fuels under the federal Clean
Air Act.”5 Many western utilities are planning for some form of carbon regulation before
2018.These utilities are planning for a carbon cost in the range of $1O-$$O/ton.For
example,the Northwest Power Planning and Conservation Council uses an average carbon
cost of $45 per ton.Many utilities rely on the Council’s estimates to plan future resource
needs.In California’s initial carbon bidding for its cap-and-trade program,the cost of
carbon was about $10/ton,and most experts expect this price to rise.British Columbia has
a $30 per ton carbon tax.In addition,federal imposition of a revenue neutral carbon cost is
quickly gaining momentum on both sides of the political spectrum,and could occur by
2018.6
Until a greenhouse gas regulation is finalized,the exact financial impacts to Colstrip are
unknown.However,it is clear that Colstrip and other similar facilities will face significant
costs in some form.Coistrip emitted 17 million tons of greenhouse gases in 2010 and about
14 million tons in 2011.The Idaho PUC must require Avista to incorporate these
financial risks by including a carbon price in future planning efforts.
III.Prevention of Significant Deterioration Permitting
The Clean Air Act’s Prevention of Significant Deterioration permitting program requires
new and modified pollution sources that have the potential to degrade air quality to
conduct an analysis prior to receiving a permit for proposed changes.The analysis is
intended to verify that cost-effective pollution controls will be installed to protect against
unnecessary degradation of air quality.In 2003 and again in 2012,the EPA requested
http://ghgdata.epa.gov/
Idaho PUC Order No 32890 at 12,(September 11,2013).
6 http://www.nationaljournal.com/magazine/the-coming-gop-civil-war-over-climate-change-20130509
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information from the Coistrip owners in investigations of potential violations of these
permitting requirements.EPA and PPL resolved the initial request without providing the
public with PPL’s complete response.EPA’s investigation of the 2012 request into
potential violations is ongoing.
In April 2010 we requested a copy of PPL’s response to EPA’s 2003 request.After years of
haggling,EPA finally agreed in April 2012 to release important documents to the public.
PPL promptly sued EPA to keep that information secret.We are still awaiting the outcome
of that court action.
Also in April 2012 the Billings Gazette published a newspaper article entitled,“Buzzing
with Activity.$70 million maintenance project brings upgrades to Colstrip plant.More than
500 workers busy refurbishing massive boiler in Unit 1.”Shortly thereafter,EPA sent PPL
an information request regarding the upgrades.After the article,we also began
investigating these reported upgrades to determine if they were done in compliance with
the permitting provisions of the Clean Air Act.Our investigation uncovered what
appeared to be a dozen instances in which all four Colstrip units have been upgraded
without obtaining the necessary prevention of significant deterioration permits.In
March 2013 we filed a citizen enforcement action in federal district court in
Montana.A trial date has been set for November 2014.
The outcome of this citizen initiated enforcement action could result in a requirement for
the Colstrip owners to go through a permitting process and install modern air pollution
control equipment at all four units.These potential costs must be accounted for in the
planning process.
IV.National Ambient Air Quality Standards
National Ambient Air Quality Standards (NAAQS)generally impose ambient air quality
standards for ozone,lead,particulate,sulfur dioxide,nitrogen dioxide and carbon
monoxide.A NAAQS by itself does not require emissions reductions from a specific source.
Instead emissions reductions from specific sources could be required if the source causes
or contributes to an exceedance of an ambient standard.
EPA is required to regularly review and revise NAAQS based on current health-based
scientific literature.ft has done so recently for sulfur dioxide,particulates,oxides of
nitrogen and ozone.If a source contributes to an exceedance of the standard,it could be
required to install updated air pollution control equipment.As previously mentioned,
updating air pollution control equipment for sulfur dioxide or nitrogen oxides could cost
several million dollars to several hundred million dollars depending on the facility and the
extent of the exceedance.
In 2010 EPA updated the NMQS for sulfur dioxide.Sierra Club contracted with
independent air pollution modelers to review Colstrip compliance with the new sulfur
dioxide standard.That air dispersion modeling found that Colstrip’s emissions likely
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violate the one-hour sulfur dioxide NAAQS.7,8 Nonattainment status for a county requires
those sources causing or contributing to the violation to decrease emissions by installing
updated pollution controls or curtailing operations.As mentioned above,this cost could be
significant.
The potential NMQS violation near Coistrip place it under a significant risk of requiring
additional sulfur dioxide pollution controls.Colstrip has already been ordered to meet
lower sulfur dioxide emission limits as a result of EPA’s BART determination mentioned
above.However,EPA’s BART decision was modest and only required reductions at Units 1
and 2.Coistrip may have to meet far lower emission limits at all four units in order to
comply with the new health-based sulfur dioxide NAAQS.
Again,these potential costs must be accounted for in the planning process.
V.Mercury and Air Toxics Rule
Montana coal-fired power plants are required to control mercury under a state rule
adopted in 2007.While all required facilities have been controlling mercury since
January 1,2010,the EPA’s more recent Mercury and Air Toxics (MATs]rule is slightly
different from the state rule in that it establishes emission limits from coal-fired power
plants for ten non-mercury metals and acid gases in addition to mercury.The rule also
establishes work practices to minimize creation of dioxin and furans.Sources could be
required to control toxic emissions by installing updated air pollution equipment (i.e.,
scrubbers for acid gases and baghouses for metals].Generally,the compliance deadline for
MATs will be 2015,with an opportunity for a one-year extension for facilities that
demonstrate an inability to comply with MATs by the deadline notwithstanding diligent
efforts.The units with the greatest potential compliance costs are unscrubbed coal units
and those without baghouses.Because the rule does not allow trading,coal units that fail to
comply must cease operation.
No Colstrip units have baghouses or modern sulfur dioxide controls.Colstrip must upgrade
its technology to comply with MATs.Recent stack tests for Colstrip Units 1 and 2
demonstrate particulate emissions at or above the particulate MATs standard of 0.30
lb/MMBtu.While Coistrip is investigating whether upgrades to existing equipment may
suffice,baghouses may be required.PPL submitted an analysis of potential particulate
control technologies to EPA that estimated annual costs of an ESP or baghouse at
$16-21 million for each unit.9 Upfront capital costs would be much higher:Multiplying
PPL’s capital cost estimate at PPL’s Corette plant by the four Colstrip units,shows the
capital cost of baghouses at two Colstrip units could be $76 million.
‘“Air Dispersion Modeling Analysis For Verifying Compliance with the One-Hour SO2 and N02 NMQS:PPL
Montana —Coistrip Power Plant,”Prepared by Camille Marie Sears,June 11,2012
8 Memo to Jenny Harbine from Lindsey Sears,Coistrip S02 modeling,Sept.21,2012
PPL Montana,Best Available Retrofit Technology (HART)Assessment,Colstrip Generating Station (Aug.
2007).
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Again,these potential costs must be accounted for in the planning process.
VI.Coal Combustion Waste
Coistrip has hundreds of acres of wet coal combustion waste surface impoundments.The
State of Montana has acknowledged that Colstrip’s impoundments have been leaking since
they were built in the 1980’s.Contamination from these leaking impoundments has
already resulted in multiple lawsuits in which Coistrip’s owners paid neighboring
landowners over $25 million.The cost to actually remediate the hundreds of acres of
leaking sludge impoundments will likely be far more expensive.
In June 2010,EPA proposed two primary regulatory options for regulation of coal waste
disposed of in landfills and/or surface impoundments:(1)regulation of the materials as
hazardous wastes under Subtitle C of the Resource Conservation and Recovery Act
(“RCRA”];or (2]regulation of the materials as non-hazardous wastes under Subtitle D of
RCRA.The proposed regulatory requirements of both options likely would lead to the
accelerated closure of all existing unlined landfills and unlined wet surface impoundments,
although the agency’s “D Prime”option would allow for the continued use of existing
landfills and surface impoundments through their useful life as long as certain
environmental and safety standards were met.Under the two primary options being
considered by EPA,coal waste disposal practices will be impacted significantly and likely
result in significant compliance costs and/or may lead to the closure of existing disposal
facilities.EPA’s regulations will generally require groundwater monitoring,double lined
landfills,closure of existing facilities,and possible conversion to dry ash disposal facilities,
at a cost of several million dollars to several hundred million dollars at each coal plant.
EPA is expected to finalize the coal waste rule in 2014.Compliance deadlines are expected
in the 2016-2018 timeframe.Puget Sound Energy,a 1/3rd owner of Coistrip,already
estimated the costs to comply with EPA’s CCW regulations could exceed $42 -125
million.10 Until EPA finalizes this rule,the total cost of complying with the
regulations at Colstrip remains uncertain.
The State of Montana currently has jurisdiction over the regulation of Colstrip’s waste
disposal facilities under the Montana Major Facility Siting Act.In July 2012 the State
entered into an Administrative Order on Consent (AOC]with the owners of Colstrip to
address certain issues regarding coal ash disposal.In cooperation with the National
Wildlife Federation,our organizations brought a citizen-based enforcement action
challenging the AOC as inadequate under Montana law.If successful,this litigation
could require upgrades to Colstrip’s waste impoundments and cleanup of
contaminated groundwater.These long-known remediation risks and associated
costs must be accounted for in the planning process.
VII.Coal Costs and the Rosebud Mine
10 Puget Sound Energy’s 2013 Integrated Resource Plan,Appendix J.
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We believe there are fuel cost risks that have not been accounted for in Avista’s IRP.Avista
reported that it is currently negotiating a fuel supply extension for Colstrip.11 We believe
the results of this negotiation must be accounted for in this IRP in order to ensure that the
costs and risks of Colstrip are accurately represented to ratepayers and the Commission.
As a mine-mouth operation,Coistrip relies entirely on coal from the adjacent Rosebud
Mine.The Rosebud mine is currently owned and operated by Western Energy Company,a
subsidiary of Westmoreland Coal.The Rosebud mine has produced coal for decades,and its
costs are steadily increasing as the mine moves to new areas with larger volumes of
overburden.A recent industry report identified the Rosebud Mine as having the
highest production costs for coal in the Powder River Basin,at $16 per ton.12 These
increasing costs could be passed on to ratepayers through cost-plus contracts,which
are set to expire in 2019.During NorthWestern Energy’s most recent IRP process,they
identified the rising costs associated with the Rosebud mine,noting that the mine is
experiencing an $8/ton premium compared to base price forecasts.The cost of coal will
likely increase further if and when the contracts are renegotiated with Western Energy for
coal from the Rosebud Mine.
If the owners of Coistrip seek an alternative supply of coal,most likely from a
different Powder River Basin mine,there will be additional costs associated with the
permitting and construction of a rail unloading facility.The construction of such a
facility would cost tens of millions of dollars.An alternative coal supply may also require
boiler modifications and/or additional planned outages,as the Colstrip boilers were
originally constructed to burn coal from the Rosebud coal seam (for example,Units 1-2
require coal with a relatively low sodium content].
The Rosebud Mine is also the subject of a recent citizen initiated civil enforcement
action that could further increase the cost of coal to Colstrip.The enforcement action
challenges the adequacy of the State of Montana’s coal strip mining regulatory program in
complying with the federal Surface Mining Control and Reclamation Act of 1977 (SMCRA].
30 U.S.C.§1201-1328.Specifically,the enforcement action alleges that the Montana
regulatory program has exhibited a pattern of failing to ensure that mining activity does
not harm water quality or damage the hydrology of streams and groundwater in Montana,
as required by SMCRA.
Conclusion
There are multi-million dollar costs and liabilities that loom for the nation’s coal-fired
electricity resources,including Colstrip.Avista’s ratepayers could eventually be on the
hook for many of these financial and environmental risks.
11 Avista’s 2013 Electric IRP,Appendix A,Technical Advisory Committee meeting,November 7,2012,page 6
12 Powder River Basin Coal Resource and Cost Study:Campbell,Converse and Sheridan Counties,Wyoming;
Big Horn,Powder River,Rosebud and Treasure Counties Montana.Prepared for Xcel Energy by John T.Boyd
Company.September 2011.
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PPL apparently recognizes the risks associated with its coal assets.In September 2012,it
announced it would “mothball”the Montana-based Corette plant.Pete Simonich,PPL
Montana vice president and chief operating officer,stated in a news release,“[ojur detailed
analysis has shown that to meet the emission reductions required by EPA’s mercury and
air toxics standards,we would need to invest $38 million in the Corette plant,”and “[w]e
simply cannot justifr that level of spending in the current wholesale power market in the
Northwest.”3
NorthWestern Energy recognized the risks and apparently declined to purchase PPL’s
share of its coal generation facilities,and is instead attempting to exclusively purchase the
hydroelectric assets.
Puget Sound Energy acknowledged the risks last year when its Vice President of Corporate
Affairs,Andy Wappler,said,“[wJe know the end of coal is soon....We know coal is a dead
end.”4
When NV Energy announced its plan to close its Nevada coal generation plants,its CEO
said,“[w]e are looking at the future of Nevada’s energy needs and saying that coal is not
part of the long-term future of Nevada....We think the costs are too great,the
environmental concerns and the costs associated with those environmental concerns are
too great...Coal is a fuel of the past in our state.”15
The Colstrip plant is contaminating groundwater,emitting enormous amounts of air
pollution,and is one of the nation’s largest sources of greenhouse gas emissions.In light of
the above-described risks,the Idaho PUC should work to protect consumers and the
environment by ensuring that all of the above-described risks are included in the planning
process.
Thank you for your careful consideration of the numerous legal and financial liabilities
associated with the ownership of Colstrip.
Sincerely,
Zack Waterman
Sierra Club
Anne Hedges
Montana Environmental Information Center
13 Billing Gazette,September 20,2012.
14 http outubecom/watch7v=JHdS8OBfyjacJeatureyoutube.See minute 28:22.
15 Ralston Reports,4/3/13,News 3 (NBC)Las Vegas