20220131Status Update.pdf

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Benjamin J. Otto (ISB No. 8292)
710 N 6th Street
Boise,lD 83701
Ph: [phone] x ll2
Email : [e-mail]
Attorneyfor the ldaho Conservation League
Rose Monahan, (CA Bar No. 329861) Qtro hac vice)
Sierra Club
210l Webster Street, Suite 1300
Oakland, California 94612
Ph: (415) 977-s704
Email : [e-mail]
Attorney for Sierra Club
IN THE MATTER OF THE
APPLICATION FOR AUTHORITY
TO INCREASE RATES. RECOVER
COSTS JIM BRIDGER POWER
PLAI\T
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. IPC.E.ZI.I7
IDAHO CONSERVATION LEAGUE
AIID
SIERRA CLUB
STATUS UPDATE
The Idaho Conservation League (lCL) and the Sierra Club submit the following status
update to the ldaho Public Utilities Commission regarding recent EPA action that affects the Jim
Bridger power plant. This filing will provide background on the recent EPA action as well as
outline the ways in which the EPA action may affect this docket.
We ask the Commission to reopen this docket so that Idaho Power can address the impact
of EPA's action on the issues raised in the utility's application in this proceeding including "the
incremental costs and benefits associated with the Company's cessation of participation in coal-
fired operations at Bridger."l
1 Notice of Application; Order No. 35088, Case No. IP.C-E-21-17 , p. I (June 24, 2O2l).
IPC-E-21-17 January 31,2022
STATSUPDATE I
l. Status Update on EPA's Action Against the Jim Bridger Power Plant.
Idaho Power initiated this docket in June of 2021with the intent to permanently close Jim
Bridger coal Units I and 2.ln fall of 2021, PacifiCorp released its IRP which outlined a plan to
convert Bridger coal Units 1 and2 to natural gas. As a result, Idaho Power moved to suspend this
docket until the conversion plans and the proposed Wyoming SIP (described in the next
paragraph) were finalized.
The Commission is aware through ICL's and Sierra Club's October 1,2021filing, as
well as filings from Idaho Power in this docket, that Bridger Units I and2 have outstanding
Regional Haze obligations under the Clean Air Act.2 Specifically, under Wyoming's State
Implementation Plan (SIP), which was proposed by Wyoming in 201I and approved by EPA in
20l4,PacifiCorp was required to install selective catalytic reduction (SCR) pollution control
technology on Bridger Units I and2by December 3l of 2022 and202l, respectively. This SCR
technology, which reduces pollution that affects air quality in order to protect visibility in the
country's national parks and Class I Wildemess Areas, would bring Bridger into compliance
with regionalhaze requirements. Although neither Idaho Power nor Bridger's co-owner
PacifiCorp challenged the SCR requirement, neither utility has taken any action to install SCR
technology on either unit. Due to the utilities decision to ignore federal law, Bridger Unit 2 is
now out of compliance with the Clean Air Act.3
In 2018, Wyoming submitted a proposed amendment to its SIP which would remove the
SCR installation requirements for Bridger Units I and2. As we neared the end-of-year2021
2 Idaho Conservation League and Sierra Club Response to Join Motion to Suspend Schedule, Case No. IPC-E-2I-
17,p.2 (Oct. l, 2021); see also Joint Motion to Suspend Procedural Schedule, Case No. IPC-E-21-17, p. 2 (Oct. l,
2021).
3 While Bridger Unit 2 is currently authorized to operate in violation of the Clean Act Air under Wyoming Govemor
Gordon's "emergency order," subsequent EPA action nullifies the emergency order, both of which are described
below.
IPC-E-21-17
STATS UPDATE 2
January 31,2022
deadline for the installation of SCR on Unit 2, EPA had not yet taken action on Wyoming's
proposed SIP, meaning that the SCR requirement remained in effect. In December 202l,the
Wyoming Governor then issued an emergency order under the Clean Air Act which permitted
Bridger Unit 2 to operate in violation of the Clean Air Act for four months, or until April 30,
2022. This emergency order was referenced by Idaho Power in its December 30, 2021 letter in
this docket.a
On January 18,2022, EPA announced its proposalto deny Wyoming's proposed SIP
amendment.s EPA will take public comments on this proposal until February 17,2022 after
which it will issue a final decision. Because it is highly likely that EPA will deny Wyoming's
proposed SIP, Wyoming's previous 2014 SIP and the SCR requirements for both Bridger units
will remain in effect. Bridger Unit2, which is currently out of compliance, will be required to
close as soon as the EPA denial is finalized or the expiration of the governor's emergency order
on April 20,2\zz,whichever comes first. Bridger Unit I will have until December 31, 2022to
install SCR technology or shut down operation.
ll. Impacts of EPA Action on this Cost Recovery Docket
In this docket, Idaho Power seeks cost recovery for the end ofcoal operations at all four
Bridger coal units by 2030. The Company states that 50 percent of the total outstanding capital is
due to SCR's installed at Units 3 and 4, as required by the Wyoming SIP.6 The Company does
not include the costs of SCR's at Units I and2, even though the federally enforceable Wyoming
SIP requires these in2021 and2022.7 Instead, Idaho Power claims Wyoming's Revised SIP will
a Update, Case No. IPC-E-21-17, p. 2 (Dec. 30,2021).
s Air quality State Implementation Plans; Approvals and Promulgations: Wyoming; Proposed Revisions to
Regional Haze State Implementation Plan; Disapproval, 87 Fed. Reg. 2571 (proposed Jan. 18, 2022) (to be codified
at 40 C.F.R. pt.52).
6 Application, Case No. IPC-E-21-L7,pp. 3-4 (June2,202l).
7 Addelman Direct Testimony, Case No. IPC-E-2I -17,p.16 (Jwe2,2021).
IPC-E-21-17 January 31,2022
STATSUPDATE 3
remove the SCR requirements. Now the opposite has occurred, and EPA proposes to enforce the
2014 Wyoming SIP. Idaho Power's choice to follow a plan that does not comply with federal
Clean Air Act requirements has at least three ongoing impacts on this docket.
First, Idaho Power will likely be forced through the EPA action to select a specific date
for either closure or gas conversion of Bridger Units I and 2. In Idaho Power's June 2021
application in this docket, Idaho Power proposed a cost recovery plan that accounted for flexible
closure dates.s A specific closure/conversion date will alter the way in which Idaho Power will
want to recover its costs from ratepayers.
Second, Idaho Power may be faced with fines for its non-compliance with the Clean Air
Act if EPA chooses to initiate an enforcement action against PacifiCorp, which could expose
Idaho Power customers to financial liability.e These fines could be sizable - up to $100,000 per
violation per day - and would impact Idaho Power's cost recovery for the plant as well as rates
paid by Idaho Power customers.
Third, there are significant concerns that Pacificorp does not have a legally viable
pathway to keep Bridger Units I and 2 operating, and this uncertainty places Idaho Power
customers at significant risks. Although Idaho Power and PacifiCorp have expressed their
intention to convert Bridger Units I and 2 from coal to goS,r0 EPA stated that neither Wyoming
nor PacifiCorp sought approval for this alternative compliance strategy in the proposed SIP.ll It
is unclear why the gas conversion alternative was not proposed to EPA. It is also unclear how
8 Application , supra at 5-6
e +Z U.S.C. $7a13(aXl); 42 U.S.C. $7413(b) (allowing EPA to issue civil penalties against major stationary sources
that are out of compliance with State Implementation Plans); see also Table 1,40 C.F.R. $19.4 (sets civil penalties
under 42 U.S.C. $7413(b) at $102,638 per day per violation).
10 See, e.g.,Joint Motion to Suspend Procedural Schedule, supra at 4.
11 See EPA, EPA Propose to Disapprove Revisions to ll/yoming's 2014 Regional Haze Plan as Inconsistent with the
Clean Air Act (Jan. 12,2022), https://www.epa. gov/newsreleases/epa-proposes-disapprove-revisions-wyomines-
20 4-reqional -haze-plan-inconsi stent-O (last visited J an. 25, 2022).
tPC-E-2t-17
STATS UPDATE 4
January 31,2022
Idaho Power and PacifiCorp plan to ensure that customer capacity needs are met in the likely
scenario that Bridger Units I and 2 are forced to close before the utilities are able to acquire the
appropriate permits and make the structural changes necessary to convert the units to gas.
Ill. Relief Requested
ICL and Sierra Club request that the Commission reopen this docket so that Idaho Power
can update its filing based on EPA's clear direction to uphold the permits and Idaho Power's
clear commitment to convert Units I and 2 to gas, both of which are not included in the
Application or Testimony in this docket. In addition, reopening this docket will allow parties to
explore the impacts of EPA's recent actions on Idaho Power's proposal through discovery.
IPC stated in its October,202l motion to suspend this docket that it could not respond to
discovery until "gteater clarity is achieved" regarding the Bridger emission limits and the coal-
to-gas conversion.l2 We now have more clarity about both issues. Both IPC and PacifiCorp's
IRP Action Plans state that the utilities will move forward with converting the coal units to gas
beginning this year.l3 EPA has clearly communicated their intent to uphold the pollution
emission limits that the Bridger owners have known about since 2014. Given this clarity, Idaho
Power has sufficient information to update its filing to include information about the gas
conversion and to respond to discovery requests, particularly those related to its plan for
Bridger's closure and compliance with EPA mandates. At the very least, Idaho Power should
address how its planned gas conversion and coal unit depreciation will be impacted by the
scenarios in which EPA: l) requires immediate closure of Unit 2 and initiates a civil enforcement
action which results in fines; and 2) EPA requires closure or SCR installation of Unit I by the
end of2022.
12 Joint Motion to Suspend Procedural Schedule, supra at 4.
13 See Idaho Power 2021 IRP at 167 (Action Plan); PacifiC orp 2021 lW at 322 (Action Plan).
IPC-E-21-17 January 31,2022
STATSUPDATE 5
Although these issues could be addressed in an IRP or rate case, this docket is the most
appropriate forum to address Bridger issues. The PUC has consistently stated that "[t]he
appropriate place to determine the prudency of the IRP or Idaho Power's decision to follow or
not follow it, and the validation of predicted performance under the IRP, is a general rate case or
other proceeding where the issue is noticed."r4 While Idaho Power's2021IRP includes the
planned conversion to gas, this proceeding relates specifically to Bridger issues. Thus, it is a
better docket to address EPA's action related to Bridger than the upcoming IRP proceeding.
Idaho Power has also not indicated when they intend to file a general rate case. Additionally, in
this depreciation proceeding "the Company asked to establish a balancing account and the
necessary regulatory accounting to track the incremental costs and benefits associated with the
Company's cessation of participation in coal-fired operations at Bridger."ls The implications of
EPA's actions and the gas conversion are directly related to the costs and benefits of Idaho
Power's participation in the Bridger plant.
As described above, Bridger's non-compliance with federal law has immediate and
potentially serious implications for ldaho ratepayers. Idaho ratepayers have a right to know how
Idaho Power will address the risk that it created with its inaction and poor planning. Time is of
the essence to create a plan to protect Idaho Power customers before this crisis worsens.
Respectfully submitted this 3lst day of January,2022
/s/ Rose Monahan
Rose Monahan
Sierra Club
/sl Beniamin J Otto
Benjamin J. Otto
Idaho Conservation League
1a Order No. 34gig, Case No. IPC-E-19-19, p. 25 (Mar. 16,2O2l) (Order which acknowledges Idaho Power's 2019
rRP).
15 Notice of Application; Order No. 35088, supra al 1 .
IPC-E-21-17 January 31,2022
STATSUPDATE 6
CERTIHCATE OF SERVICE
I hereby certify that on this 3lst day of January 2022,1delivered true and corect copies
of the foregoing STATUS UPDATE to the following persons via the method of service noted:
lsl Beniomin J Otto
Benjamin J. Otto
Idaho Conservation League
Electronic mail only (see Order 35058)
Idaho Public Utilities Commission
Jan Noriyuki, Secretary
secretary@puc. idaho. gov
Erick Shaner
erick. [e-mail]. gov
Idaho Power Company
Lisa D. Nordstrom
Matt Larkin
[e-mail]
[e-mail]
[e-mail]
Industriol Customers of ldaho Power
Peter J. Richardson
Richardson Adams, PLLC
[e-mail]
Dr. Don Reading
[e-mail]
City of Boise
Ed Jewell
[e-mail]
ej ewel l@cityofbo ise.org
Clean Energt Opportunities for ldaho
tPc-E-2t-17
STATS UPDATE
Clean Energt Opportunity
Michael Heckler
Courtney White
[e-mail]
[e-mail]
Kelsey Jae
[e-mail]
Micron Technologt, Inc :
Jim Swier
[e-mail]
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
darueschhoff@ho I I andhart. com
tnelson@ho I landhart.com
awj [e-mail]
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January 31,2022