HomeMy WebLinkAbout20210305Sierra Club Comments on IRP Extenstion Request.pdfSIERRA CLUB COMMENTS 1
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY
MOUNTAIN POWER’S 2021 INTEGRATED RESOURCE PLAN
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CASE NO. PAC-E-21-03 SIERRA CLUB COMMENTS ON PACIFICORP’S PETITION FOR
EXTENSION
Sierra Club respectfully submits the following comments on PacifiCorp’s petition for an
extension to delay filing its 2021 Integrated Resource Plan (“IRP”) by approximately five
months, or until September 1, 2021. For the reasons set forth below, Sierra Club requests that the
Commission direct PacifiCorp to file its IRP no later than July 15, 2021, which will still provide
the Company with more than sufficient time to incorporate the final shortlist from its 2020 All-
Source Request for Proposals (“2020AS RFP”) as well as complete the necessary model runs to
establish a meaningful range of resource portfolios. Finally, in light of the additional time
provided to complete the IRP, the Commission should direct PacifiCorp to provide additional
information and perform specific modeling runs by July 15, 2021 in order to ensure full
consideration of likely federal regulatory requirements.
I. PacifiCorp’s Reasons for Delaying its IRP Filing Do Not Justify a Five Month Delay and Such a Delay Is Not in the Public Interest
PacifiCorp wants to delay for two reasons. First, the Company says it needs additional
time to incorporate the final shortlist from its 2020AS RFP, which will not be ready until June 1,
2021. Second, the Company says it has been unable to complete model runs of its resource
portfolios, due to complications with its new modeling software, PLEXOS.
Perhaps some delay might be necessary due to these developments, but a five month
delay is unreasonable. A shorter extension—until July 15, 2021—will provide the Company with
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2021March 5, PM 1:39
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UTILITIES COMMISSION
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sufficient opportunity to both incorporate the 2020AS RFP final shortlist into the Company’s
resource plans and complete the necessary model runs for those resource portfolios. This
extension will provide PacifiCorp with approximately seven weeks to utilize the information
obtained through the 2020AS RFP final shortlist. And the Company did not say why it would
need all of June, July, and August to incorporate this information into the IRP. Additionally,
while PacifiCorp may be facing challenges with the PLEXOS modeling software, the Company
has had over a year to experiment with this software and work with the PLEXOS provider to
resolve any problems. PacifiCorp will continue to have an opportunity to complete successful
model runs from now through July 15, 2021—over four months away.
Minimizing the delay in filing the Company’s IRP is important because this delay will
undoubtedly result in a cascade of other delays for a multitude of other proceedings. For
instance, PacifiCorp files an “IRP update” in Oregon1 between its IRP filings; however, if the
initial IRP filing is substantially delayed, the update may not occur (as happened in the delayed
2019 cycle). The country’s electricity system is transforming rapidly with reductions in the costs
of renewable energy and battery storage, as well as falling gas prices, supplanting coal-fired
generation. As a result, continued spending on fossil-fuel generation resources requires close
scrutiny by public utility commissions that must occur on a timely and regular basis.
Additionally, changes in energy demand resulting from the COVID-19 pandemic have further
thrown previous assumptions into disarray. Receiving regular IRP updates is critical in this
rapidly changing environment to ensure that PacifiCorp is remaining nimble and responsive to
market realities. Sierra Club is concerned that delaying the 2021 IRP filing until September will
1 In the Matter of Pub. Util. Comm’n. of Oregon Investigation into Integrated Planning Requirements, UM 1056, Order No. 07-002 (Guideline 3) (Or.P.U.C Jan. 8, 2007) (corrected Feb. 9, 2007), available at https://apps.puc.state.or.us/orders/2007ords/07-002.pdf.
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result in the Company missing its IRP update in Oregon.
Other proceedings are likely to be delayed as well. In California, PacifiCorp was ordered
to file a retirement plan for its coal facilities serving California customers, and any associated
request for accelerated depreciation, by the second quarter of 2021.2 Due to its request to delay
the IRP filing, PacifiCorp has already requested delaying this filing in California until 2022.3
Similar delays are likely to occur for filings, for example, required under Washington’s Clean
Energy Transformation Act and/or the anticipated coal reassignment dockets, pursuant to the
2020 Multi-State Protocol, that have already been delayed by a full year. Even in proceedings
that continue to move forward, such as dockets where PacifiCorp seeks to recover fuel costs and
approval for its coal supply agreements, stakeholders and commissions are at a disadvantage in
evaluating these costs and decisions without the benefit of the latest IRP modeling.
II. PacifiCorp Should be Directed to Release Certain Information to the Public and Produce Specific Model Runs in Light of the Additional Time Provided to Complete its IRP
Were the Commission inclined to grant PacifiCorp’s request to delay filing the IRP, the
Commission should ensure that additional information is provided to both the Commission and
the public in order to ensure that the delayed IRP filing contains sufficient information for
informed decision-making.
2 In the Matter of the Application of PacifiCorp (U901E), an Oregon Company, for an Order Authorizing a General Rate Increase Effective January 1, 2019. And Related Matter, A.18-04-002 and I.17-04-019, D.20-02-025 (as modified by D.21-01-006), at 29, Ordering Paragraph 18 (Cal.P.U.C Feb. 6, 2020); available at https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M327/K565/327565618.PDF (D.20-02-025), https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M360/K526/360526731.PDF (D.21-01-006). 3 A.18-04-002/I.17-04-019, Petition of PacifiCorp (U 901 E) for Modification of Decision 20-02-025 and Request
for Expedited Consideration (Cal.P.U.C. Feb. 12, 2021), available at https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M365/K301/365301705.PDF.
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First, PacifiCorp should be directed to make anonymized bid data from its 2020AS RFP
publicly available. In 2017, Xcel Energy provided a “Solicitation Report” detailing the results of
an all-source RFP issued in support of its 2016 Electric Resource Plan.4 Noting that the response
was “unprecedented with 430 total individual proposals,” with over 350 of those proposals being
for renewable energy or renewable energy with storage, the update went on to provide
anonymized information on the bids received, including the median levelized price of the bids
received for each generation type.5 While bidder identity along with the number of bids proposed
by generation type remained highly confidential, Xcel’s Solicitation Report provided extremely
useful public information for stakeholders engaged in the IRP process. PacifiCorp should
likewise be directed to provide a similar report as part of its IRP filing. Moreover, PacifiCorp
should be directed to include the RFP results as inputs in its IRP modeling, as the delay in filing
its IRP is largely based on the need for the 2020AS RFP short-list.
Second, the Commission should ensure that certain modeling runs are included within the
IRP filing. Specifically, PacifiCorp should model selective-catalytic reduction (“SCR”) pollution
control technology at its Hunter, Huntington, Wyodak, and Jim Bridger power plants, all of
which have units that are likely to require SCRs under the federal Clean Air Act’s Regional Haze
program. PacifiCorp’s model should reflect SCR installation costs as part of continued costs to
operate these plants, and PacifiCorp should continue to pursue endogenous selection of coal
retirement dates, as is current practice. As the Commission is aware, neither Phase I nor Phase II
Regional Haze requirements are final. However, the Biden administration has signaled its
intention to move quickly on climate and pollution regulation at power plants. Yet, at this time,
4 Xcel Energy, 2017 All Source Solicitation 30-Day Report (filed in Colorado PUC Proceeding No. 16A-0396E) (Dec. 28, 2017), available at https://www.documentcloud.org/documents/4340162-Xcel-Solicitation-Report.html. 5 Id.
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PacifiCorp has indicated it does not intend to include the costs of SCRs in any of its model runs,
because the Company anticipates complying with Regional Haze requirements by reducing
operating capacity as a means of meeting pollution reduction requirements. The EPA has never
before accepted reduced operating capacity in lieu of installation of pollution control
technologies, and it is extremely unlikely that the Biden administration, which has made clean air
and water and environmental justice centerpieces of its agenda,6 will do so. Reduced operating
capacity should not be modeled as a permissible compliance option. The Obama administration’s
EPA required SCRs at all of the four plants noted above, thus, modeling those same SCR costs in
the 2021 IRP is required under prudent decision-making.
Finally, all of PacifiCorp’s model runs should incorporate, as a model input, some level
of carbon pricing in order to account for likely environmental regulatory costs. A carbon price is
critical to fully understanding the breadth of regulatory impacts resulting from PacifiCorp’s
various IRP portfolios and is therefore necessary for sound decision-making. Currently,
PacifiCorp does not embed a carbon price into each of its model runs but rather evaluates four
discrete scenarios: high carbon price, medium carbon price, no carbon price, and the social cost
of carbon. In 2015, Sierra Club presented expert analysis from Synapse Energy Economics, Inc.,
demonstrating that when even a low carbon price is assumed, endogenous coal unit retirements
selected by the modeling software will identify for retirement units that were not identified for
retirement under PacifiCorp’s Regional Haze scenarios.7 Accordingly, incorporating a carbon
price is necessary to fully capture which units may be marginal and eligible for near-term
retirement. To be clear, a carbon price should be included in every scenario, thereby eliminating
6 Exec. Order No. 13990 (Jan 20, 2021); Exec. Order No.14008 (Jan. 27, 2021).
7 In the Matter of PacifiCorp’s 2015 Integrated Resource Plan, Docket No. LC 62, Sierra Club’s Comments on PacifiCorp’s 2015 IRP (Aug. 27, 2015), available at https://edocs.puc.state.or.us/efdocs/HAC/lc62hac134513.pdf.
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the no carbon price scenario.
To the extent that the carbon price utilized is lower than the social cost of carbon,
PacifiCorp’s model runs will not fully incorporate the societal costs of greenhouse gas emissions.
Beyond regulatory costs, the combustion of fossil fuels for electricity generation results in
negative externalities that are not captured strictly by the transaction between electricity
generators and electricity consumers. The pollution from fossil fuel generation creates economic
damages in the form of public health and climate change costs, such as damages to communities
from increased flooding or other natural disasters or the economic impact of decreased crop
yields. As a result, the social cost of carbon should still be utilized as a modeling sensitivity (i.e.,
a model run with the input carbon price equal to the social cost of carbon) in order to quantify
the monetized damages associated with incremental increases in greenhouse gas emissions.
Additionally, societal costs should be included in the reported output of each model run. In other
words, every model run utilizing a carbon price that is equal or lower than the social cost of
carbon should report carbon emissions and calculate the associated emissions costs based on the
social cost of carbon value. Pursuant to Executive Order 13990, the Biden administration’s
Interagency Working Group on the Social Cost of Greenhouse Gases released an interim social
cost of carbon on February 25, 2021,8 which is the most recently updated cost and thus should be
utilized by PacifiCorp in its 2021 IRP modeling.
8 The Interagency Working Group reinstated estimates for the social cost of greenhouse gases as had been established by the Interagency Working Group before being disbanded in 2017, adjusted to 2020 dollars. Values are the average across models and socioeconomic emissions scenarios for three separate discount rates (2.5 percent, 3 percent, and 5 percent), as well as a fourth value, selected as the 95th percentile of estimates based on a 3 percent discount rate. See Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Exec. Order No. 13990, Interagency Working Group on the Social Cost of Greenhouse Gases, United States Government (Feb. 26, 2021), available at https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument SocialCostofCarbonMethaneNitrousOxide.pdf.
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III. Conclusion
A reasonable delay in the 2021 IRP filing may be justified. However, Sierra Club
believes a five month delay is unnecessary and would ultimately harm the public interest.
Accordingly, Sierra Club recommends a short delay that will still provide PacifiCorp with a
reasonable extension to obtain and incorporate the information it states that it needs to complete
its modeling. In light of the anticipated delay, Sierra Club further recommends that the
Commission provide PacifiCorp with specific instructions on its modeling and portfolio
development, including modeling the costs of SCRs at four of the Company’s coal plants and
embedding a carbon price and the social cost of carbon.
Dated: March 5, 2021
Respectfully submitted,
Rose Monahan
Sierra Club 2101 Webster Street, Suite 1300 Oakland, California 94612 Telephone: (415) 977-5704
Email: rose.monahan@sierraclub.org
CERTIFICATE OF SERVICE I hereby certify that on this 5th day of March 2021, I served the foregoing SIERRA
CLUB COMMENTS ON PACIFICORP’S PETITION FOR EXTENSION via electronic mail, in
accordance with IPUC Order No. 34781, upon the following:
Idaho Public Utilities Commission Commission Secretary Idaho Public Utilities Commission P.O. Box 83720 Boise, ID 83720-0074
E-mail: secretary@puc.idaho.gov
Rocky Mountain Power Ted Weston Idaho Regulatory Affairs Manager Rocky Mountain Power 201 South Main Street, Suite 2300
Salt Lake City, UT 84111 E-mail: ted.weston@pacificorp.com Emily Wegener Senior Attorney
Rocky Mountain Power 1407 West North Temple, Suite 320 Salt Lake City, Utah 84111 E-mail: emily.wegener@pacificorp.com
Ana Boyd
Research Analyst, Sierra Club