The NW Energy Coalition
Energy Matters Update Vol. 4, No. 8 - December 6, 2007

PacifiCorp drops coal plant plans!
Western clean-energy advocates score major victory

PacifiCorp, the Northwest's largest utility, has abandoned plans to build two new pulverized
coal plants. The company's decision, delivered to both the Oregon and Utah utility
commissions, is the product of years of efforts by NW Energy Coalition staff, member
organizations and other allies.

Advocates and customers should applaud PacifiCorp's turnaround. It can be extremely
difficult for a large utility to change direction, especially when it's owned by Warren
Buffett's coal-heavy Mid-American Corp. The decision took some courage and illustrates the
company's openness to the evidence presented by its customers, regulators and advocates.

Background

In its 2004 and 2007 long-term plans for securing adequate power resources (called
integrated resource plans or IRPs) and its 2006-7 requests for bids to provide power,
PacifiCorp called for construction of up to seven new pulverized coal plants. As reported in
previous issues of The Transformer (Oct. 29, 2007, and Nov. 19, 2007), the six-state
utility's coal plans were stopped short in Oregon, where the spirited opposition from
consumer and clean-energy advocates was strongly supported by the Oregon Public Utility
Commission (OPUC) and its staff. The OPUC is the state agency that reviews long-term plans
and rate requests from investor-owned utilities in Oregon.

Repeatedly rejected by Oregon regulators, the utility evidently did some serious rethinking.
In a letter to the Utah Public Service Commission (PDF file) and in a filing before the
Oregon PUC (PDF file), the company this week announced that conventional coal plants "are no
longer viable options …."

PacifiCorp cites several reasons for its decision, including:
1. Potential federal regulation of carbon emissions. The company expects Congress to
"enact some restriction upon carbon emissions," but can't predict the cost of
complying with as-yet unknown regulations. That means development of a proposed
Wyoming coal plant (Bridger 5), "is no longer a viable option for 2014."
2. Public and regulatory commissions' climate-change concerns. PacifiCorp notes that the
National Association of Regulatory Utility Commissioners recently passed its first
resolution acknowledging the inevitability of climate-change legislation. "Within the
last few months," the company writes, "most of the planned coal plants in the United
States have been cancelled, denied permits, or been involved in protracted
litigation." That means that in addition to the proposed Wyoming coal plant (and its
alternative incarnation as a coal-gasification plant), PacifiCorp will cease to pursue
another planned coal plant in Utah.

PacifiCorp isn't excluding new coal plants from its 20-year considerations. But for its
near-term (10-year) planning, the company says it cannot determine "whether new coal
generation ownership will satisfy the least cost, least risk standards that would enable us
to consider it as a viable option" (Utah Docket No. 05-035-47, Notice of Withdrawal, p. 3].

In other words, PacifiCorp acknowledged just what we've been saying all along: Looming
regulation of carbon to address global warming makes coal a very risky investment for
utilities and especially their customers who would bear the steeply increased costs and
environmental impacts.

What now?

PacifiCorp agreed to modify its 2007 long-term resource plan for Oregon along the lines
proposed by the Coalition and other clean-energy advocates, which included removing the coal
plants and acquiring more conservation.

In addition, in future resource planning, the company agreed to:
Better analyze how conservation will reduce risks and costs
Consider building coal-gasification (IGCC) plants that capture their carbon emissions
Evaluate shorter-term resource purchases to keep its options open
Consider the impact of forced early retirements of existing coal plants, or the need
to retrofit them to capture CO2
Design a plan that meets Oregon's new CO2 emissions goals
Include the estimated future costs of carbon emissions when figuring the price of its
market transactions

PacifiCorp's decision represents a monumental shift in American energy priorities.
Throughout the United States, regulators, legislatures, consumers and advocates are
repelling coal plants and winning new investments in clean energy.

Credit for this great victory goes to all our partners and allies in Oregon -- Citizens'
Utility Board, Ecumenical Ministries of Oregon, Renewable Northwest Project, Oregon
Department of Energy, OPUC commissioners and staff – and our allies in Utah, including
Western Resource Advocates.

The NW Energy Coalition is an alliance of more than 100 environmental, civic and human
service organizations, progressive utilities and businesses in Oregon, Washington, Idaho,
Montana, Alaska and British Columbia. We promote development of renewable energy and energy
conservation, consumer protection, low-income energy assistance, and fish and wildlife
restoration on the Columbia and Snake rivers.

www.nwenergy.org

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