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Rocky Mountain Power's Energy Plan Released

Rocky Mountain Power's Energy Plan Released
27 October 2019

Change is on the horizon for Rocky Mountain Power customers. On Friday, October 18, Rocky Mountain Power released its 2019 Integrated Resource Plan (IRP), which lays out what combination of energy resources it will use to power the lives of its customers over the next 20 years. The IRP is a mix of good news with exciting progress, coupled with some bad news and outright backward steps.

The good news is that renewable energy resources are the most cost-effective energy choice moving forward. This undeniable fact is what has Rocky Mountain Power accelerating the retirement of several coal units after finding that a significant portion of its coal plants are more expensive to run than replacement resources such as wind and solar power.

The bad news is that Rocky Mountain Power continues to ramp down its use of energy efficiency, one of our most cost-effective and readily available energy options. With Utah’s energy demand growing, we need to increase our use of energy efficiency as a resource, not cut back!

Low Costs Are Powering New Renewable Energy

The prices of renewable energy resources have fallen so low that utilities around the country are consistently adopting IRPs with large amounts of renewable energy. Rocky Mountain Power's IRP now joins this growing trend by calling for a significant number of renewable energy resources over the next 20 years:

  • By the end of 2023, Rocky Mountain Power plans to build over 7,000 MW of solar, wind, and battery storage resources.
  • By the end of 2038, the IRP calls for over 11,000 MW of solar, wind, and battery storage resources.

This is the most renewable energy that Rocky Mountain Power has ever suggested building. The inclusion of so many clean energy resources in the IRP provides a clear signal that clean energies such as solar, wind and storage are simply the most economical way to reliably supply customers with energy. (see the graphic below from the IRP, p. 256)


Photo of IRP Resource Mix

Are There Missing Coal Plant Retirements?

Rocky Mountain Power’s 2019 IRP also announced that the utility plans to retire several existing coal units early. This decision is the result of an economic analysis comparing the cost of Rocky Mountain Power’s coal fleet with the cost of replacing coal units with alternative resources. The results identified four of Rocky Mountain Power’s coal units for early retirement. Two coal units in Kemmerer Wyoming will be closed in 2025 instead of 2029 (Naughton Units 1, 2), and two more units in south-central Wyoming will be closed before their current closure date of 2037, one in 2023 and the other in 2028.

Accelerated coal plant retirements are especially important because we need to decarbonize our energy grid much faster in order to mitigate the harmful consequences of climate change. While the accelerated coal retirements are a positive step in that direction, it does not go nearly far enough.

Utah Clean Energy has some lingering questions about whether additional accelerated coal retirements would have been economically beneficial for customers. We simply don’t know because Rocky Mountain Power did not fully study its entire coal fleet in this analysis. For example, the Hunter and Huntington coal units in Utah were not included in the full economic analysis.

This begs the question, what is the financial gap between the coal units not fully studied in this analysis and alternative clean energy resources? The cost of renewables and storage technology will likely continue declining, while the costs and risks associated with coal will continue rising. Because of this, Rocky Mountain Power needs to continue analyzing its entire coal fleet moving forward to ensure the fastest decarbonization possible while also saving its customers money.

Energy Efficiency is Drastically Undervalued

There is, unfortunately, no silver lining to the energy efficiency side of Rocky Mountain Power’s IRP.  Energy efficiency programs are a key part of keeping energy costs low while meeting Utah’s ever-changing electricity needs. In addition to population growth, the adoption of electric vehicles and efficient electric heating systems like heat pumps increase our electricity demand, making energy efficiency even more vital.

The amount of energy efficiency selected in the 2019 IRP isn’t good news.

Digging into the numbers provides some perspective. The 2019 IRP selects a concerningly low level of energy efficiency, and worse shows a continuing decline in energy efficiency over the coming years. As a point of comparison, between 2015 and 2018, Rocky Mountain Power customers saved nearly 330 GWh of electricity per year on average through the successful Wattsmart program. However, the 2019 IRP selects just 260 GWh each year over the next 20 years – a 21% reduction below the average amount of electricity savings previously achieved. (See the chart).Chart UT energy efficeincy selected in 2019 IRP

Ratepayer-funded energy efficiency programs continue to be one of the most affordable energy resources. In 2018, Rocky Mountain Power’s energy efficiency programs cost 2.3 cents per kilowatt-hour saved for businesses and 3 cents per kilowatt-hour saved for residential customers. Compare that to coal-fired power plants on Rocky Mountain Power’s system that can cost up to 5 cents per kilowatt-hour!

Given the cost-competitiveness of energy efficiency, we continue to have concerns that the IRP is artificially limiting the amount of energy efficiency selected in the IRP.

SUMMARY

The release of the 2019 IRP is the culmination of two-years of expert intervention from Utah Clean Energy and fellow advocates that have been shining a spotlight on the cost-effectiveness of renewable energy and energy efficiency. The economics found in the IRP clearly show that renewable energy is the future. But, climate change requires us to decarbonize our energy sector at a faster rate than is outlined in this IRP. We need to increase our investment in energy efficiency resources, not decrease it! While the amount of renewable energy in the current IRP is a positive step in the right direction, it is nowhere near the amount of clean energy we will need in order to address climate change.

Luckily, the IRP is an ever-evolving document that will be updated in 2020. Utah Clean Energy will remain front-and-center in this issue, advocating for the necessary changes to end our dependence on polluting energy.