Opportunity to Choose Clean Power & Address Climate Change
In the very near term, Utah needs to make important decisions about its energy future and the economic and environmental costs and risks associated with the sources of electricity it uses to meet the needs of its growing population. These decisions are even more relevant as Utah and the rest of the nation address the economic crisis caused by the coronavirus pandemic.
As Utah leaders contemplate economic recovery, regulators and policymakers would be wise to make forward-thinking decisions that lead to cleaner air and a healthier future, by ensuring the state embraces renewable and other clean energy opportunities. Transitioning to clean energy now would help provide market certainty that is needed for resource development and technology innovation. The state should also pursue measures to allow all Utahns access to low and zero-emission vehicles and needed statewide charging networks, as well as energy efficient homes that use carbon-free electricity and save customers money.
The Utah Roadmap report by the University of Utah’s Kem C. Gardner Policy Institute, released in 2020 at the request of the Utah Legislature, outlines important targets that policy makers should consider. The report identifies seven “milepost” opportunities to reduce local and global air pollutants. It calls for reducing criteria pollutant air emissions 50% below 2017 levels by 2050 and reducing statewide carbon-dioxide emissions 50% by 2030.
The latter target is in line with what scientists worldwide say is needed to avoid the worst effects of climate change. A 2020 letter signed by representatives of nearly 1,700 companies and groups across the nation, including 400 in Utah, urged passage of a legislative resolution endorsing the Utah Roadmap’s recommendations. Although the legislative session ended without consideration of that resolution, the Legislature will evaluate the report during the 2021 session, an important step to help inform policy and law making.
Clean and renewable energy and storage resources are often outcompeting coal and gas as the least expensive forms of electricity generation. At the same time, PacifiCorp and the six states it serves are in the process of determining the future of the utility’s coal fleet. Utah is PacifiCorp’s largest service territory.
This is a moment of opportunity for Utahns to transition to a clean energy future, which is the future Utahns want. A recent statewide poll found that a strong majority of likely Utah voters — 59% to 18%— believe that a transition away from coal-fired power to renewable energy use in Utah is important for improving life for their families and for future generations.
The Multi-State Agreement
PacifiCorp is moving forward with ambitious plans it announced in 2019 to add new renewable energy generation sources and continue participation in the Western Energy Imbalance Market to optimize use of low-cost renewable resources. In its 2019 Integrated Resource Plan, PacifiCorp said it will retire two-thirds of its coal fleet by 2030 and 83 percent by 2038. The utility aims to add 6,500 megawatts of renewable solar and wind energy, along with new battery storage and a transmission line to facilitate the delivery of those renewable resources.
Meanwhile, in December 2019, stakeholders in Utah and the five other states that PacifiCorp serves signed a multi-state agreement to resolve some of the issues associated with how the utility’s coal plant costs will be allocated in the years ahead. The agreement was needed because coal-fired power generation will be removed from rates in Oregon, Washington, and California, due to recent laws passed in those states.
Now, PacifiCorp and the utility regulatory commissions in Utah, Idaho, and Wyoming will need to make important decisions about whether they want to adopt the ongoing costs, generation, and emissions from the coal resources being left by Oregon, California, and Washington. Utah accounts for the largest share of PacifiCorp’s load, at 43%.
Because of the Multi-State Plan agreement signed in December:
Oregon, Washington, and California have a path for exiting the coal power they have been paying for – roughly 35% of PacifiCorp’s coal assets. Those three states will pay off their share of remaining plant investment costs by 2030 at the latest.
Utah, Idaho, and Wyoming will need to decide whether to assume the extra costs for the coal plants left behind by the other states. Those costs include capital investments such as replacing obsolete parts and adding environmental upgrades, operating and maintenance expenses, fuel costs, and decommissioning and site remediation costs.
Utah will also have to consider the economic and environmental costs and risks associated with greenhouse gas emissions from coal-fired power, and its contribution to our climate crisis. Carbon prices or taxes also may come into play in the years ahead.
In 2020, the regulatory commissions in Idaho, Utah, and Wyoming approved the Multi-State Plan agreement. As for the other states in PacifiCorp’s system, the Oregon commission approved the agreement in January 2020, Washington is considering it as part of a current rate case, and California will evaluate the agreement in an upcoming rate case.
The Utah Public Service Commission issued its order to approve the agreement on April 15, 2020, and the commission will be making the first decisions about whether Utah should acquire the PacifiCorp coal generation and costs that other states have rejected in 2022.
Utah’s Energy Future
Utah now has an opportunity to make important decisions about its energy future. Will Utah take on the costs and risks of additional coal-fired power at a time when fossil fuels have become and are expected to continue to be the least cost-effective sources of electricity generation? And in doing so, will the state perpetuate the greenhouse gas pollution those coal plants create? Or will Utah embrace the economic opportunities and environmental benefits of clean energy? We believe regulators and policy makers should take a long view and make a smart investment in clean energy, for the state’s health, economic development, and future prosperity.