CPUC Allows PacifiCorp to Delay Coal Retirement Plan, Eases Economics of Clean Microgrids

By Published On: July 19, 2021

The California Public Utilities Commission voted without discussion to extend by several months the date by which PacifiCorp must file its plan detailing the retirement of coal plants serving 45,000 California ratepayers. PacifiCorp is a subsidiary of Warren Buffett’s Berkshire Hathaway.

At the same July 15 meeting, the CPUC approved waiving a utility standby capacity charge on clean microgrids, lowering their costs.

PacifiCorp sends power to 1.9 million customers in six western states, and owns nine coal plants in Arizona, Colorado, Montana, and Wyoming. The coal-fired plants are now slated to close between 2023 and 2037. Three percent of the power PacifiCorp sends to California is from coal. The mix in its California portfolio also includes 35% natural gas, 22% solar and wind, 11% hydropower, 9% nuclear and 5% geothermal.

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Source: PacifiCorp August 2020 IRP

“PacifiCorp will address end of life dates for coal resources as part of our next general rate case that will be filed in the first half of 2022,” Tom Gauntt, PacifiCorp spokesperson, said. He added that the closure schedule also will be included it is 2021 Integrated Resource Plan to be released Sept. 1. The IRP is the blueprint for its resource portfolio decisions, including “whether and when to retire coal,” according to Gauntt. 

He added that California represents less than 2% of the utility’s total load for its six-state system. 

Clean microgrids exempted from IOU standby charges

The CPUC also approved waiving for five years a standby charge on clean microgrids and those fueled by renewable gas.

“I am hopeful because the CPUC is finally starting to recognize the value of what renewable microgrids can offer to the grid,” Ben Schwartz, Clean Coalition policy manager, said.

This  standby charge is a monthly per-kilowatt fee that utilities levy on microgrid owners for reserve capacity that may have to be provided at the last minute in the event the backup system fails to perform. It is the largest part of the utility demand charges paid by microgrid owners—individual and community. It’s about 2 cents per kWh, which can make or break project viability, according to Microgrid Knowledge.

The standby charge is premised on the costs utilities incur, including procurement, resource adequacy, and distribution capacity, to quickly step in to fill any supply void of a non- or under-performing microgrid.

The standby charge waiver applies to clean microgrids that keep within California Air Resources Board emission limits. At the time of applying for the exemption, the system must be renewable or run on biogas, renewable gas, or green hydrogen. To qualify, the systems also must be able to supply at least 85% of the microgrid nameplate capacity.

Microgrid owners seeking the waiver must apply twice a year, rather than four times a year as originally proposed.

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