ROCK SPRINGS – PacifiCorp plans to close Jim Bridger Power Plant Unit 1 by the end of 2023, according to a draft action plan released Thursday. Hundreds of scenarios were explored, and under the preferred portfolio, Jim Bridger Unit 2 will close by 2028 and Units 3 and 4 will operate through 2037. The decisions come as the company said it is investing more in “wind and transmission, while adding significant new solar and battery resources.”
On Tuesday, PacifiCorp presented its final modeling results, a draft preferred portfolio and draft action plan. The proposed plan is to retire multiple units, convert the previously closed Naughton Unit 3 in Kemmerer to natural gas, and construct a 400-mile transmission line from the Aeolus substation near Medicine Bow to the Clover substation near Mona, Utah, along with additional transmission upgrades.
"The transition in how we meet our customers' energy needs is under way," said Rick Link, PacifiCorp's vice president of resource planning and acquisitions. "With a focus on lower-cost renewable resources and strategic transmission investments, this plan allows us to continue to deliver the reliable and low-cost energy our customers need as we embark on a phased and well-managed coal transition that minimizes impacts to our thermal operations workforce and communities."
When it comes to Jim Bridger, under the company timeline, it will:
-- Begin the process of retiring Jim Bridger Unit 1 by the end of December 2023, including completion of all required regulatory notices and filings.
-- By the end of Q2 2020: File a request with PacifiCorp transmission to study the year-end 2023 retirement of Jim Bridger Unit 1.
-- By the end of Q2 2021: Confirm transmission system reliability assessment and year-end 2023 retirement economics in 2021 integrated resource plan filing; finalize an employee transition plan; and develop a community action plan in coordination with community leaders.
-- By the end of Q4 2021: Initiate the process with the Wyoming Public Service Commission for approval of a reverse request for proposals for a potential sale of Jim Bridger Unit 1.
-- By the end of Q4 2023: Administer termination, amendment, or close-out of existing permits, contracts, and other agreements.
The Bridger plant has 341 employees, according to Tiffany Erickson of Rocky Mountain Power media relations. RMP is a subsidiary of PacifiCorp.
“We will make every effort to ensure no one who wants a job with us is displaced. We've managed transitions like this in the past, and we have successfully been able to find new opportunities across our company for those seeking positions. All employees in Wyoming also have continuing education benefits through local colleges and training centers,” a company press release stated.
“Our plant teams are some of the best in the industry, and we are reminded that the changes ahead are a result of the changing economics sweeping our industry. That's why our top priority is ensuring our colleagues, their families and communities remain fully apprised of the changes ahead and that we work with them on a transition plan that supports their needs.”
According to the draft action plan, PacifiCorp also plans to retire Naughton Units 1 and 2 and Craig Unit 1 by the end of December 2025. The anticipated retirement date of 2027 for Dave Johnston’s units remains the same under the new preferred portfolio, the Casper Star-Tribune reported.
"Of the 24 coal units currently serving PacifiCorp customers, the draft plan envisions retirement of 16 of the units by 2030 and 20 of the units by the end of the planning period in 2038," a plan summary states.
This means the company intends to retire 66% of its coal fleet by 2030 and 83% by 2038. The closure announcements come as the PacifiCorp plans to rely more on solar and wind power. It predicts that coal unit retirements will exceed 1,457 megawatts (MW) by the end of 2025, 2,874 MW by the end of 2030, and 4,485 MW by the end of 2038.
"Coal generation has been an important resource in our portfolio, allowing us to deliver reliable energy to our customers, and will continue to play an important role as units approach retirement dates," Link said. "At the same time, this plan reflects the ongoing cost pressure on coal as wind generation, solar generation and storage have emerged as low-cost resource options for our customers."
Through the end of 2023, the action plan window, “the preferred portfolio includes 1,821 MW of new solar and 1,989 MW of new wind (not contracted or under construction). Through 2038, the preferred portfolio includes 5,186 MW of new solar and 3,110 MW of new wind (not contracted or under construction).”
This will include 1,920 MW of additional wind generation in Wyoming by 2024 and 1,415 MW of new solar in Wyoming paired with 354 MW of battery storage, phased in between 2024 and 2038.
PacifiCorp noted that the preferred portfolio includes battery storage resources for the first time.
“Through the end of 2023, the preferred portfolio include 595 MW of battery storage capacity — all of this capacity is combined with new solar resources. Through 2038, the preferred portfolio includes 2,821 MW of battery storage capacity — 1,456 MW is combined with new solar,” the document states.
Building new transmission lines is also meant to help the company make a transition.
"By investing in transmission, we can extend the reach and flexibility of the grid so more low-cost energy can be delivered to our customers," Chad Teply, PacifiCorp's senior vice president for business policy and development, said in a press release. "Making the necessary long-term investments to relieve transmission congestion will allow development of additional renewable resources in the near-term and facilitate long-term growth of the region."
He acknowledged the impact the closures will have on Wyoming cities and towns.
“Some of our coal fleets and coal units are located in communities that have literally been built around those coal resources, so as we’ve been engaged with stakeholders, employees and those communities over the past year, we have continued to set forth plans that will help us get to our next major milestones on that transition,” said Chad Teply, vice president of resource development and construction.
“Most of the detail has yet to be worked out with local leadership,” Teply told the Star-Tribune.
-- “While a transition like this is difficult, the business world is continually changing, and that is the case here,” Sweetwater County Commissioner Jeff Smith said. “Bridger has been a part of the community for nearly 50 years, and coal is what built this community, so it is an especially challenging change. With the business, economic, and political climate as it is, coal is on the short end of the stick. I'm sad to see such a big piece of our history change, but I'm realistic that change happens and optimistic that good things are to come.”
When it comes to workers, Smith said with the timeline set out for the closures, it looks as though there won't be mass layoffs, or any layoffs for that matter.
“Things can and will change, but with Units 3 and 4 scheduled to be around until 2037, I think this will be a bigger deal for younger workers. If you're in your 20s and just starting out there, you're probably thinking about what you should do in the future. For those who have five or 10 years of work left, it's probably much less stressful; although change is never easy,” he said.
“We will be losing jobs that are good paying as well as taxes collected from the minerals and power transmission. The latter will likely be made up with transmission from the wind farms to our east. No community our size can lose hundreds of quality jobs without feeling it. I pointed out at the meeting that I heard a lot about what Wyoming will gain in the coming years with billions of dollars being invested in energy production throughout the state, but I heard very little about any gains here in Sweetwater County. It appears that over the next 10 to 15 years Sweetwater County will be a loser in Rocky Mountain Power's plans while other parts of the state will benefit from their structural changes,” the commissioner said.
Smith said this gives us a chance to look to what is next. He added a trial like this certainly gets the attention of a lot of smart and hardworking people in our community, and he has no doubt that the community will find a way to make things better.
-- “It is with some relief to learn that Bridger Unit 2 is slated to remain open until 2028 and Units 3 and 4 until 2037. Closing Unit 1 by the end of 2023 should not result in any employee layoffs. Likewise, the closure of Unit 1 likely will not affect the amount of coal consumed by the Bridger power plant, as the plant has been running at or less than 75% capacity for some time now,” Rep. Clark Stith said. “Long term, however, the outlook for coal is not good. Our local economy is more diversified than may first appear, with the trona mining sector robust and independent of the volatile energy sector. We are far less dependent on coal than our fellow Wyomingites in Gillette.”
He said the likely demise of coal will continue to be a drag on government revenues across the entire state.
“State and local governments combined make about $1.50 from each ton of coal,” Stith said. “Wyoming has already gone from producing a peak of nearly 400 million tons of coal per year to just 304 million tons per year in 2018. That represents a difference of about $150 million per year in lower tax revenue from its peak. Public school K-12 funding is more dependent on mineral revenue than other government sectors, thus causing a structural deficit in K-12 finance.”
He said brainpower is the key to long term-economic growth, so skimping on education is not the solution.
“I am hopeful that Western Wyoming Community College, the K-12 establishment, the Sweetwater Economic Development Coalition and local governments will focus long term on promoting innovation, creating a patent factory right here at home,” Stith said.
-- “It’s too bad it’s occurring,” Commissioner Randy “Doc” Wendling said, who noted this will impact families and businesses, along with the county and the state.
He said hopefully companies will keep their promise to offer programs to help employees who are laid off or who want to train to transition into other jobs.
Wendling said he appreciates the notification.
“It gives us time to plan to mitigate the worst impacts,” he added.
-- Sen. Larry Hicks said having worked on this issue for the last four years, the thing that strikes him most is the amount of disingenuous information, double talk and lack of honesty about what is driving PacifiCorp to pull the plug on Wyoming’s coal-fired fleet.
“PacifiCorp has sold out the workers in Wyoming for their liberal anti-coal clientele in other states, particularly in Oregon and California. As their senate senator, I fully intend to make sure there will be continued job opportunities in the area and PacifiCorp will provide a significant level of mitigation funding for this to happen,” he said.
If we do nothing, Hicks warned there will be severe economic consequences. However, he believes there are things we can do to mitigate much of the economic damage.
-- Green River Mayor Pete Rust said that PacifiCorp’s plan is reevaluated and changed every two years, so reacting to a constantly changing document is problematic.
“Experience for the last few years has shown significantly different scenarios. With that caveat, obviously changes that involve closing down portions of the plant sooner rather than later are not a scenario that is desirable for the workforce and its effect on our workers and our community,” he said.
The mayor observed that recent announcements of expansion within various industries, particularly the trona patch, "may well be happening at an ideal time to minimize the displacement of affected workers."
“The most optimistic scenario would mean that the community principally through WWCC and Wyoming Department of Employment needs to be ready to help retrain the affected workers if and when layoffs occur,” he said.
“As with any significant change in the community and within the lives of individual workers, the more you pay attention to these constant changes/announcements, the more you save; the more you plan, the greater you will be prepared for whatever changes come about. We as a city, and many of our partners are closely watching the multiple scenarios that are seemingly changing and unfolding constantly so that we will be better able to adapt to whatever changes evolve."
-- Sen. Liisa Anselmi-Dalton said, “It is unfortunate that users in Western states like Oregon don’t understand that solar power relies on the sun shining which doesn’t happen at night. Our coal power and has power is very clean and low cost compared to solar and wind. These users make the upgrade for Unit 1 economically unviable.”
She said a lot of our workers are worried about losing their jobs and are fleeing what they see as a sinking ship if they are young or just waiting for retirement.
When asked what this means for the community, Anselmi-Dalton said a lower tax base. She added real estate prices will drop without a new industry to fill the void.
-- Gov. Mark Gordon called the early closures a “blow to the people of Wyoming,” and said he was “personally disappointed” in the decisions made in the resource plan.
“The finalization of their IRP allows us to move into further analysis of the underlying assumptions that led to this announcement,” he said in a statement.
“My focus now is on the workers and the communities that will be affected by this announcement,” he added. “The state will continue to work cooperatively with local and federal partners on efforts to strengthen and diversify the economies of those impacted communities.”
COST SAVINGS PROJECTED
In late April, company executives visiting Rock Springs said a coal analysis indicated that retiring Jim Bridger Units 1 and 2 by 2022 would save customers about $248 million. Since then, Rick Link, PacifiCorp vice president of resource planning and acquisitions, said the company did more research and concluded there would be potential savings for customers if the company phases in the closures.
In September, WyoFile reported that a company analysis estimated PacifiCorp and its 1.9 million utility customers could save up to $599 million by retiring several coal-fired electrical generating units in Wyoming and elsewhere — including early closures at the Jim Bridger and Naughton plants.
“The bottom line is there are significant cost savings (in the coal unit retirements),” Rob Godby, an economist at the University of Wyoming, told the Star-Tribune. “In an IRP the two things they need to focus on is cost to the ratepayers and reliability of the system. So what they determined was these four coal units can be closed with significant savings to the public and make basically no difference to system reliability.”
The development of the portfolios are part of PacifiCorp’s integrated resource plan, which is updated every two years. It is designed to be a support tool and roadmap for meeting the company’s goal of providing reliable, cost-effective energy to its customers while addressing the risks and unknowns in the utilities sector, according to Rocky Mountain Power. PacifiCorp will file its final 2019 IRP with state regulatory commissions by Oct. 18.
Wyoming lawmakers passed a law requiring utility companies to attempt to sell declining coal plants before they retire. Though the Wyoming Public Service Commission has yet to finalize the exact rules under the new law that went into effect earlier this year, the Star-Tribune reported that PacifiCorp intends to comply, placing units on the market roughly two years before a planned retirement, beginning with Jim Bridger Unit 1 in 2023.
ADVICE FOR THE FUTURE
Commissioner Wendling said now is not the time to panic. Instead, he encouraged people to take advantage of the programs offered to them to "reskill and retrain."
“We’re going to half to double down on economic development and get really aggressive on developing plans for economic development,” he said.
When asked what he would say to people who are uncertain about their future, Hicks said, “As their state senator I would say I have your back and so does the Wyoming Legislature. Hold on. We have not lost this battle yet. Let’s see how the next couple years play out. You have the entire state in your corner.”
Anselmi-Dalton said she worries about the workforce.
“(I) would advise them to try to diversify their skills to make them more marketable. I am heartened that the trona industry is expanding,” Sen. Anselmi-Dalton said.
Commissioner Smith advised people to reach out for help.
“RMP is stepping forward with assistance. They aren't closing shop in the near future and are willing to teach skills there that can be used elsewhere, whether it's in trona, oil and gas, or any number of other industries. Don't discount Jim Bridger quite yet. They can still provide a great start to a long career elsewhere,” he said.
“And don't count out the people of Sweetwater County. If you love living here there is a way to make it happen. There have been trying times for all of our 150-year history. While it's not easy, it is definitely worth living in this great community of ours.”