“Demonstrably Deficient” PacifiCorp to Pay Oregon Ratepayers $17 Million

PacifiCorp’s largest-capacity coal plant, the Jim Bridger Plant near Rock Springs, Wyo. (Photo by Tim Kupsick / Casper Star-Tribune)

FOR IMMEDIATE RELEASE:

Oregon Public Utilities Commission rules PacifiCorp subsidiary Pacific Power must compensate ratepayers for failing to consider less costly alternatives before installing $660 million in retrofits at aging coal plants in Wyoming, Utah

SALEM, OR — Today, in an unprecedented decision, the Oregon Public Utilities Commission ruled that Pacific Power, a subsidiary of PacifiCorp, must repay $17 million to Oregon ratepayers as a penalty for spending $660 million on pollution controls for several aging coal-fired electricity plants located in Wyoming and Utah without first considering viable alternatives. The unusual finding of imprudence supports the Sierra Club’s argument that the company had less costly alternatives to the coal plant retrofits that it could have pursued instead. Others disputing Pacific Power’s rate request were Citizens Utility Board (CUB), Renewable Northwest Project, and Northwest Energy Coalition.

“While this penalty will help offset some of the enormous financial burden of these expensive retrofits, I am appalled that Pacific Power was so reckless in spending our ratepayer dollars,” said Brian Pasko, Oregon Chapter Director for the Sierra Club. “Pacific Power’s irresponsible actions will force Oregon families to pay even more money for increasingly expensive coal-fired power and continue to expose thousands of families to the threat of toxic coal pollution.”

The commission’s disposition statement labeled Pacific Power’s request and justification for ratepayer compensation as “flawed” and “demonstrably deficient,” and said that the utility “failed to act prudently” by improperly claiming that investing ratepayer money in aging coal plants was the only course of action. The commission noted that “even in response to changing circumstances, Pacific Power did not alter its course of action or consider alternatives of any kind,” and also “failed to perform appropriate analyses to determine the cost-effectiveness” of the company’s expenditures on the coal units.

“Pacific Power relentlessly pursued a risky path of spending over $600 million on aging, polluting coal plants that send electricity to Oregon, and Pacific Power shareholders are going to have to foot the bill for their reckless actions. Today’s decision by the Public Utilities Commission that the company acted imprudently is both costly to its shareholders and an embarrassment for the company,” said Bill Corcoran, Western Regional Campaign Director for the Sierra’s Club Beyond Coal Campaign. “Had PacifiCorp and Pacific Power taken the necessary steps to conduct a thorough and transparent analysis before spending hundreds of millions of dollars on costly upgrades, it would likely have found that retiring some of its risky coal plants and replacing them with cleaner energy would have made better financial sense for ratepayers. We expect utilities and commissions across the country will take note of today’s decision.”

In March, Pacific Power submitted a request to recover Oregon’s $170 million share of the company’s $660 million expenditure at units of the Naughton, Dave Johnston, Wyodak, and Jim Bridger plants in Wyoming and the Hunter plant in Utah. The decision to disallow $17 million of rate recovery from Oregon ratepayers is the final decision from the commission.

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