Part 3: Utilities Continue Coal Retreat, Advance on Gas and Renewables

In my previous two blogs, I talked about historic trends and future forecasts of coal power plant retirements in cost-of-service regulated and competitive market areas. I also highlighted some questions and a disconnect with the U.S. DOE’s recent resiliency proposal.

Increasingly, regulated power regimes are moving away from coal and towards gas, renewables, demand-side resources, and other technologies. Here is a run-down of just some cost-of-service-area coal plant retirements announced in 2017, what is being planned to replace coal power, and some insights as to why.

You will notice common themes throughout, but keep in mind long-term plans for the future (called integrated resource plans or IRPs) can always change, and proposed actions must be approved by the applicable state commission.

In April 2017, the Arizona Public Service Co. (a Pinnacle West Subsidiary) filed its 2017 IRP (2017-2032) that envisions 702 MW of coal capacity at Cholla units 1&3 retiring by 2024 and calls for over 4 GW of new gas capacity by 2032, with an emphasis on fast-start, fast-ramping units to accommodate Arizona’s increasingly solar landscape, and the potential to invest in a natural gas storage facility. APS plans on investing in over 979 MW of demand side management by 2032, and adding 397 MW of storage in the same time frame.

Also in April, Tucson Electric Power Co.’s (a Fortis Inc. subsidiary) 2017 IRP plans for retirement of the San Juan coal plant and Navajo Generation Station, while increasing investments in natural gas, renewables, storage and smart grid technologies.

“As our community grows and changes, Tucson Electric Power (TEP) must evolve to continue satisfying the energy needs of our customers with a more flexible and responsive resource portfolio. Our 2017 Integrated Resource Plan (IRP) reflects our ongoing transformation from a traditional utility to a more technology and consumer‐focused provider of energy products and services…”

In April, PacifiCorp’s (a Berkshire Hathaway subsidiary consisting of Pacific Power and Rocky Mountain Power) 2017 IRP plans to retire 3,650 MW of exiting coal capacity by 2037, while planning to increase investments in wind (2 GW new, 0.9 GW repowered), 1 GW solar, 1 GW natural gas, 2 GW energy efficiency and 365 MW of direct load control.

“In the 2017 IRP, PacifiCorp presents a cost-conscious plan to transition to a cleaner energy future with near-term investments in both existing and new renewable resources, new transmission infrastructure, and energy efficiency programs.”

In May, Virginia Electric and Power (a Dominion subsidiary) filed its 2017 IRP (planning for 2018 – 2045) that identifies a wide range of potential resource scenarios. Although the 2-year short term action plan did not recommend coal retirements, the study found retirement of three coal-fired units in 2022 would benefit consumers under a variety of assumptions.

In July, Idaho Power Co.’s (a IDACORP Inc. subsidiary) 2017 IRP (planning for 2017 – 2036) plan was filed stating the company would retire five coal units at three plants over the next fifteen years, representing 730 MW of capacity.  This means Idaho Power is planning to completely phase-out coal resources.  

In July, Public Service Co. of New Mexico (a PNM Resources Inc. subsidiary) filed its 2017 IRP (planning for 2017 – 2036) with its state commission proposing to eliminate the company’s use of coal-fired generation by the end of 2031. The IRP states (p.2),

“The retirement will provide the opportunity to move from the fixed costs and baseload operation associated with coal plants to resources that better match varying loads and are better equipped to work with renewable energy.” Instead, the company will be looking towards investing in solar, natural gas, and storage.

In September, Duke Energy Carolinas filed separate 2017 IRPs for South and North Carolina (which analyzes Duke’s combined Carolinas system).  The IRP noted that as of April 2015, the company had retired 1.7 GW of older, un-scrubbed coal capacity, and plans for another 1.7 GW of coal retirements in the future (2024-2028) at its 5-unit Allen plant. Duke’s Energy Corp’s company-wide sustainability report maintains that by 2030, it will reduce coal use from 34% down to 27%, increase natural gas use by 30%, and double power from renewables.

Also in September, Puget Sound Energy filed its 2017 IRP in Washington State, showing that Colstrip – a coal-fired power plant co-owned by several utilities, but primarily Puget Sound Energy – units 1&2 are slated to retire in 2022, with the fate of the remaining two Colstrip units being unknown. Though a subsequent settlement agreement has Puget agreeing to close units 3&4 by 2027.

In October, Empire District Electric Co. of Missouri announced plans to invest heavily in wind, and retire its 200 MW coal-fired Asbury Power Plant in April 2019, a decade ahead of schedule.

In November, Kentucky Utilities and Louisville Gas and Electric (both PPL Subsidiaries) announced it would be retiring two of the company’s oldest coal units at the E.W. Brown Generating Station in early 2019.

Also in November, We Energies (a WEC Energy Group subsidiary) of Wisconsin announced plans to shut down its 1,190 MW Pleasant Prairie coal plant in 2018, while also saying it plans to invest in building 350 MW of solar by 2020.

Again, these are just some of the announcements in 2017, there are many more. The common themes are clear, less coal, more gas, renewables, storage, and demand-side resources. Regulated utilities seem to be prioritizing cleaner, more operationally flexible resources.

Christina Simeone

Kleinman Center Senior Fellow

Christina Simeone is a senior fellow at the Kleinman Center for Energy Policy and a doctoral student in advanced energy systems at the Colorado School of Mines and the National Renewable Energy Laboratory, a joint program.