After closing coal plants, Idaho Power is the rare utility cutting rates

Something unusual is happening in Oregon: A utility is requesting to cut electricity rates. 

In an October 9 filing, Idaho Power Company asked Oregon state regulators to slash electricity prices by nearly 1% for ratepayers across the board. 

The company told the Oregon Public Utility Commission that the closure of the second unit at the North Valmy Generating Station, a 522-megawatt coal plant in northern Nevada, had removed costs from its balance sheet. (While the utility primarily serves customers in Idaho, Washington, and Oregon, it was a co-owner of the Nevada plant with NV Energy and operates within the Western Power pool grid system.)

At the same time, Idaho Power said the demolition of a second, already-closed coal plant roughly two hours east of Portland had eliminated regulatory liability costs. 

Combined with a recent increase in rates to recover the cost of upgrades to protect against wildfires, the utility said it needed $588,295 less in net revenue. That equated to “an overall decrease of 0.90%” in necessary rates. 

Idaho Power isn’t dropping rates everywhere. Last month, the company petitioned regulators in its home state to hike rates by more than $250 per year to help offset the costs of expanding infrastructure to service the fast-growing metropolis of Boise. But if the lessons in Oregon highlight anything, it’s that less coal likely means lower rates. 

The move — which comes as most other U.S. utilities request record rate increases in the face of load growth that requires new infrastructure — flies in the face of the Trump administration’s push to keep the nation’s shrinking fleet of coal-fired power stations running.

Trump and coal

In May, the Department of Energy ordered the J.H. Campbell coal plant in Michigan to remain open past its imminent shutdown deadline, on the grounds that the station was critical to keeping the lights on and surging prices down. But in August the plant’s operator, Consumers Energy, reported spending $29 million to keep the facility open for just five extra weeks; over the full year, that cost would balloon to $279 million. 

If the administration expanded the scope of the order to cover all similar plants set to retire in the next three years, the additional cost to ratepayers could exceed $3 billion per year, according to a recent report by the consultancy Grid Strategies. 

But the Trump administration has remained committed to its project of reviving coal, despite all the evidence that it will worsen already-high electricity bills.

Earlier this month, the Energy Department unveiled plans to allocate $625 million — the vast majority of which was taken from awards previously given out by the gutted Office of Clean Energy Demonstrations — to modernizing existing coal plants and funding coal projects in rural areas. 

The backdrop to this effort has been a 73-page DOE study produced earlier this year that laid out dramatic scenarios in which the U.S. would suffer  major outages due to the closures of coal plants. But experts — including supporters of the administration’s agenda — told Latitude Media that the so-called reliability analysis relied on dubious assumptions, including a hyperfocus on generation with little attention to distribution.