Despite a new commitment to double its renewable power generation by 2021, NV Energy is requesting that state energy regulators allow it to continue operating the state’s only remaining coal-fired plant until 2025.
In a “Life Span Analysis Process” filing submitted to the state’s Public Utilities Commission on Feb. 16, NV Energy recommended that the two coal-burning Valmy generation plants in rural Humboldt County keep to their scheduled 2025 retirement dates, despite vocal opposition from pro-renewable groups.
The two plants were opened in the 1980s and combined can produce 522 megawatts at peak generating capacity (enough to power approximately 315,000 homes). According to the filing, the utility changed its “operating philosophy” on the two plants in 2016, and will now only operate them at “modest capacity” for summer months — when electric demand is at its highest — and typically not operate them during colder months of the year.
Still, NV Energy recommended keeping both units open through 2025, noting that while the utility could see a “very small” benefit from retiring the older plant by 2019 and replacing it with new large-scale photovoltaic generation, following that path would open the utility to the highest risk of “exposure to market price fluctuations and potential for energy shortages.”
“The advantage to keeping Valmy operational is the surety of the resource,” the company wrote in the filing. “It is an existing resource with a long operating history and a fuel supply on site. Other energy and capacity resources are modeled as less expensive but without the certainty of a constructed facility — or at least an executed contract — it is only an estimate of the actual cost.”
The utility estimated that successfully replacing the oldest unit with large-scale solar was its cheapest option, with the utility spending an average of $3.4 million more in increased cost per year against the “basic” option, which is to keep both plants open until 2025.
NV Energy spokeswoman Jennifer Schuricht said that the utility had reduced its carbon emissions from coal by more than 85 percent between 2005 and 2015, and that a final decision on retirement dates for the plant will come during the utility’s Integrated Resource Plan —the three year process where the utility submits an electric supply and demand plan that is assessed and approved by the PUC.
“The compliance filing made last week was the first step in a structured and detailed process that will be taken to evaluate various retirement options for the North Valmy Generating Station and the impacts an early retirement would have on northern Nevada’s electric system,” she said. “A more holistic resource planning approach, examining all options, including geothermal and solar opportunities, will be taken in June, as NV Energy makes its required resource plan filing to ensure the plant’s retirement is structured in an economically and environmentally sustainable way for our customers.”
In a statement, the Sierra Club’s Nevada representative, Elspeth DiMarzio, said that analysts for the group determined the utility could save millions by retiring the plant early, and said NV Energy should move more quickly towards clean energy generation.
“This should be an easy decision,” she said. “It is hard to take NV Energy's rhetoric about clean energy seriously when they remain committed to an expensive old coal plant that continues polluting our beautiful state.”
Although the plant has a large peak generating capacity (522 megawatts), its actual output in terms of capacity used per year has dropped significantly since the plant transitioned from year-round service to summer capacity. The plants went from 60.62 percent capacity factor use in 2014 (how much of the capacity is used through the year) to 21.29 percent in 2016 and 14.36 percent in 2017.
Idaho Power, which jointly owns the two generating facilities with NV Energy, announced last year that it would seek an expedited retirement for the two generating plants, including a 2019 retirement for one of the units and a 2025 retirement for the other unit. In its filing, NV Energy said it is currently engaged in a “confidential” negotiation that would allow one party to stop operating one of the units independent of the other party.
NV Energy announced last week that it had received more than 100 bids as part of its plan to add 330 megawatts of new renewable energy to its portfolio by 2023. The utility closed the final unit at the coal-burning Reid Gardner Generating Station in 2017.