PacifiCorp, Dba Pacific Power & Light Company, Request for Approval of draft RFP Denied, Public Utillity Commission of Oregon, UM 1208 (16 January 2007)
Pacificorp, a large utility company, sought permission to build two coal-fired electricity facilities to meet a projected increase in demand of 1,109 MW. The Oregon Public Utilities Commission (PUC) denied the request, finding that Pacificorp overestimated its resource needs and that the company failed to establish that constructing new electricity generating plants would best meet increased demand. The PUC stated, “delaying capital investment in base load resources [new facilities] may have significant option value and that adding capacity in small increments provides flexibility to respond to significant uncertainties related to technology change and regulation of carbon dioxide (CO2) emission. ” Order 07-018, p. 5. The PUC recommended that the utility company pursue electricity conservation, acquisition of renewable energy sources, and wholesale electricity purchases to meet future demand.
The PUC also observed that Pacificorp’s plans to sell surplus electricity to other states, such as California, “carr[ies] significant risk” because many states are considering reducing or even eliminating purchases of power from facilities that do not sequester CO2 emissions. Order 07-018, p. 7.
Finally, the PUC specifically addressed CO2 risk but did not issue any definitive findings. Citizen groups criticized Pacificorp’s estimate of CO2 regulatory costs ($8/ton) as unrealistically low. The PUC cautioned that in future proceedings it would more closely scrutinize projected regulatory costs.