PacifiCorp is abandoning plans to convert one of the Naughton Plant’s coal units in Lander, WY, to natural gas. It will now shutter the Kemmerer plant’s Unit 3 at the end of 2017.
The move is a result of declining electricity demand and reflects the costs of installing environmental upgrades to meet federal haze requirements.
“Prices for natural gas and wholesale electricity continue to be at or below where we anticipated,” said David Eskelsen, a spokesman for the utility. “Customer demand, while it grows over time, has been relatively lower. And that’s largely a function of a combination of the echo of the economic downturn and energy efficiency measures.”
The news, delivered as an update to the company’s long-term strategic plan, came on the same day Arch Coal and Peabody Energy said they were laying off 460 employees at mines in the Powder River Basin.
PacifiCorp’s initial plan had been to shutter Unit 3 for five months, starting at the end of 2017, and convert it to natural gas. The estimated cost of the move was $160 million. Natural gas had been a cheaper option for complying with regional haze requirements than upgrading the unit’s coal burning equipment under the Oregon-based utility’s initial calculations.
Naughton’s two remaining coal units are not subject to the same environmental requirements as their counterpart, though their future is also under evaluation, Eskelsen said.