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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.

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“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.

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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.

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