BOISE, Idaho — State officials have approved an Idaho utility company’s plan to close a coal-fired power plant in Nevada about 10 years ahead of schedule and raise monthly bills for customers to cover depreciation costs.
The Idaho Public Utilities Commission announced Monday a settlement with Idaho Power to close the North Valmy Generating Station near Valmy by 2025.
The company said closing the plant early will save customers money because a decrease in market prices for electricity has made the plant uneconomical except when energy demands surge during extremely hot or cold weather.
“It may not benefit customers from an economic and reliability standpoint to operate beyond 2025,” Idaho Power spokeswoman Stephanie McCurdy said Wednesday.
The average Idaho Power residential customer in southern Idaho will see an increase of about $1.20 per month. The company is seeking a similar agreement for its eastern Oregon customers, McCurdy said.
The increased rates will allow Idaho Power to recover depreciation costs based on the shorter lifespan of the power plant. The company initially asked for a rate increase of 3.1 percent to cover the depreciation costs, but the agreement reduced that to 1.17 percent.
“It’s a pretty complicated case, and it’s definitely a good compromise for the competing interests,” said Matt Evans, spokesman for the Idaho Public Utilities Commission. “Natural gas prices have been so low it has made coal a little less competitive.”
Idaho Power co-owns the plant with Nevada-based NV Energy. The two utilities each own half of the plant, which was built along Interstate 80 east of Battle Mountain in the 1980s. The plant contains two units, with one originally scheduled to close in 2031 and the other in 2035. The settlement announced Monday closes one unit in 2019 and the other in 2025.
NV Energy spokeswoman Jennifer Schuricht said the company had no comment. NV Energy is owned by Warren Buffett’s Berkshire Hathaway Inc.
NV Energy provides electricity to 1.3 million customers in Nevada. Idaho Power serves 535,000 in Idaho and eastern Oregon. McCurdy said Idaho Power won’t have a problem replacing the power generated by the coal plant.
Conservationists have pushed for the expedited closure of the coal-burning plant for years, citing costs and pollution caused by burning coal. They say keeping one unit operating through 2035 would waste tens of millions of ratepayers’ dollars, primarily because coal now costs significantly more than other energy sources.