PacifiCorp Coal Contract Evaluation
In Utah Docket 14-035-147 and Oregon Docket UM 1712, PacifiCorp proposed to close its Deer Creek coal mine, sell Utah mining assets, and engage in a long-term coal supply contract with the proposed buyer of those assets, Bowie Resource Partners. The resulting coal supply agreement (CSA) would require PacifiCorp’s Huntington Power Station to take, or pay for, a substantial amount of coal through 2029. On behalf of Sierra Club, Synapse reviewed PacifiCorp’s analyses to determine whether the transaction is in the best interest of the Company’s customers. Synapse expert witness Jeremy Fisher assessed that the Company had not determined if the power plant was at risk of being non-economic and had overvalued the benefits of the sale and coal supply agreement. Dr. Fisher recommended that the Commissions of these states hold the Company responsible for signing contracts that allow sufficient optionality, and do not require a long-term commitment to a non-economic resource.
In California Docket A. 15-09-007, PacifiCorp filed a request to authorize the sale of the Utah mining assets on a post-hoc basis. Testifying on behalf of Sierra Club, Jeremy Fisher reviewed the relationship between the mining assets, the long-term CSA, and the mine closure, and determined that the sale of the mining assets could not be separated from the other elements of the transaction, as written, and had not been assessed as a separate entity. In addition, Dr. Fisher discussed the contractual risks encumbent on the Company for executing the contract prior to full regulatory approval, and noted that the Company continued to overvalue the benefits of the overall agreement.