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PacifiCorp weighs hiring CCS company with ties to its CEO

By Jason Plautz, Carlos Anchondo | 06/10/2024 06:42 AM EDT

Cindy Crane, who has helmed the utility since September, is still the executive board chair at carbon capture startup Enchant Energy.

Cindy Crane and the Jim Bridger power plant

Cindy Crane. U.S. Energy Association (Crane); WildEarth Guardians/Flickr (power plant)

One of the country’s largest utilities is considering awarding a contract to a carbon capture startup once helmed by its CEO.

Cindy Crane left Enchant Energy last fall after three years as its CEO. She now heads PacifiCorp, which is mulling a bid by Crane’s former company to install carbon capture technology on one of its coal plants.

The arrangement has raised conflict-of-interest concerns — especially since Crane is still the executive board chair at Enchant Energy, a New Mexico-based carbon capture and sequestration developer. That could present an “opportunity for self-dealing,” said Dave Pomerantz, executive director of the Energy and Policy Institute.

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“This is a huge red flag for ratepayers,” said Pomerantz, whose group probes the influence of utilities.

Even if Crane doesn’t stand to profit from an Enchant deal, he added, her years of work to launch carbon capture could color her approach to ʲھǰ’s resource mix. The utility has changed course on its long-term energy plan over the past year, announcing in April that it would extend the life of some of its coal plants.

“She is a person whose responsibilities at PacifiCorp are to the ratepayers and the shareholders,” Pomerantz said. “It’s fair to believe she is a believer in carbon capture, so is she someone who is able to look at this in a clear-eyed way?”

Enchant is the lead company on the only bid to install carbon capture at ʲھǰ’s Jim Bridger coal power plant in western Wyoming, according to a PacifiCorp filing with the Wyoming Public Service Commission. That proposal was submitted when Crane was still CEO at Enchant — and its fate may be decided when she’s CEO at PacifiCorp.

It comes as PacifiCorp also explores carbon capture on two other coal plants in Wyoming. The utility’s plans are part of a larger national slowdown in coal plant shutdowns — one that has . Environmentalists say utilities should instead pursue lower-cost renewable energy production and point out that carbon capture for coal is a largely unproven technology.

In a statement, Enchant CEO James Wolff said there was “no overlap” between Crane serving as Enchant’s leader and her new position at PacifiCorp.

Crane gave “ample notice” to the Enchant board prior to joining PacifiCorp in September, Wolff added, and she has “informed Enchant Energy that she recused herself from any decisions related to business activities” between Enchant and PacifiCorp.

Likewise, PacifiCorp spokesperson David Eskelsen said in an email that PacifiCorp has taken actions “to put controls in place to guard against potential conflicts of interest, including delegation of authority and responsibility related to the project to other executives within the organization.”

PacifiCorp declined to make Crane available for an interview.

The Biden administration has included carbon capture and storage (CCS) as a key part of its strategy to tackle climate change — particularly for emissions from power generation. Across the United States, however, there are only 16 commercial-scale CCS facilities in operation, with just one facility attached to a coal-fired unit at a Texas plant, , a pro-CCS think tank.

Enchant targets decades-old coal plants for carbon capture retrofits, even as experts say younger plants make better candidates. The company to build the world’s largest carbon capture project on New Mexico’s San Juan Generating Station when Crane was CEO, and it is a similar retrofit on the Four Corners plant on the Navajo Nation.

Under Crane’s leadership, PacifiCorp has said it plans to delay coal plant retirements.

In April, the utility — which serves 2.1 million customers across six Western states — released an updated long-range electricity plan that would keep coal plants operating longer and identified carbon capture as a way to keep Jim Bridger running. That same month, PacifiCorp’s Rocky Mountain Power with climate technology company 8 Rivers Capital and South Korean conglomerate SK Group to explore carbon capture on two other coal plants in Wyoming.

Those announcements come as the company faces $8 billion in lawsuits for its alleged role in sparking wildfires in Oregon and California. Last year, an Oregon jury found the utility liable for the state’s 2020 fires and said it must pay for damage to property as well as emotional distress.

That has put the company in a risky financial situation — and may make it unwilling to spend money on new sources of generation, said Rose Monahan, an associate attorney with the Sierra Club Environmental Law Program.

“Then you have Cindy Crane, who has a long history with the coal industry, leading the response,” Monahan said. “Her response is that they should double down on coal.

“That’s why her leadership is particularly wrong for this time,” Monahan added.

A history with coal

When Crane moved to PacifiCorp in 2023, she was returning to a company with which she has long-standing ties.

She first joined PacifiCorp in 1990, working her way up to vice president of Interwest Mining and Fuels, where she oversaw mining and coal supply. In 2014, she was named president and CEO of Rocky Mountain Power, one of ʲھǰ’s two retail divisions.

During her tenure at Rocky Mountain Power, PacifiCorp owned parts or all of 10 coal plants. Crane retired from that position in 2018. In the years since, the coal sector — once the thriving backbone of the West’s energy landscape — has quickly waned amid economic and regulatory pressures.

In an August 2021 interview with New Mexico radio station KSJE, Crane discussed her time at PacifiCorp, touting her team’s work to make coal plants function in a Western real-time energy market organized by California.

PacifiCorp, she said, was able to make coal plants ramp up and down more quickly and to stay on the grid without producing as much power as usual, a way to compete on the market with cheaper sources of energy.

“It’s an old paradigm to think of a coal plant as a baseload asset,” Crane said in the interview. “We had to start thinking about it in a more innovative way.”

In 2020, Crane took over the helm of Enchant from co-founder Jason Selch. At the time, the company was focused on a plan to take over the San Juan Generating Station — which was scheduled to retire in 2022 — and outfit it with carbon capture technology.

In an , Crane called that project a “model” for the electricity industry and said there were other “good opportunities” across the West. The attempt to purchase the plant, however, fell through and San Juan in 2022.

That year, PacifiCorp issued a request for proposals (RFP) for companies to pitch carbon capture systems for one or two units on the Jim Bridger plant, as well as one for a unit on the Dave Johnston power plant east of Casper. Of the 21 bidders who met the RFP’s requirements, only one submitted a proposal: a consortium led by Enchant.

A supplemental request for information released in February 2023, designed to “avoid delays to the RFP process,” did not net any additional bids.

There are open questions about whether the Jim Bridger project would be viable. Despite new EPA regulations that will require carbon capture technology on any coal plant operating past 2039, the technology is largely unproven in the energy sector. A 2023 plan from PacifiCorp did not identify carbon capture on any of its plants as the best use of resources, although it did show potential cost benefits.

But PacifiCorp’s March filing with the Wyoming Public Service Commission says that if it accepts Enchant’s bid, the company would begin capturing carbon by 2028.

Monahan of Sierra Club said that is “incredibly quick,” especially given previous PacifiCorp statements that seemed to imply that carbon capture was not ready for prime time and the fact that extensive studies still need to take place on the project.

Wolff at Enchant said in an email that Crane informed Enchant Energy that she had recused herself from any decisions related to business activities between the two companies. Her position as board chair, he said, involves four scheduled board meetings per year and “occasional ad-hoc board meetings as required.” He declined to share details of her compensation.

“Cindy Crane performs her duties as the Board Chair for Enchant Energy Corporation very well,” Wolff said. “We have no knowledge of her duties or performance at PacifiCorp.”

ʲھǰ’s states that it is “almost always a conflict of interest for a Covered Party to work simultaneously for a competitor, customer or supplier.” Any potential conflicts, the code states, must be evaluated by the company’s audit committee.

ʲھǰ’s Eskelsen would not say whether the audit committee had taken any action but said that “Cindy’s position with Enchant Energy and her affiliations with Enchant Energy were fully disclosed.”

Climate costs

Even without carbon capture, PacifiCorp appears to be eyeing a bigger role for its coal fleet.

In April, the company nixed its plans to accelerate the closure of three coal plants.

PacifiCorp in 2023 that it would shutter the Huntington and Hunter coal plants in Utah by 2032. But an — released in April — pushed Huntington’s closure to 2036 and Hunter’s retirement to 2042. The retirement of two of the four units at the Jim Bridger plant was also delayed to 2039, from 2037. The document cited costs and a relaxed federal rule on ozone pollution to justify the shift in the retirement dates.

Under EPA regulations announced this spring, those plants will have to either install carbon capture or co-fire with natural gas and retire before 2039 to stay open past 2032.

Eskelsen said that long-term planning is “based on least-cost, lowest risk modeling of generation resources” and that the company was “fully engaged in developing the update before Cindy Crane was named CEO in September.”

“She was briefed on the IRP Update, but she did not change its direction or conclusions,” he said.

The update also added more natural gas resources to meet periods of high energy demand, while cutting back on planned solar and battery storage and adding some wind projects. The company also canceled a 2022 request for proposals to gather new renewable resources.

That’s partially the company’s reaction to the changing policy and legal landscape.

The Oregon court case put hundreds of millions of dollars in liability costs on PacifiCorp’s books for wildfire damages. Warren Buffett, the investor whose Berkshire Hathaway company owns PacifiCorp, has said the wildfire liability .

Utah legislators also passed bills in 2024 that could , including one that allows the state to purchase a coal plant before it retires. That offers additional incentives to keep the Hunter and Huntington plants open. And in Wyoming — where the Jim Bridger plant is located — a 2020 law requires coal plant operators to explore installing carbon capture on their facilities before shutting them down.

Logan Mitchell, climate scientist and energy analyst for the environmental group Utah Clean Energy, said PacifiCorp’s revised IRP would lead to a 63 percent reduction in greenhouse gases from the utility’s generation fleet by 2030 — down from the nearly 80 percent estimated under its 2023 plan.

“This is a big deal in terms of the West’s energy mix. It will make it very difficult to decarbonize the electricity system,” Mitchell said in an interview. “If our goal as a country is to decrease emissions nationwide by 50 to 52 percent by 2030 … it’s hard to see how we get there when we have a major utility taking a step back.”