Several bills that made it out of the session attempt to protect Wyomingites from the rising costs of electricity.
Last year, Rocky Mountain Power’s Wyoming customers were facing 30 percent utility rate hikes. After public outcry and discussion, it was whittled down to about 5.5 percent. But, the process was eye opening and inspired six committee bills during this year’s budget session, and five made it through.
“The legislature really saw themselves as needing to respond to that and leap into action to address what could potentially be happening to Wyoming as we transition energy sources,” said Powder River Basin Resource Council staff attorney Shannon Anderson.
That’s because Rocky Mountain Power said the rate hikes were needed partly due to the rising and unpredictable cost of fossil fuels, but some Wyoming lawmakers speculated that it was due to the company’s investment in renewable energy infrastructure.
“The backdrop is there are legislators who really do see the growing amount of renewable energy mix in Wyoming and across the western U.S. as a threat to both our fossil fuel industry here,” Anderson said. “They also have concerns about whether renewable energy is reliable – whether it's affordable.”
Eliminating costs that don’t benefit Wyomingites
One bill that has been signed into law Wyoming’s Gov. Mark Gordon is called ‘Electricity rates for costs that do not benefit Wyoming.’ Rocky Mountain Power serves customers across six states – some of which have different laws and energy requirements than Wyoming. For example, Oregon is looking to move away from fossil fuels, so that requires more renewable energy infrastructure to supply those customers.
“And Wyoming people will have to start paying for those energy choices,” Anderson said. “So the bill sets up a framework where Wyoming pays for Wyoming stuff, and you have to really, as a utility, show a benefit to Wyoming people and our customers here, before you start charging ratepayers.”
While Anderson noted that the notion that renewables are more expensive or unreliable is outdated, the premise behind the bill is reasonable. She added that it reinforces obligations already in place for the Wyoming Public Service Commission, which regulates public utilities in the state.
“It just sort of reflects the principle that we want to make sure that what people here are paying for actually benefits us, which makes perfect sense,” she said.
Decommissioning costs
One of these six utility-related bills didn’t pass – SF25 Reclamation and decommission costs.
“The bill really dealt with an assumption that there's all kinds of liability related to coal ash and other sorts of environmental contaminants that are at these coal plants,” Anderson said. “And we need to make sure that Wyoming ratepayers aren't paying for that solely as, say, Oregon exits from our coal plants.”
But the bill was completely rewritten in the Senate to essentially say that the Department of Environmental Quality (DEQ) would review decommissioning studies that are already done by utilities, Anderson said.
“Then when it got to the house, everybody agreed, ‘We don't really need a bill to do that. And it just complicates it. Let's not do this through bill. There'll be a commitment going forward from the DEQ,’” Anderson said. “They regulate coal ash, they know what the permit terms are and they'll be able to help inform the utility commission of what those requirements are, but we don't really need a bill to do that.”
Doubling down on need to study carbon capture tech
But, there is one other bill, SF42 Low-carbon reliable energy standards-amendments, that made it through and was signed by the Governor that Anderson said could cost Wyomingites more money. It builds on existing law, which requires public utilities to study the feasibility of installing carbon capture technology at their coal plants, in an effort to keep coal fired power in the energy mix. Initial reports show that the retrofit could cost up to $1 billion for one unit at a coal plant, something that consumer advocates fear could fall on the backs of Wyoming ratepayers.
While utilities continue to study the feasibility of a retrofit, they are charging customers for the costs of the research. Last year, Wyoming’s Rocky Mountain Power customers saw a 0.3 percent charge and Black Hills Energy customers saw a 0.67 percent charge starting in February.
The final feasibility reports were originally due this month Anderson said.
“We were looking forward to the utilities coming to the commission and basically saying, ‘Hey, we've looked at carbon capture, we've charged ratepayers to look at carbon capture, we have done our very best. And our answer is still, we cannot do this,’” Anderson said.
But, the new legislation pushes the timeline back. The deadline was pushed from 2030 to 2033 to either implement the carbon capture retrofits or prove to state regulators that it doesn’t make financial sense to Wyoming ratepayers. The new language also reduces the amount of carbon that’s expected to be captured from a unit – from 90 to 75 percent.
Proponents of the bill say pushing back the deadline and lowering the carbon capture threshold will in turn lower the cost of the potential projects.
“It’s probably conceptually cheaper to do nothing,” Randall Luthi, Gordon’s energy policy advisor told House committee members this session. “But I can also say, and it is my opinion, to do nothing will have a tremendous cost for Wyoming, because ‘nothing’ means we’re going to continue to shift from our fossil fuel units to renewables.”
The other utility bills
Several other utility-rate hike related bills that made it across the finish line of the budget session were SF21 Public utilities-net power cost sharing ratio, SF22 Public service commission-electricity reliability, SF 23 Public utilities-energy resource procurement and SF24 Public service commission-integrated resource plans, which you can read more about here. All but SF24 have been signed by the Governor.
