Coming off a massive wildfire year lawmakers are thinking about how to curb skyrocketing electricity rates, as electric companies’ legal and insurance costs climb. But, a last minute piece of legislation didn’t make the final cut – for now.
The interim bill spawned out of conversations over the summer from the Legislature’s Interim Minerals, Business and Economic Development committee. They heard from industry leaders about the threat of wildfire to electric utilities' ability to deliver reliable, affordable power.
“For 100 years, we just built and we built safely in a way that did not think of wildfire as our number one concern. And wildfire has become, in my opinion, our number one concern,” said Rocky Mountain Power’s Vice President of Government Affairs Tom Carter – the company is the largest electricity provider in Wyoming. “We have seen it do some real awful things in places like Hawaii and Colorado, and we want to make sure that Wyoming is protected.”
Across the country, utility companies have been blamed for their infrastructure sparking wildfires. This has increased in recent years as landscapes are increasingly affected by drought. As a result, utilities have been sued for billions by private property owners – everything from economic to emotional losses – even sometimes bankrupting companies. As this continues to happen, Carter said their insurance costs are climbing.
“The insurance market has become quite constrained for utilities, not just the investor owned utilities, but for all utilities. There is a fear related to what wildfire could do to the business and that, of course, gets passed onto the ratepayer,” Carter said to lawmakers at the Dec. 2 committee meeting.
The lawmakers came together for a special meeting to discuss the proposed bill – typically they would have been done gathering until the legislative session next year. It was crafted to mimic similar legislation passed in Utah earlier this year.
The Wyoming bill was two-fold. First, it requires electric companies to have a “wildfire mitigation plan” – like trimming vegetation or burying power lines to avoid sparking out-of-control blazes. The latter being a big undertaking that could be expensive in itself.
“We're talking about finding ways to completely redo the way in which we deliver utility,” Carter said.
If the company follows through with the mitigation plan, then the second part of the bill would’ve come into play. Letting utilities off the hook with some liabilities. So, if their infrastructure ignites a fire, they are only responsible for the economic losses to a private property owner – not the emotional losses, which has accounted for a large portion of some lawsuits.
“It sends a message to the insurance, to the fiscal markets, to all those investor and insurance agencies that there are protections available to the utility, to the rate payer, to the communities,” said Carter.
He said that ideally electric companies’ insurance won’t keep climbing. And ratepayers won’t have to keep making up for what could be astronomical costs.
But, there’s no proof that’ll happen. Wyoming is looking to Utah, which is in the early stages of implementing the new legislation.
“We have not seen any new realized savings against that. But we do believe that that is coming,” said Carter.
But that unknowing concerned lawmakers.
“And so it's all on speculation,” said Sen. Chris Rothfuss (D-Laramie). “I have no reason to believe based on any data, based on any analysis, based on any economic study, that the insurance will actually go down.”
Rothfuss said they have to consider ratepayers first and foremost.
“If this is not definitively a reduction in cost relative to not passing this legislation for the rate payers, I'm at a loss to why we would pass this legislation,” Rothfuss said.
His sentiment was echoed by his colleagues over the information-heavy two-hour meeting.
“This is shifting from like, “This will be actively beneficial and saving you money,” to like, “We're just trying to prevent the worst possible outcome,”” said Rep. Cyrus Western (R-Big Horn.). “Is my understanding correct there?”
Carter answered that it’s, “both.” Reiterating that preventing wildfires could cost ratepayers up front, but save them money in the long run.
Ultimately, lawmakers decided there wasn’t enough time between now and the 2025 legislative session in January to find consensus in the bill.
“We've been at this for over two hours, and it seems we're not getting a lot of movement. So with that, I will close public testimony,” said Rep. Donald Burkhart (R-Rawlins), who chairs the committee.
But they aren’t giving up on the issue.
“I'm a little concerned that this was written by utility companies, and it seems heavy on the liability exposure reduction,” said Rep. Scott Heiner (R-Afton). “I think we need to look at this a little more, take a deeper dive, but I think it is something worthy of researching. It needs to happen to protect our state as well as our ratepayers.”
The lawmakers chose to table the bill until next summer, during the 2025 interim.
