State legislators respond to rising electric rates with several draft bills
Have you noticed your electric bill going up? Well, there are a lot of reasons why – everything from a volatile fossil fuel market to extreme weather to efforts to save Wyoming’s coal industry, which has all been thoroughly covered by Wyofile’s Dustin Bleizeffer thoroughly covered by Wyofile’s Dustin Bleizeffer.
So state lawmakers are proposing several bills for the upcoming budget session. They aim to keep rates affordable and electricity reliable. But, some say these efforts are making it more confusing.
Many of these bills sprang out of a historic rate hike request this past year. The state’s largest utility, Rocky Mountain Power, proposed an almost 30 percent increase to Wyoming customers’ electric bills, and a lot of people were horrified.
“My electric bill will raise $86 a month,” Toni Bate of Rock Springs said tearfully at a public meeting this summer. “I have hardly any money. I don't know where I'm gonna get the money to pay this. I just can’t do this.”
Increasing costs is a real burden to people, and the Wyoming Public Service Commission (WPSC) tries to balance that burden while also being fair to the utility, like allowing them to recoup costs and make a little profit too. The commission’s chair Mary Throne explained in a past meeting that they can’t ‘negotiate’ better deals for ratepayers.
“When the evidence supports a rate increase, the commission lacks the authority to deny the application for such rate increase,” Throne said.
Ultimately, Rocky Mountain Power’s giant rate hike request was scaled back, partly due to a calculation error on the company’s part. Customers saw about a 5.5 percent increase in their bills starting this year.
But the threat of such a giant rate hike was too close for comfort and lawmakers decided to get involved.
“Alright, welcome to another special session.” Representative Jared Olsen (R-Cheyenne) led a Joint Corporations, Elections & Political Subdivisions committee meeting this fall. “We’ve got a pretty aggressive agenda in front of us. We do have us working through the morning…”
The lawmakers spent days crafting six draft bills that attempt to regulate what kind of costs a utility can pass on to its customers. Attorney Shannon Anderson is with the Powder River Basin Resource Council, an advocacy group, and has tracked the bills closely. She said they’re a good faith effort.
“Sort of trying to address the issue of how do we better protect Wyoming utility customers from outside forces that may be impacting those utility rates?” Anderson said.
But, she added that to some extent, the WPSC is already doing what’s in these bills.
“The legislators just need to kind of let them do that job,” she said. “To some extent, they're just further complicating an already complicated system.”
Like Senate File 22, which requires the state to create standards for what is “reliable” electricity.
“So this one comes from the idea that – and really the misperception to some degree – that a grid more dependent on renewable energy is going to be less reliable for customers,” said Anderson.
Basically, there’s concern over how consistent wind and solar power can be. Some lawmakers think that traditional coal power is the more “reliable” route. Several of the other bills also get at a general mistrust of renewables.
Then there’s other bills that try to prop up fossil fuel sources, like Senate File 25, which deals with utilities retiring coal plants.
“With that, there comes some uncertainty around the actual decommissioning costs of those coal plants,” Anderson said.
So the bill requires a third party to study what the actual costs might be, allocating half a million dollars from the state’s general fund, which Anderson said likely isn’t enough.
“It's really duplicative of what the utility already does, what the utility commission already has oversight over,” she said.
So the broader concern is that by further regulating utilities, it could have unintended effects.
“Something that looks like on its face is going to benefit consumers,” Sam Shumway, director for AARP Wyoming, said, “but ultimately it just increases cost for the utility, who then turns around and passes that on to the consumer and ends up increasing costs for the ratepayers.”
But Shumway said if lawmakers can get it right, the bills will give the public service commission more tools to scrutinize how utilities “pass those costs on to ratepayers to consumers, and ultimately, to protect the ratepayers.”
Now, if your head is spinning from all this utility talk, Shumway said, you’re not alone.
“It gets super technical,” he said. “I barely scratched the surface with the things that we're talking about here.”
But lawmakers will dig in over the next few weeks of the session.
As for Rocky Mountain Power, in an email to Wyoming Public Radio, the company said it’s committed to, “work with legislators to help them understand and be aware of potential customer impacts to any policies under consideration.”
The WPSC said in an email that they are not “at liberty to discuss its position toward any proposed legislation. We do, when asked, advise legislators about questions they may have regarding bills, but we do not take any position for or against the bills in our responses.”
Below are summaries of the other four bills that came from the Joint Corporations, Elections & Political Subdivisions Committee. For an even more in-depth explanation, check out Wyofile’s Dustin Bleizeffer’s reporting here.
Senate File 20 deals with utilities that serve customers in multiple states. Like Rocky Mountain Power which is on a six-state operating system, including Wyoming.
“There are states on the West Coast, particularly Oregon, that are not interested in our coal fired power plants,” said Anderson. “They care more about renewable energy and a low carbon future.”
So Rocky Mountain Power has invested in renewable projects to meet that demand, some even are in Wyoming. But lawmakers aren’t convinced those projects will benefit Wyoming, as the power is leaving the state to provide power for other states, so they don’t want Wyoming ratepayers to foot the costs.
“It's something that the public service commission already takes into account,” Anderson said. “But this would be another layer of protection to effectively insulate Wyoming customers from some outside forces that are driving demand for clean energy across the Western U.S.”
Senate File 21 guarantees cost sharing between a utility and its customers. Basically, Anderson said that if it ends up costing the company more than expected to deliver electricity, “the utility, and particularly the shareholders, should bear some of that risk.”
Rocky Mountain Power currently has an 80/20 cost sharing ratio; in other words, unexpected, additional costs are split 80 percent with customers and 20 percent with the utility and its shareholders. In its rate hike request, Rocky Mountain Power requested their part to be zeroed out, which really struck a nerve with some Wyomingites.
“Rocky Mountain Power is owned at the very top by Warren Buffett and Berkshire Hathaway, so there's big money involved in this utility,” Anderson said.
Senate File 23 is called ‘Public utilities energy resource procurement.’
“You're like, ‘Well, what the heck is this?’” Anderson said.
Basically, it requires a third party to oversee a utility’s choice for new power generation facilities – like solar, hydro, wind, etc. – just making sure it’s the most cost effective route for ratepayers.
“So recognizing that these are big decisions the utility is making,” Anderson said. “They're really the things that are driving rates and driving the future grid that we are going to have here. Our utility commission wants some additional oversight over that.”
Senate File 24 is similar. It requires a utility to work with Wyoming closely on its visions for future service, which in the utility world is called an ‘Integrated Resource Plan.’