Committee Digs Into Portfolio Standard For "Low-Carbon" Electricity

Feb 19, 2020

The Dry Fork Station, a coal-fired power plant, sits next to the Integrated Test Center which aims to research and develop carbon capture technology
Credit Cooper McKim

The House Revenue Committee heard testimony today on a bill that would require public utilities to provide a certain percentage of their generation from "dispatchable and reliable low-carbon electricity."

House Bill 200 describes "low-carbon" as electricity generated using carbon capture, utilization, and storage (CCUS) technology - a process that can store or reuse carbon dioxide. In Wyoming, that would mean utilities have an incentive to preserve coal-fired power plants by equipping new technology. They would have until July 1, 2030 to meet the standards.

Randall Luthi, Wyoming's Chief Energy Advisor, explained the bill would create a portfolio standard to incentivize fossil fuels, similar to what 29 other states have created for renewable energy.

"Taking the lesson that many states have enacted, we can now take the similar steps to assure that carbon sequestration becomes a part of the solution and not just always coal being, as they say, a part of the problem," he said.

Kara Fornstrom, chairman of the Wyoming Public Service Commission, said renewables can provide up to 80 percent of electricity, but fossil fuels are necessary for grid reliability.

Dan Zwonitzer, House Revenue Chairman and bill sponsor, said the portfolio standard wouldn't just shore up the grid, but ensure the coal industry lives on in Wyoming.

"We're just trying to make sure our tax base in this state, that the revenue keeps coming in, and to make sure that we keep those good paying jobs in some of our small communities going for as long as possible," he said. "It helps to meet that cleaner power future that I think everybody wants."

Jason Beggar, executive director of the Wyoming Infrastructure Authority, said CCUS technology is necessary to address climate change pointing to national and international evaluations.

Discussion revolved around the cost implications of the bill. As written, House Bill 200 looks to pass up to $1 billion in investment onto ratepayers. A newly introduced amendment would put a 2% surcharge cap on a customer's total electric bill. Those funds would then be put into a reserve to offset future costs; the amendment wasn't discussed or voted on.

Monika Leininger, organizer for the landowners' group Powder River Basin Resource Council, said the bill would hurt ratepayers.

"Unfortunately, these policies are regulatory taking. We simply can't force a utility to do this and then force it to pick up the cost and then limit the cost. That's a basic principle of utility law as I understand," she said.

Larry Wolfe, former lawyer with Holland & Hart, testified that carbon capture is simply not ready for commercial use and is too expensive.

"Which is why all the utilities in this country are not investing in it. So this bill which would force the utilities to invest in it is simply a statement that's contrary to this point to what the state of technology is," he said.

Beggar defended the bill's cost saying it would likely be more expensive to retire a coal plant, leave customers with stranded costs, and then invest in building renewable energy infrastructure. Fornstrom added there would also be cost-savings by avoiding the construction of new transmission lines to serve renewables.

Randall Luthi said the alternative here is to do nothing and watch coal continue its free fall in Wyoming.

"I would rather have Wyoming show the world we're willing to lead, we're willing to try and we're willing to work with consumers and utilities companies so the next CCS project is built in Wyoming," he said.

The House Revenue Committee will continue discussion of House Bill 200 this Friday and expects to vote on it.

Have a question about this story? Contact the reporter, Cooper McKim, at cmckim5@uwyo.edu.