For Lawmakers, Boosting Coal Is About Financial Survival

Feb 21, 2020

The House Revenue Committee sat down on an early Wednesday morning to a full audience. Chairman Dan Zwonitzer, who represents Cheyenne, switched seats in order to testify on a bill called "Reliable and Dispatchable Low-Carbon Energy Standards."

"What we're setting up in this bill is, in some cases, a portfolio standard where a portion of our electricity base comes from coal," he said.

Zwonitzer acknowledged coal demand nationwide is decreasing, but he said maybe that's happening faster than it needs to.

Randall Luthi, Wyoming's chief energy advisor, agreed, saying there is room for coal production to be preserved and even grow.

"There's some that say we must rip off that bandage now and end our use of coal for electricity. And while, again, I say that that decline is likely to continue, Wyoming should not be the state to push the coal industry off the cliff," he said.

Instead, Luthi said Gov. Mark Gordon wants to encourage new uses for coal and extend its life.

House Bill 200 is one of 16 bills introduced this session related to bolstering coal: finding new uses, establishing new markets internationally, and heavily encouraging the continued life of power plants that burn it.

A portion of the state's assessed valuation broken down by sector. Coal represents the large gray portion.
Credit Cooper McKim with data from the Department of Revenue

Compared to last year's legislative session, the percentage of bills related to coal increased by over 300 percent. The majority relate to bolstering the industry, even though interim discussion centered around resolving bankruptcy concerns.

House Majority Floor Leader and Gillette Rep. Eric Barlow said there was no coordinated strategy among lawmakers to help coal, but there is general consensus that the resource can live on.

"I don't know that we're going to see a renaissance in coal-fired power plants, but maintaining the ones we do have coupled with some of the carbon capture, potentially making coal cleaner to use, and then the alternate products thing," he said. "I don't think any of them are going to solve it all. I think they all just contribute, hopefully, to at least decreasing the rate of decline for coal."

With that, it will create what lawmakers are calling a "new normal." With, maybe not the same amount of production but a leveled off version.

Riverton Rep. David Miller said he feels confident that can happen because renewables alone can't power the U.S.

"I think coal has a place going into the future. As soon as the tax credits die off for the renewable energy, coal will be toward the top of the list again.," he said. "I see it stabilizing."
 

Compared to last year's legislative session, the percentage of bills related to coal increased by over 300 percent

Rep. Zwonitzer said there's also a significant incentive in ensuring coal stabilizes. While lawmakers look to help communities and jobs, boosting coal is also about financial survival.

The electricity-producing resource is a primary revenue sources for a state that's recently needed to pull repeatedly from its rainy-day fund to balance the budget. The supplemental budget last session required legislators take about $50 million from the account. This session, it could be double that. In short, Zwonitzer said it's important to keep coal around.

"That's our number one source of income, and we need to be figuring out how to keep it as viable as possible in the long term until we come up with a better way to raise revenue in the state," he said.

As far as better ways to raise revenue for Wyoming, opinions differ heavily. There's plenty discussion of cutting state services or K-12 education funding - including from the governor's office.

Rep. Eric Barlow and Rep. Scott Clem testify to the House Minerals, Business and Economic Development Committee on a bill to help coal miners recoup lost wages.
Credit Cooper McKim

Zwonitzer said the other side of the equation, taxes, are tougher for lawmakers to swallow.

"We can't raise taxes this session, there's no will to do so. The budget is just going to get worse," he said.

There are various small taxes in discussion, but something that would raise big money, like a state income tax, Miller said is dead on arrival in Wyoming.

"Once, you know, if minerals are shut down in Wyoming, and our population drops to 150,000 or 200,000 and... we have all these tourist's taxes, but it's still not enough. I could see maybe a state income tax then," he said.

Zwonitzer said this session has become about Band-Aids to help the coal industry stay viable.

"Certainly I am upset that we don't have a new strategy for how we're going to take our state into the future revenue wise," he said.

The governor's office has said there does need to be a sober conversation about the future, including Wyoming's tax structure, which relies on coal for 15 to 20 percent of its state taxes.
 

"We need to be figuring out how to keep it as viable as possible in the long term until we come up with a better way to raise revenue in the state"

But House Majority Floor Leader Barlow said it's probably not going to happen this year.

"I think it's really challenging to have those real, frank conversations when the state is sitting on a rainy-day fund of $1.7 billion," he said.

Not to mention there are still strategies to save money and help coal to rebound or, at least, stabilize.

Gov. Gordon said this session is step one in a long process of getting Wyoming back on track.

"We have an urgency to address these issues, but it's not a panic. In fact, what we need to do is think carefully about how we transition and position or economy going forward," he said.

Meanwhile, lawmakers are eyeing ways to generate more money from renewables in hopes of having it replace lost income from coal revenue.