Lawmakers Try Slowing Coal Plant Closures, As Other States Do The Opposite

Mar 8, 2019

Benefit/Cost of Retirement Analysis of Pacificorp's Coal Fleet.
Credit Pacificorp

Early one November morning last year, Devils Tower Senator Ogden Driskill got a call from Afton Senator Dan Dockstader.

"He'd discovered that Rocky Mountain Power was accelerating closure of a number of their coal-fired units down around Kemmerer in his district," Driskill said.

Driskill learned the utility was discussing plans to accelerate the shutdown of the Naughton Power Plant and several others. A Rocky Mountain Power representative said he's responding to an initial draft study and nothing final. Last year, the plant's owner Pacificorp revealed more than half its coal-fired units were more expensive to run than with alternative energies. That analyzed benefits of retiring several Wyoming coal plants. Driskill says it doesn't really seem like it's about economics though.

"My gut reaction is there's a huge unwillingness to purchase coal-fired energy on the West Coast and they're flexing their muscles," Driskill said.

An early closure would have huge impacts on communities, he said.

"It's not just the effects on the company itself. It's the effects on housing and workforce and tax bases in entire counties. You know, there's a thousand plus jobs tied to those plants."

So, Driskill co-sponsored a bill to keep coal-plants running. It's called, "New Opportunities for Wyoming Coal Fired Generation" and requires utilities to look for a new owner before shutting down a coal unit, whether that's shutting down for good or switching over to renewables or gas. If the utility gets a reasonable offer per the Wyoming Public Service Commission's analysis, they're required to take it then buy-back that power even though it's not their plant anymore.

"It encourages someone to go do the right thing and the right thing is to keep those producing power the way they were forecast," Driskill said.

The bill went through both the state House of Representatives and Senate with little discussion. The bill comes as more states commit to renewable goals. New Jersey and California are now looking at a 100 percent clean energy commitment and plant retirements are at near all-time highs.

Naughton Power Plant - one coal-fired unit was shut down in January of this year. Two others are set for retirement in 2029.
Credit Pacificorp

The consensus among legislators was that plants would probably not be bought, even with the requirement. But if they do, some legislators felt, that's even better. Not everyone felt that way.

Connie Wilbert, Wyoming's chapter director for the Sierra Club said, "I was disappointed that there wasn't a more robust discussion of this bill. What kind of a can of worms are we actually opening?"

She said the bill could absolutely cause problems if a plant gets bought.

"What it could do is lock Wyoming rate payers into much higher prices for their electricity for years to come," Wilbert said.

That's because customers would be on the hook for a higher percentage of power produced in these plants. One coal expert points out rates would not necessarily increase if a utility paid a well-calculated avoided cost. Wilbert said there's also increased risk in selling to an unregulated buyer. For instance, she said there's less certainty about guaranteeing workers' benefits or reclamation costs for the land. Wilbert sees the bill as an attempt to prop up coal.

Economic Coal Unit Retirement Analysis Process
Credit Pacificorp

"What this bill is, is an attempt to force utilities to not sell these old these uneconomical coal plants." Wilbert said, "It's a very challenging transition that we face, but we face it trying to ignore it or pretend like it isn't real is not actually going to solve our problems."

University of Texas Energy Institute's Joshua Rhodes said the bill is unlikely to keep coal plants running.

"I can't think of anyone who would want to line up to buy it. If the current owner can't make money with that business model, I don't see how anyone else coming into it would," Rhodes said.

Unless, he said, the plant were able to be sold at a low enough price.

Another coal expert Matt Preston said there are other possible uses for the plants given an unregulated buyer could pick it up. For instance, it would be harder for regulated utilities to take advantage of federal carbon capture tax credits.

Both Preston and Rhodes agreed the bill likely won't be enough to keep coal plants alive, but it may act as a gut check before utilities close the doors.

Increase/Decrease In Nameplate Capacity With Assumed Retirement
Credit Pacificorp

"It's sort of to plant the idea in the head that they shouldn't willy-nilly retire coal plants," Preston said. "Not that you shouldn't or couldn't. It's just that you need to think about it when you do it and you should do it for the right reasons. Not perhaps for political reasons."

Laramie Democratic Senator Chris Rothfuss says he agrees the bill won't somehow save coal. He voted for it, though, after initial skepticism.

"I don't think the piece of legislation we passed solves any problems. It's unlikely to probably even end up getting used in any meaningful way, although if it does maybe there's a beneficial outcome," Rothfuss said.

Rocky Mountain Power hasn't announced any early plant retirements but will release a complete analysis on its fleet this summer.