Utilities, Industrial Customers Disagree Over Proposed Bill

Feb 11, 2020

Naughton Power Plant - one of Rocky Mountain Power's plants that's scheduled to close earlier than anticipated
Credit Pacificorp

Last year, the Wyoming legislature passed a bill called "New opportunities for Wyoming coal fired generation" requiring any utility retiring a coal plant earlier than scheduled would make a good faith effort to find a buyer.

Through the interim, legislators have been putting together a bill that would lay the groundwork for that to happen.

"If a company wants to abandon its coal-fired power plant, it helps Wyoming if we can preserve that. Take that coal-fired power plant, operate it, keep the jobs, [and] keep the CO2 production because we want to use it for recovery of oil and gas," said Casper Senator Charlie Scott.

In the second day of the 2020 Budget Session, the Senate Corporations, Elections, and Political Subdivisions committee came together to discuss the bill and ended up briefly delaying any action on it until later this week.

As it stands, the bill seeks to give the Public Service Commission (PSC) the authority to oversee the sale of a retiring coal plant. It would allow the purchaser of the power plant to sell electricity directly to customers. It would also prevent the utility looking to retire a coal plant from making customers pay for the new facilities unless the PSC determines said-utility made a good faith effort to sell the plant.

Scott said the bill would ideally appeal to industrial customers by offering cheaper electricity, which he said could bring in new jobs and new customers.

"We've heard a lot of complaints from large industrial customers over the years about some of the rates other states... have directly subsidized those. Wyoming is different in so much of our lode is large industrial, so we can't afford to do that so we don't. But we still have a problem in being competitive in this area. And this solution will not only help make our plans viable, but help that particular problem," he said.

Terrence Manning, CEO of Glenrock Energy, said a coal plant could be used as a hub for enhanced oil recovery.

Most of the conversation centered around an amendment from Scott. It would change the bill's language so that whoever bought a retiring coal plant may sell electricity to an electric public utility - like Rocky Mountain Power - for the benefit of the everyday residential customer. And if that utility does buy back the power, that customer's rates wouldn't be severely impacted.

Several utilities came out against the bill. Scott posited that's because their profits would be affected if consumer's rates wouldn't be increased to help pay for new facilities. Black Hills Energy requested to be exempted from the proposed bill. Cooperatives and municipal public utilities are already exempted. Bruce Asay with Montana-Dakota Utilities opposed the bill saying it's just a matter of complexity.

"It's like whack-a-mole. You can address one thing and you take care of that, but in addressing that you pop up another problem that needs to also be addressed," Asay said.

With utilities on one side and industrial customers on the other, the conversation mostly came to a halt. Thor Nelson who represents Wyoming Industrial Energy Consumers said there will have to be a trade-off.

"At the end of the day what the committee has to weigh is what's more important: the utility's profit or the ability for a company to buy one of these coal-fired power plants that a utility has declared to be uneconomic and continue to use that to provide energy to customers in Wyoming who want to buy power from that plant," he said.

Lander Senator Cale Case called the language within the proposed amendment torturous. Cheyenne Senator Tara Nethercott agreed, offering the committee take some time to polish the language and reconvene later this week.

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