CASPER – Utility companies operating in Wyoming have a mandate to follow: ensure reliability of the grid while protecting ratepayers. To uphold these commitments, the state’s largest utility announced plans to accelerate the retirement of its coal fleet last month, including units at Naughton in Kemmerer, Jim Bridger near Rock Springs and Dave Johnston in Glenrock. Under the plan, the first coal unit in Wyoming will close in 2023.
But state lawmakers are determined to introduce legislation that will keep the coal facilities breathing for as long as possible – even if that means overhauling the traditional role of the Public Service Commission, the state board regulating utilities.
Last week, the Legislature’s Corporations, Elections & Political Subdivisions committee advanced a bill that could open up transmission lines and customers to new purchasers of otherwise retired coal-fired power plants. The bill builds on Senate File 159, a new law requiring utilities to undertake a “good-faith effort” to sell coal-fired power plant units before retiring them. But the Public Service Commission is still ironing out the exact rules governing the law. Both state officials and the public last week urged the committee to use discretion before deregulating utilities.
“We are concerned about opening up the market to competition on a very limited basis without a larger plan,” said Denise Parrish, deputy administrator at Wyoming’s Office of Consumer Advocate. “... It leaves open the possibility of stranded costs, and we just think that if the committee wishes to open the market, it should do it in a more deliberate way, as opposed to a piecemeal way.”
With the loss of customers, a former owner of a coal-fired power plant may be left with a smaller pool of customers paying the utility’s fixed rates, Parrish explained. As a result, these “stranded costs” could be transferred to existing ratepayers, bumping up their electrical costs.
“We don’t think (the bill) adds value,” Parrish continued. “These customers are already taking service from a utility and would just be moving that service to another provider.”
Others testifying Tuesday underlined the need to rigorously scrutinize interested buyers before handing them the keys to a coal-fired power plant, too.
“Yes, we want you to go out and find a buyer for these plants, but not just any buyer,” Rep. Sara Burlingame, D-Cheyenne, told the committee. “We want a buyer that will get energy online. We want a buyer that will take their obligations seriously. And one of the things that we are adding to that laundry list is that we don’t want a buyer to strip assets and zero out benefits and pensions.”
Burlingame proposed an amendment to the bill that would require interested buyers to commit to existing worker obligations at a unit before assuming ownership.
Despite the committee’s decision to approve Burlingame’s amendment and advance the bill to session, members subsequently declined to support another bill intended to buoy the state’s coal-fired power plants.
Under the other proposed bill, the Public Service Commission and utilities would not only have to ensure the lowest possible electricity cost for consumers, but they would also need to take steps to consider the impact a utility’s actions could have on energy employees, tax revenue or “any other factor related to the early retirement that the commission deems necessary.”
This was not the first time the bill surfaced in a committee meeting before Wyoming lawmakers.
The Legislature’s Minerals, Business & Economic Development committee introduced the draft bill earlier this month, but requested its sister committee consider it, too.
Mary Throne, who serves as the deputy chair of the Public Service Commission, also recommended lawmakers exercise caution before endorsing legislation that could overhaul the fundamental responsibilities of the commission.
“This is an expansion of our traditional role to be involved in transmission assistance; community impact assistance is not something remotely within our wheelhouse,” Throne said.
Furthermore, the results of two ongoing investigations into the state’s largest utility could influence the conversation too, Throne said. The commission recently launched an additional investigation into Rocky Mountain Power, this time with a focus on the company’s Integrated Resource Plan.
“We think the implementation (of this bill) would be difficult,” Throne added. “We are in the middle of a coal study investigation ... In addition, as we also noted, the initial early retirement is not planned until 2023, so there is time to consider these complicated issues.”
Lawmakers declined to move the second bill to session. The Public Service Commission will hold its third technical conference on Senate File 159 on Dec. 2.