Lawmakers focus effort to keep coal plants burning

Lawmakers advanced a measure that would make it more difficult for utilities to retire coal-fired power plants in the state, but tabled legislation intended to ensure reliable electric service.

The House Minerals, Business and Economic Development Committee advanced an amended version of House Bill 166 – Utilities-presumption against early facility retirements after two hours of public comment and committee discussion Wednesday. The 8 – 1 vote followed an initial hearing on a package of bills Monday. HB 166, which proponents claim would also ensure power reliability, will go to the House floor for debate.

The committee held back House Bills 155 – Electric generation-reliability and liability, 248 – Electricity production standard and 258 – Public utilities-reliability and transparency requirements for discussion after the session. Those bills would mandate a mostly fossil fuel-based portfolio and require state-regulated utilities to ensure 100% power delivery reliability under the threat of revoking authorization to serve Wyoming customers.

Although some bills driving at electric reliability and transparency concerns were put on hold, legislative leadership has agreed to move some form of legislation, Minerals Committee Chairman Rep. Mike Greear (R-Worland) said. Legislative leaders are determined to address what they see as a growing threat to the state; the utility industry’s gradual shift away from coal-fired power to renewable energy.

“I am not inclined, in any way, shape or form to not take any action on this issue this session,” Greear told committee members. “We have made a decision, within leadership, that this committee will take the lead on these discussions.”

This year’s suite of proposed legislation builds on past measures, such as 2019’s Senate File 159 – New opportunities for Wyoming coal fired generation, which forces utilities wishing to speed up retirement of a coal plant to first offer the facility for sale.

Critics call legislation counterproductive 

Lawmakers received a flurry of written and oral comments warning that the “shotgun” approach of pursuing at least eight bills seeking to mandate utilities burn coal was off the mark. 

But the overhaul of public utility regulation would result in higher costs and less reliability to Wyoming’s big ratepayers, a representative of industrial consumers said. Thor Nelson, a Holland & Hart attorney, spoke for the Wyoming Industrial Energy Consumers, a trade group of trona, oil and gas producers, refineries and other large electric customers in southwest Wyoming.

“If you create a system which forces these coal plants to stay in operation and shifts those costs from the customers outside of the state, who no longer want that power, to customers in Wyoming, there is no version of the world where that can be done economically,” Nelson said.

Much of the testimony in opposition to the Legislature’s approach this session suggested that authors of the legislation might be pushing too hard on punitive measures and mandates to protect coal-based power while not fully understanding how Wyoming operates as part of the western power grid.

Wyoming exports the bulk of electricity generated in the state — mostly coal-based power. Oregon, Washington and other western states that share the same power grid as Wyoming are swearing off coal. Simply put, said Nelson, there’s nowhere near enough demand for electric power in Wyoming to consume all of the coal-based power that utilities might be forced to keep online under the originally proposed legislative mandates.

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There’s no legal mechanism to force fellow western states to take Wyoming’s coal-based electricity, said Nelson, who noted his clients are far from adverse to coal or fossil-fuel-based electric power. The cost of keeping the state’s aging coal-fired power plants online would fall squarely on the shoulders of Wyoming ratepayers.

“We don’t think that these [proposed bills] will really get to the reliability issues that are front and center,” Nelson said. “We’re almost positive that if you do pass these bills in their current form rates will increase, possibly dramatically.”

Denise Parrish said assurances of reliability and cost transparency among Wyoming’s regulated utilities exist in current statute. “I don’t think [the legislation] will really change much in terms of reliability, unless there is an extreme cost,” said Parrish, who served at the Wyoming Office of Consumer Advocate for nearly 17 years, including a stint as deputy administrator.

“I heard people on the committee on Monday indicate that we have to have 100% reliability of our grid and our system,” she testified. “Well, then you’re going to have to have redundancy of every — not only generator, but transmission line. And that is extremely expensive — something that the citizens of the state just cannot afford.”

Wyoming rancher Joyce Evans said she worries lawmakers are rushing to save the coal industry, but the market forces driving the move away from coal are beyond the state’s control. Forcing utilities to keep burning coal would be as misguided as forcing ranchers to continue raising cattle even if every consumer went vegan, she said.

“They’re hurting consumers by forcing the use of a technology that is outdated,” Evans said. “Worst of all, they are causing a raise in the rates that we have to pay, just because something is iconic.” 

What’s driving coal utility legislation

Electric power outages during the recent freeze in Texas — likely intensified by human-caused climate change, according to experts — have amplified assertions that coal-fired power is more reliable than alternatives. Wyoming lawmakers, already scrambling to staunch the precipitous decline in demand for coal, insist the shift away from coal to renewables threatens grid reliability.

“I think it’s important for us to consider some of the lessons of [the Texas power outages],” Rep. Chuck Gray (R-Casper) told fellow lawmakers March 8 while arguing in favor of HB 155. “Overnight, there was no medicine, no heat, no ability to store food. The infrastructure broke down, and we need to ensure that the grid is reliable here in Wyoming.”

While there were disruptions to wind power generation in Texas during the freeze, the bigger vulnerability was the failure to fully weatherize natural gas systems, from production fields to gas turbine power generators.

Wyoming, the nation’s largest supplier of thermal coal — coal burned for power generation — suffers continual coal mine layoffs and a historic revenue decline as natural gas, wind and solar power generation out-compete coal in the utility market. Coal giant Arch Resources plans to exit Wyoming’s Powder River Basin where its Black Thunder mine is the second largest coal mine in the nation, by volume. Peabody Energy, the largest coal producer in Wyoming and in the U.S., also plans to shift focus from the Powder River Basin’s thermal coal to its metallurgic coal operations outside the state.

Rocky Mountain Power, a division of PacifiCorp which serves six western states including Wyoming, announced plans in 2019 to move up retirement dates for two coal units at the Naughton power plant outside Kemmerer to 2025, one coal unit at Jim Bridger outside Rock Springs in 2023, and another Jim Bridger unit in 2028. It will retire all four coal-fired units at the Dave Johnston plant near Glenrock in 2027 as originally scheduled.

Gov. Mark Gordon and the Wyoming Legislature has enrolled the Wyoming Energy Authority, University of Wyoming School of Energy Resources, Wyoming Attorney General’s office and several private partners to armor the state’s coal interests on legal, lobbying and technology fronts to keep coal mines and coal-fired power plants in the state in operation for as long as possible. The overriding vision is to push technology advances in carbon-capture, utilization and storage at coal-powered plants. They hope the technology can be applied to one or more coal-fired power plants scheduled for early retirement as a proving ground. The state then would export the technology to the fleet of coal plants in the U.S. that make up Wyoming coal’s shrinking customer base.

Casper-based Glenrock Petroleum, for example, holds interest in the historic Big Muddy oilfield near the PacifiCorp-owned Dave Johnston coal-fired power plant. Rather than allow PacifiCorp to close and decommission the plant, Glenrock Petroleum wants the utility, or a potential new owner, to apply CCUS technology and use the captured CO2 for enhanced oil recovery in the Big Muddy.

Can carbon capture save Wyoming coal?

A strategy like the one envisioned by Glenrock Petroleum would save jobs at the power plant, help keep electric rates low, and add jobs and revenue by boosting oil production, said Mike Nasi, environmental and energy attorney for the Texas-based Jackson Walker firm.

“What I love about what Wyoming has done is they haven’t just said, ‘woe is me. Take my coal plants as they are,’” Nasi told lawmakers. “The policies that this body has passed in partnership with the governor are, ‘Listen, we’ll meet you halfway, we’ll make this stuff carbon neutral, and we’ll change this dialogue forever for us and for the world.’”

Nasi warned that if Wyoming allows coal plants in the state to close, it will forever lose an opportunity to launch coal-based CCUS and be left to uncertain, intermittent power reliability and costs as more renewable sources of energy are added to the grid.

However, many utility and power grid experts say CCUS technology has advanced too slowly to catch up with rapidly changing market forces pushing coal out of the utility mix. Efforts to apply carbon capture to coal-fired power plants, so far, have not proven economic.

Environmental and natural resources economist Jason Shogren, who also serves as the Stroock Chair of Natural Resource Conservation and Management at the University of Wyoming, said there’s value in Wyoming pursuing carbon capture technologies and finding other uses for coal. However, in written comments to lawmakers, he said he couldn’t support any of the bills as proposed because they “attempt to keep coal going by imposing a hidden tax on Wyoming ratepayers.”

More populous states that share the western grid with Wyoming will continue to respond to climate change risks by demanding less coal, Shogren said. There’s no real mechanism to force other states to take Wyoming’s coal power.

“Going it alone will not work, however, as we are on an energy grid designed to provide energy at lowest risk and lowest cost,” Shogren said. “Trying to ‘shame’ other states into wanting coal will not work if the free market gives them other low-cost options.”