Quit blaming wind and solar for the high costs of coal and gas

Sen. Charles Scott (R-Casper) says he wants to do “some radical things” to change Wyoming’s energy policy.

But what’s so radical about abandoning free-market principles and ignoring the facts to suppress anything and everything that might possibly compete with fossil fuels? The Legislature has been doing that for years. Perhaps the only thing “radical” about Scott’s most recent demonization of renewables is his unabashed disregard for the available data.

Without providing any evidence, Scott charged that a utility’s proposed 30% electric rate hike is a result of Wyoming being “overloaded with the wind and the solar.” That despite Rocky Mountain Power’s explanation that the requested price increases are “driven largely by increased market prices for power and natural gas, increased contract prices for coal and coal supply limitations.” 

Why, after all, should the longest-serving legislator in Wyoming history help his constituents by addressing the actual problem when he could, instead, harness the hysterical public reaction to two proposed rate hikes to score political points and pummel the reliably unpopular bogeyman of renewable energy?

Scott told the Joint Corporations, Elections and Political Subdivisions  Committee he will draft a bill to impose a one-year moratorium on yet-to-be-permitted industrial wind and solar energy projects that primarily serve customers outside Wyoming. 

What would that accomplish? Nothing positive, but it would further hamstring Wyoming’s ability to compete in the growing market for green energy and inhibit our fight against the human-caused climate change that’s literally killing the planet. 

Rather than seize on the demand for wind and solar, the Wyoming Legislature once approved funds to sue other states for exercising their right to only buy electricity generated from renewable resources. Put another way, Republican lawmakers used state funds to interfere with the free-market.

While incongruous with the right’s love affair with laissez-faire capitalism, that’s the mindset that led Rep. Clark Stith (R-Rock Springs) to claim at a Public Service Commission hearing in Casper last month that Rocky Mountain Power’s massive rate hike requests are due to the company’s “radical left-wing agenda” to invest in renewable energy. That’s a populist viewpoint guaranteed to play well in most of Wyoming, but it’s not true.

I don’t blame RMP’s customers for being upset about a combined 30% rate increase. For residential customers, the total monthly increase would be about $20. Commercial customers will pay even more. 

But spurred on by those forever intent on protecting coal interests, and  despite all evidence to the contrary, politicians and the public are blaming the wrong industries. It’s absurd to suggest the economic pain is caused by wind and solar energy.

Rocky Mountain has filed for two rate hikes. The largest is an average 21.6% annual increase to set base rates for the next several years, to recover $140.2 million.

The second request is for a temporary average rate increase of 7.6% to recover $50.3 million of about $90 million in unexpected fuel costs and power purchase overruns due to extreme heat, cold and drought last year. It is set to expire next July.

Rocky Mountain is a regulated utility but also a monopoly, and it’s thriving. Its proposed massive rate hike asks the Public Service Commission to allow it to earn a more-than-healthy 10.3% maximum rate of return, plus make customers responsible for 100% of fuel cost overruns, instead of the current 80%.

The utility will probably justify a rate increase because it was forced to pay premium prices for coal and gas, but the commission will likely reduce it to provide some relief for consumers.

The committee knows it’s inaccurate to point its collective finger at renewable energy as the culprit, especially since the Legislature has done everything it can to force Rocky Mountain to keep operating coal-fired power plants at Wyoming ratepayers’ expense. That includes passing a law to require utilities to find a third-party buyer for aging coal-fired plants that are too costly and inefficient.

But it’s no surprise conservatives who claim to value free market enterprise above all else are happy to create economic winners and losers. Severance taxes on the coal industry have long paid state government’s bills, but coal has no chance to return to its past glory. Coal once comprised more than half of utility-scale electricity generation, but it’s dropped to less than 20%. Still, lawmakers won’t let go.

The Legislature has also mandated that before publicly regulated utilities can retire coal units, they are required to first analyze the cost of retrofitting them using carbon capture, use and sequestration technologies. That government mandate comes with an enormous price tag that (guess what!) gets passed along to the utilities’ customers.

But there are no carbon capture projects that have proven to be commercially viable in the U.S., and none on the horizon any time soon.

Meanwhile, the cost of wind and solar has significantly dropped. An analysis by Energy Innovation in 2019 found that 62% of coal plants were more expensive to operate compared to building new wind or solar projects in the same communities or regions. 

In January, a new report by the think tank said the figure is now 99%, with only one coal plant — Dry Fork Station near Gillette — that’s less expensive.

Local solar and wind projects benefit from the Inflation Reduction Act’s “energy community” tax credit bonuses, which help offset losses due to local siting constraints. Battery storage capacity can be financed with the savings from switching to local clean energy.

Energy Innovations projected a coal-to-clean energy transition is worth a total of $589 billion, mostly in red states like Wyoming. Rocky Mountain Power spokesman David Eskelsen said his company’s shift to more renewable sources of energy, plus federal production tax credits, has already saved Wyoming ratepayers an estimated $85.4 million.

Of course, such news only fuels renewable energy critics’ insistence that President Joe Biden’s administration is responsible for waging a so-called “war on coal”. For their survival, they can’t let that narrative change.

Lawmakers don’t want anyone — especially those who keep campaign donations flowing and re-electing them — to realize a transition from coal to clean energy will result in much better air quality, new construction jobs, retrained permanent workers and long-term sustainable tax revenue to replace what’s disappearing. They prey on the fears of coal communities, which are understandably nervous about the future.

“Regulators should require power plant owners and operators to re-evaluate their planning and procurement, now taking IRA programs into account, while prioritizing a smooth transition for workers and communities,” a Forbes analysis of the report advised.

That’s the last thing coal boosters want to see.

Scott and other legislators at the Joint Corporations panel’s hearing said they plan to draft a host of anti-renewable energy bills to be discussed at its Oct. 26-27 meeting in Cheyenne.

In addition to Scott’s proposed moratorium on wind and solar projects, several committee members suggested Wyoming should get even with states that only want to purchase clean energy.

“We have seen the coastal states dictating what we can do to generate power,” said Rep. Jeremy Haroldson (R-Wheatland), who noted utilities in coal-producing states are being forced to decommission power plants. “Is there a way that we can push back?”

Scott wants to make sure the Public Service Commission has the authority to ensure Wyoming ratepayers are not overcharged for the cost of decommissioning coal-fired power plants. He wants to amend a 2020 law that forces utilities to retrofit coal-fired power plants with carbon capture technology.

Who pays now? Rocky Mountain Power and Black Hills Power customers are burdened by what Scott calls a total $5.4 million “carbon capture compliance” surcharge. Of course they are.

Scott wants to shift the cost to utilities and their investors. He’s right about this one, but I’m anxious to hear the debate on the bill. The senator and others are swift to blame renewable energy for supposedly sticking it to ratepayers. But will they ever admit it was the GOP-controlled Legislature that shoved carbon capture down the throats of utilities at the expense of customers?

Even if they pass Scott’s amendment, I don’t think most lawmakers will show the level of honesty to cop to that egregious mistake.