(Ben Sutherland/FlickrCC)

This time they’ve really drunk the Coal-Aid.

House Bill 200 and Senate File 125 could be the most inane pair of bills ever concocted by Wyoming legislators. If passed and signed, they will override in-state market forces, place a hidden tax on Wyoming ratepayers, and transfer these tax proceeds not to public purposes but to private mining and utility shareholders and executives. But they won’t slow the decline of our coal industry or affect the commodity prices of our other fossil fuel resources. Welcome to America’s first Democratic Socialist state.

The bills propose to define the market for electricity in Wyoming by legislating strict supply-side rules. Like Cold War Soviet bureaucrats concocting a five-year plan, they set up a production structure, and require customers to pay whatever it takes to cover the costs of that jury-rigged structure. And since the commodity involved — electricity — is a necessity of modern life, customers like you and I and our businesses, schools and industries have no choice but to pay those costs. What we have here is a forced transfer of wealth from the many to the few — an override of the market forces that should undergird any functional capitalist economy.

House Bill 200 is called “Reliable and dispatchable low-carbon energy standards.” It could more honestly be titled “Chasing unicorns, charging ratepayers and pocketing the change.” Stated simply, the bill would force Wyoming’s utility regulator (the Wyoming Public Service Commission) to establish a “portfolio standard” requiring electric utilities to “maximize the use of” expensive and risky “carbon capture, utilization and storage” technologies. These technologies are still unproven at a commercial level and still uneconomic, but what the hell. The bill would also require utilities to effectively minimize the use of wind or solar generation. And it would allow the utilities to make ratepayers pay for all these expensive coal plant accessories. But the bill’s sponsors are not totally heartless. They have capped this rate recovery at “one billion dollars ($1,000,000,000.00)” per utility. Feel better?

Adding insult to injury, HB200 allows any profit from sale or use of captured carbon dioxide to be kept by the utility’s shareholders, rather than being credited back to the customers who paid for the carbon capturing technology.

Senate File 125 is called “Electricity production standard.” A more honest title would be “Prohibition of renewable energy.” This bill requires that electric utilities procure electricity only from “eligible generating resources.” Neither wind nor solar — which are already cheaper for customers — is an “eligible resource,” though. If a utility sells power from ineligible generating resources such as wind turbines or solar panels, the utility will be fined $10/megawatt hour (1¢/kilowatt hour), even though the customer might enjoy a lower rate. But this one cent per kWh fine cannot be charged to the customer. It must be paid by the utility shareholders. In other words, no regulated utility would ever rationally deliver wind or solar generated power to a customer, no matter how cheap the power would be for the customer, because the utility would be selling at a loss.

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Let’s try to imagine the public purpose behind these bills.

First, they would save our coal industry. Wrong. Wyoming’s coal is a commodity, priced by supply and demand principles in a very broad market. Most Wyoming thermal coal leaves the state by rail, and only 40% of the electricity generated in state is used in Wyoming. Our Legislature can pass all the bills it wants forcing Wyoming industry, commerce and households to use coal-fired power, but they can’t force anyone to use it outside our borders. Legislation does not create markets.

Second, these bills will force Wyoming utilities to lead the way to a national move to carbon capture, storage and utilization technology. Wrong. CCSU technology has been proven again and again around the world to be uneconomic, producing electricity that is more expensive than that from gas-fired generation and now even costlier than wind and solar power. Sentencing Wyoming’s few consumers to subsidize this crusade is almost certainly sending good money after bad.

Third, the bills would eliminate competition for power generation from wind and solar projects. This one is true, but are we into masochism? They would impose a big cost penalty on ourselves and our businesses and industry. They would essentially island Wyoming power consumers from access to cheaper power and prevent utilities like Rocky Mountain Power from minimizing rates through rational integrated resource planning. 

Worst of all, these bills would provide just another distraction as we continue to whistle past the graveyard, averting our attention from planning for our inevitable future — a new lower-carbon economy that is coming whether we like it or not.

Bob LeResche

Bob LeResche is a former Commissioner of Natural Resources of Alaska, energy executive and investment banker. He and his wife Carol own a ranch and heirloom vegetable farm near Clearmont, Wyoming. He is...

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  1. This article is a bundle of contradictions. Far from having anything to do with democratic socialism, it is actually a story of abusive capitalism.

    WyoFile also used a graphic to associate democratic socialism with Stalinist Russia. Wrong on both counts. State control is not democratic, and Stalin’s Russia is nothing like what American socialists are proposing.

    WyoFile could have easily reached out for a reality check. Wyoming has a Democratic Socialists of America chapter (SE Wyoming DSA), and a podcast of socialists regularly producing material on human rights and the economy in Wyoming (Solidarity Wyoming). You also have a US Senate candidate who is socialist (me). All easily findable.

    The thing is, the analysis in the article itself isn’t bad, but it is irresponsible mis-attribution. LeResche says, “Sentencing Wyoming’s few consumers to subsidize this crusade is almost certainly sending good money after bad.” And that is absolutely true… but this is what capitalism requires to make profits for the few. Billionaires don’t become billionaires under socialism, they become billionaires because this is the kind of thing they can do as capitalists.

    Let me break this down. Do the workers of this company own and run the company? No? Not democratic OR socialist. Are the profits from this thing shared with either the workers or back to the consumers? No? Not socialist. Is this company owned by a public entity where the profits go back into public funds for public benefit? No? Not socialist. (In fact, if LeResche understood socialism, as soon as he typed the word “shareholders” he would have known this ain’t it. But I digress.)

    Any one of those three could be legitimately called a version of socialism, but this is none of those. This is plain old abusive capitalism, taking money from people who probably can’t afford it to fund a project that will ultimately create more profit for the owning class. Horrifying business practice? Damn right. But definitely NOT socialism.

    You know what is “forced transfer of wealth from the many to the few”? Billionaires and huge meg-corps like Wyoming’s largest employer, Walmart, paying no taxes while using public infrastructure to make their money. You live with it every day.

    I encourage you to invite a socailist to dinner. Maybe we can help you break the grip of thinking that kind of abuse-by-capitalism is normal and OK.

  2. Republican Socialists, Bob . REPUBLICAN Socialists.

    We need to invite the mainstream media to visit Wyoming and report on what Republican socialism looks like. They are so concerned about Bernie’s Democratic Socialism that they forgot about the elephant in the room , in Cheyenne Wyoming of all places… Trump Country. Red state. GOP firmly in control here .

    1. Not sure what you mean by government-mandated utilities, but I believe that you will find that most rural areas in California are served by private utilities, like Pacific Gas and Electric Company (PG&E) in the northern part of the state and Southern California Edison along with San Diego Gas and Electric in the south).

      In fact, about three-quarters of the CA electrical supply is supplied by privately owned suppliers. CA has a state Public Utilities Commission, much like in Wyoming, but it has become sold out over the years and essentially rubber stamps whatever the private utilities dictate. As I recall, several of the major fires in recent years in the north, were traced to downed power lines, owned by PG&E.

      One of the best suppliers of electricity (my opinion) in the country is the Sacramento Municipal Utility District that serves Sacramento County, a publicly owned utility.

  3. From Merriam/Webster dictionary:
    so·​cial·​ism | \ ˈsō-shə-ˌli-zəm

    Definition of socialism
    1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.

    Hmm…..now I’m really confused.

  4. So the “anti-tax” brigade in the legislature are totally cool with taxes all of a sudden and decided to propose the worst, most inefficient, arbitrary, pointless, and destructive tax that could be imagined up that not only doesn’t even acknowledge the basic problem it will supposedly fix, but also creates literal tons of new problems? What on earth…

    I have seen plenty of silly, horribly designed, dumb ideas come out of the legislature over the years. But I’m not sure this one can be surpassed in its stupidity. At least not until the next budget session I suppose…

  5. If these bills pass the next step will be to outlaw individual homes producing there own electricity through solar panels or home generators. Remember when Republicans used to be against government interference in free markets?

    1. Jim:

      I don’t remember when Republicans were against government interference in free markets, except as a slogan. Republicans, & all parties, have manipulated free markets since inception. We have never had a free market, ever. Never.

      Don’t we always pick winners and loser with tax policy, land use policies, regulations, incentives, trade policy, grants, loans, laws, patents, copyrights, access to justice, etc? Don’t we always interfere in free markets?

      Is this Bernie Sanders Socialism from Wyoming’s delegation? Or, something else?

      I would say it’s a Hail Mary pass that’s really about throwing the ball into oblivion so as to not get the quarterback sacked, injured, or lost yardage. It’s going nowhere.

      1) Bills would eliminate competition
      2) Impose a big cost penalty & cost-prohibition of selective resources
      3) Create markets through legislation.

      Yep, sounds silly as it plays out in this bill.

      No excuses for this bill, but….

      “Bob LeResche is a Board Member of the Powder River Basin Resource Council. He is a former Commissioner of Natural Resources of Alaska, energy executive and investment banker. He and his wife Carol own a ranch and organic heirloom vegetable farm near Clearmont, Wyoming.”

      Energy Executive, Investment Banker, Rancher & Farmer????

      Don’t we subsidize renewable energy? Didn’t we bail out investment bankers? Don’t we subsidize & constantly bail out the ranchers & farmers?

      Bob LeResche’s kettle calling coal black?

      Just a thought.

  6. Inexpensive electric power is one of the few incentives Wyoming can offer in attracting new industries and, in turn, become more economic diverse. The state has spent too much time and money on ENDOW and other programs to diversity the economy to back step with these short sighted ideas.

  7. Too bad we didn’t have the Legislature looking out for the Wyoming economy back when the fur trade collapsed. We could have commanded those London dandies to keep buying beaver-felt hats and refused to let anyone in Wyoming buy hats made of anything else.