Welcome to America’s first democratic socialist state

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.