Wyoming legislators who voted to impede utility companies’ ability to reduce rates for their customers — a business decision that dovetails with market demand and scales down greenhouse gas emissions — are on the wrong side of history.
That was made clear last Friday when PacifiCorp, the West’s largest grid operator, filed its final Integrated Resource Plan, which charts the company’s course through 2038. The plan is subject to review by regulators in six states, including Wyoming, but the big takeaway is that it would increase the use of wind, solar and battery storage while retiring coal-fired power plants at an accelerated rate.
Gov. Mark Gordon and lawmakers who are intent on propping up the coal industry view this development as a great blow to the state. There is no doubt it will greatly impact Kemmerer, Rock Springs and Glenrock, towns that depend heavily on current plant operations and mining to fuel their economies.
But it doesn’t have to be the death knell for those communities. If the state of Wyoming and PacifiCorp commit to an aggressive program to retrain the utility’s workers, the conversion to renewable energy will ultimately help the state remain competitive with the rest of the nation.
Unfortunately, the Legislature threw a monkey wrench into the works earlier this year when it passed Senate File 159 which requires all regulated utilities to make a “good faith” effort to find buyers for coal-fired plant units they plan to retire. In what would amount to a hostile takeover, the law would even force the current utility to buy electricity generated by the new owner. It will be up to the Wyoming Public Service Commission to determine what constitutes a good-faith effort to sell an existing coal-fired plant.
Sticking with coal rather than transitioning to much cheaper wind, solar and battery storage could threaten the estimated $248 million that PacifiCorp projects Wyoming ratepayers can save under the IRP over the next 20 years.
During the legislative session, I was surprised that PacifiCorp didn’t use a full-court press to lobby against the bill, but the utility has stressed it is banking on the likelihood that no other entity will be able to operate the plants cheaper than it can.
That may well be true, but it’s certainly not guaranteed. The new law is a short-sighted attempt to keep Wyoming hog-tied to fossil fuels that threatens consumers in the state and risks forcing utilities to find their electricity elsewhere.
I understand why the governor and the Legislature are intent on trying to wrest as much tax revenue as possible from the coal industry. This money pays for more than half of the cost of state government and, particularly in boom times, provides high-paying jobs.
But Wyoming’s historic boom-and-bust cycle continues to ravage the state’s economy whenever things turn south. The inability of legislators to create policies that encourage economic diversification has hampered Wyoming for decades, especially when it comes to creating jobs that will help keep its youth from leaving the state for greener pastures.
PacifiCorp’s new Integrated Resource Plan, which is updated every two years, is a boon to Wyoming’s efforts to cash-in on its abundant wind and solar energy potential. The plan adds 1,950 megawatts of wind power and 1,415 MW of solar by 2025. It also includes 354 MW of battery storage capacity between 2024 and 2038.
But many lawmakers refuse to embrace the potential of renewables. Instead of capitalizing on the job potential, some legislators are instead focused on discouraging development with highest-in-the-nation wind-energy taxes. Wyoming is the only state that imposes a tax on wind separate from other taxes.
In 2017, University of Wyoming energy expert Rob Godby predicted that raising the state’s $1-per-megawatt tax on wind generation could jeopardize an industry that has indicated it wants to invest up to $10 billion in Wyoming in the coming years. Seeing the state blow such a significant opportunity is my chief fear, too.
“The bottom line is there is a really huge amount of development and potential economic activity in the state, and potential tax revenue, that we could end up squandering if we price ourselves out of the market,” Godby told the Wyoming Tribune-Eagle.
While Wyoming’s seemingly endless supply of wind make certain parts of the state ideal for electricity producers, Godby also noted there are enough potential wind resources in New Mexico, Colorado and other places that the corporations may choose over Wyoming if the state maintains an unfriendly tax policy.
If Wyoming is going to fully capitalize on the tremendous potential of its renewable resources, officials here need to recognize the writing the on the energy-marketplace wall: once reliable customers of Wyoming energy have removed coal from their long-term energy portfolios.
Oregon passed legislation in 2016 that prohibits utilities from including coal plants in their rates beyond 2030. Washington state legislators just passed a law to transition to 100% clean energy by 2045. These are the realities Wyoming must prepare for.
Building transmission lines to help meet the demands of more renewable-energy-friendly states than Wyoming is also a large part of PacifiCorp’s agenda. The utility’s plan calls for constructing the Gateway South transmission project, a 400-mile transmission line running from southeastern Wyoming to northern Utah. A 140-mile Gateway West transmission line is already under construction in Wyoming.
Many Wyoming officials are wringing their hands over what they perceive as too much change, too soon. In fact, the shift has been in the works, and transparent, for a long time. That policy makers are now caught flat-footed is less the product of the pace of change and more result of years of willful denial and unwillingness to prepare. They ignored the harbingers for years much like they ignored the warnings of experts who forecasted the decline of coal production after fracking made cheaper natural gas available.
Meanwhile, more progressive states and environmental groups see PacifiCorp’s planned conversion of its coal-fired fleets to renewables — in 20 out of 24 plants by 2038 — as not moving fast enough.
Christopher Thomas of the Sierra Club’s Beyond Coal Campaign told the Oregonian newspaper that “it feels like PacifiCorp has backed off and is slow-walking some of the retirements.”
“We think there are some additional coal retirements that could be picked as part of a low-cost, low-polluting portfolio for ratepayers,” Thomas noted. “Unfortunately, we can’t know until we check their math.”
As it details in its final IRP, PacifiCorp has already made significant strides to combat climate change. Over the past 13 years it has become the largest regulated utility owner of wind power in the West. By next year it will have increased the percentage of zero-carbon energy resources in its portfolio by 70% since 2018, according to the IRP.
The company also claims it has saved customers more than $200 million since 2014 by reducing its carbon emissions by over 15 million tons. That’s the equivalent of removing 3 million cars from the road for a year, according to PacifiCorp.
Those accomplishments are nothing to sneeze at, but given the stated benefits, I agree with critics who contend that PacifiCorp should move even faster to make a smooth transition from coal to renewables. It can — and may — do so in future IRPs.
I also think Wyoming needs to facilitate the effort to reduce rates and decrease pollution emanating from smokestacks. It’s time for the state to stop impeding utilities from making essential changes by trying to force them through regulations to burn coal, or increase taxes on wind and solar power.
A little bit of forward thinking can raise Wyoming’s renewable profile and keep the state one of the nation’s top energy producers. It won’t kill us to get off the fossil fuels gravy train and join the rest of the country.