If you pay an electricity bill in Wyoming, you’ve likely seen multiple unwelcome price spikes in recent years, and may well have noticed a persistent upward creep in associated fees.
The drivers are varied: Extreme weather, volatility in the fossil fuel markets, big facility investments, laws aimed at protecting the state’s critical but ailing coal industry and other factors have all contributed to the cost increases.
Proposed solutions have been similarly diverse. There is one unifying theme, however: Nearly every elected official and ratepayer in Wyoming believes the status quo is problematic and in need of a fix.
But what can state lawmakers actually do to ensure service reliability and help keep rates affordable? There’s plenty to watch for in the upcoming legislative session.
The Joint Corporations, Elections and Political Subdivisions Committee crafted a package of six measures — many of them in response to Rocky Mountain Power’s historic rate hike proposal last year. Several of the measures specifically address the nuances of costs incurred by multi-state utilities and how those costs are distributed among the different states.
All six draft bills are set for introduction in the Senate where each will require a two-thirds vote for further consideration — the threshold for non-budget bills during a budget session.
Here’s what to watch for and who will likely be the most involved:
Senate File 20 – Electricity rates for costs that do not benefit Wyoming would direct the Wyoming Public Service Commission to conduct a cost-benefit analysis of multi-state, systemwide facilities to determine how much a power facility — such as a wind farm or power transmission line — actually benefits ratepayers in Wyoming vs. customers elsewhere.
For example, several members of the Joint Corporations Committee, including Co-chairman Sen. Cale Case (R-Lander), have questioned the cost apportioned to Wyoming ratepayers for PacifiCorp’s Gateway West and Gateway South interstate transmissions lines. (PacifiCorp is the parent company of Rocky Mountain Power.) Both lines originate in Wyoming, but their primary function is to send Wyoming-generated electricity to customers in other states.
Senate File 21 – Public utilities-net power cost sharing ratio drives at another issue that was hotly debated in Rocky Mountain Power’s recent rate case.
Utilities typically estimate future costs for things such as fuel — coal and natural gas — and electricity purchased from other power companies. If those costs come in lower than anticipated, ratepayers typically get a rebate. If the costs come in higher, the utility is allowed to tap ratepayers to cover a portion of that cost.
That cost-equalizing practice is typically applied according to a ratio; if fuel costs come in at $100 million over estimates, for example, the utility might tap its ratepayers for 80% while it covers the remaining 20%.
Last year, Rocky Mountain Power proposed shifting its cost-share ratio from 20/80 to 0/100, setting up its Wyoming ratepayers to either reap the entire benefit or pay the total cost of the price difference. Critics, including several parties that intervened in the case, said that’s too much risk for Wyoming electricity customers, especially considering the volatility of fossil fuel markets.
The Public Service Commission denied Rocky Mountain Power’s request and instead maintained the company’s 20/80 ratio. Senate File 21 would disallow the commission from granting a 0/100 cost-sharing ratio in the future thus requiring the utility to bear some portion of the benefit or debt.
Senate File 22 – Public service commission-electricity reliability would direct the Public Service Commission to establish standards for “adequate, dispatchable and reliable” electric generation and to impose penalties for outages and substandard service. Electric reliability is a growing concern among Wyoming officials, in part because of the intermittent availability of solar and wind-generated power and because many believe requiring a certain definition of reliability will de facto require the continued use of coal plants.
Some critics, however, say the measure merely duplicates existing commission responsibilities.
Senate File 23 – Public utilities-energy resource procurement is inspired by laws already in place in Utah and Oregon. The bill would require an independent, third-party evaluation to judge whether a utility’s “requests for proposal” faithfully solicit a full range of technology options for new power generation facilities. The idea didn’t inspire opposition during the Joint Corporations Committee’s interim discussions.
Senate File 24 – Public service commission-integrated resource plans would direct state regulators to more closely review a utility’s long-range planning and provide guidance for how the utility can better meet Wyoming’s needs and comply with its policies.
The draft comes at the request of the Wyoming Industrial Energy Consumers group, which scrutinized Rocky Mountain Power’s recent rate hike proposal. Large utilities typically publish what’s called an “integrated resource plan” — a blueprint of sorts for how it will provide services for the next 10 years or so. PacifiCorp’s recent IRP updates, for example, have laid out plans to accelerate its shift from fossil fuels in favor of adding more renewable sources of energy and battery storage.
“With government regulation, it’s always important to make sure that when we’re trying to solve problems, we aren’t making things worse.”REP. MIKE YIN (D-JACKSON)
But those in-house utility plans tend to drive investments before state regulators have an opportunity to scrutinize them. In addition to the Wyoming Industrial Energy Consumers group, the measure has support from the Sheridan-based landowners advocacy group Powder River Basin Resource Council.
Another draft bill, Senate File 25 – Reclamation and decommissioning cost, would direct the Public Service Commission to hire a third party to study the cost of closing and remediating power plants. The bill includes a $500,000 appropriation from the state’s General Fund.
This measure also duplicates the commission’s existing responsibilities and practices, PRBRC attorney Shannon Anderson said. The Industrial Energy Consumers group, however, hasn’t opposed the bill so far.
The Joint Minerals, Business and Economic Development Committee also queued up a draft bill in the interim that’s integral to electric rates in Wyoming.
Senate File 42 – Low-carbon reliable energy standards-amendments would modify Wyoming’s controversial coal carbon-capture mandate that was passed into law in 2020.
The measure would push back the deadline to install coal plant carbon-capture retrofits from 2030 to 2038, and change the minimum standard of capturing 90% of the greenhouse gas that would otherwise be emitted into the atmosphere to 75%. The bill would also exempt regulated utilities with fewer than 10,000 customers.
The measure is in response to initial reports from coal-plant operators in the state that suggest retrofitting coal plants with carbon capture may be expensive — an estimated $500 million to $1 billion for a single coal-burning unit. Proponents of the bill say that pushing back the deadline for the mandate, and lowering the carbon capture threshold, should help lower the cost of actually implementing the policy, and thus the cost to ratepayers.
Broad, tentative support
Several stakeholders involved in the recent Rocky Mountain Power rate case say the package of bills, with some exceptions, will better empower state regulators to scrutinize costs that utilities try to pass on to ratepayers.
Lawmakers are wise to take aim at how multi-state utilities divvy up costs among customers in different states with diverse energy policies, said Abby Briggerman, a Holland and Hart attorney who represents the Wyoming Industrial Energy Consumers group. Rocky Mountain Power, she noted, operates in Wyoming and five other western states. That presents a difficult challenge for the utility, but it doesn’t preclude Wyoming from declining some costs and investments that are driven by other states’ policies.
“It is necessary to determine what portion of these costs should be allocated to customers in each state,” Briggerman told WyoFile via email.
Both the industrial group and the PRBRC support SF 24 as well as a general push by lawmakers for the Public Service Commission to be more involved in PacifiCorp’s “multi-state protocol” — a group of stakeholders from each state in which PacifiCorp operates.
“The devil is always in the detail of how that actually gets implemented in practice,” Anderson told WyoFile.
The measures also aim to empower state regulators to be more proactive as PacifiCorp wrestles with how to divvy up decommission costs for coal plants in other states and how to fairly apportion investments in renewable energy throughout its six-state system.
“It’s something that parties across the PacifiCorp system have been grappling with — the question of [PacifiCorp] having to comply with Oregon’s law, but at the same time not harm customers in states like Wyoming and Utah,” Anderson said.
Whatever new authorities and directives the Legislature gives to the Public Service Commission, it’s critical they don’t have any unintended burdens on Wyoming ratepayers, Rep. Mike Yin (D-Jackson) said.
“With government regulation, it’s always important to make sure that when we’re trying to solve problems, we aren’t making things worse,” he told WyoFile.