Two energy-related bills that would otherwise be regarded as foolproof in the Wyoming Legislature — even during a budget session — faced an inordinate amount of opposition from an unlikely foe: the most far-right faction of lawmakers. The opposition was mounted months before the session began when Sen. Cheri Steinmetz (R-Lingle) circulated a letter signed by 30 legislators issuing a challenge to Gov. Mark Gordon’s stated “net-zero” energy and climate goals that include encouraging, and in some cases backing with state resources, efforts to curb greenhouse gas emissions from fossil fuels.
The hard-line Freedom Caucus in the House, and their counterparts in the Senate, don’t object to the ultimate goal of helping to preserve Wyoming’s fossil fuel industries or expanding the potential for jobs and revenue from new energy investments. Instead, their objection, according to Steinmetz, is rooted in the falsehood that human-caused greenhouse gas emissions do not present a global climate emergency.
Over objections, Steinmetz, as chairwoman of the Senate Agriculture, State and Public Lands and Water Resources Committee, convened a February hearing during the budget session that featured speakers from the CO2 Coalition, which peddles climate misinformation.
The coalition speakers took direct aim at one of Gordon’s signature initiatives, House Bill 200 – Reliable and dispatchable low-carbon energy standards. Signed into law in 2020, the law requires regulated utilities to retrofit their coal-fueled power plants in the state with carbon capture technology. Conservation and ratepayer advocacy groups have long criticized the mandate for its estimated cost to Wyoming ratepayers — potentially $500 million to more than $1 billion for each of the five coal units subject to the law.
Steinmetz and many other lawmakers joined the chorus of critics regarding the estimated cost, but added that Wyoming shouldn’t care about the need to reduce greenhouse gas emissions. Their opposition jeopardized an effort to modify the 2020 mandate through Senate File 42 – Low-carbon reliable energy standards-amendments, which ultimately passed.
Steinmetz took aim at another key energy initiative at Gordon’s disposal. She proposed a budget amendment to sweep away an existing $155 million Energy Matching Funds program, as well as $75 million in infrastructure matching funds and a Joint Appropriations Committee proposal for a new $200 million Large Energy Projects matching funds initiative.
The programs are intended to leverage potentially billions in private and federal dollars to support energy innovation projects such as “direct air capture,” carbon sequestration, hydrogen energy and other low-emission initiatives. But giving the governor authority to spend those dollars threatens to diminish the Legislature’s spending authority, Steinmetz said.
“Do we want to be legislating and appropriating these funds or do we want the sole discretion of the governor to make these decisions for us?” Steinmetz said in support of the amendment. “I would like us to be involved in these decisions when we’re dealing with this amount of funding.”
Though the Senate narrowly adopted the amendment, House members successfully added the appropriations back into the final budget, except for funding the Large Energy Projects at half the proposed $200 million.
Despite the climate denial rhetoric, several advocacy groups welcomed skepticism of both the coal carbon capture mandate and the matching funds programs bestowed to the governor. The episode should be a “wake-up call” for Gordon and the Wyoming Energy Authority, which manages the Energy Matching Funds program, said Shannon Anderson, attorney for the Sheridan-based landowner advocacy group Powder River Basin Resource Council.
Both offices should “provide additional transparency and offer more robust public review and comment opportunities before awarding millions of taxpayer dollars,” Anderson told WyoFile via email. “Unfortunately, Wyoming does not have a great track record of supporting successful energy projects, and we need safeguards put in place to deal with company and technology failures, as well as to more judiciously decide where we are going to invest as a state.”
New goalposts for coal carbon capture
With the passage of SF 42, utilities now have three extra years to either retrofit their coal-fueled power plants with carbon capture or demonstrate to state regulatory authorities that doing so would be cost prohibitive for their captive Wyoming ratepayers.
The bill moves the implementation date from 2030 to 2033. It also lowers the minimum carbon dioxide capture standard from 90% to 75% of annual baseline emissions.
“It’s probably conceptually cheaper to do nothing. But I can also say, and it is my opinion, to do nothing will have a tremendous cost for Wyoming.”
RANDALL LUTHI, ENERGY POLICY ADVISOR TO GOV. MARK GORDON
Amendments to the 2020 mandate came largely in response to initial reports by utilities suggesting carbon capture for existing coal-fueled power plants isn’t quite ready for commercial deployment — at least in a regulated, monopolistic setting where state regulators must determine that costs passed on to customers are “just and reasonable.”
As for the astronomical cost estimates — billions of dollars — proponents of the mandate, and SF 42 to modify it, claimed that utility companies have not fully taken into account recently expanded federal tax credits for capturing carbon dioxide, nor the potential revenue from selling the greenhouse gas for “enhanced oil recovery” and the revenues from that oil production.
Senate File 42 attempts to take all of those considerations into account, said Gordon’s energy policy advisor Randall Luthi.
“It’s probably conceptually cheaper to do nothing,” Luthi told members of the House Minerals Committee earlier this month. “But I can also say, and it is my opinion, to do nothing will have a tremendous cost for Wyoming, because [doing] ‘nothing’ means we’re going to continue to shift from our fossil fuel units to renewables” that employ fewer people and only provide intermittent power.
Luthi also championed language in both the 2020 and 2024 bills noting that utilities subject to the mandate may offload the carbon capture side of the business at a coal power plant to a third party, which would remove the financial pros and cons from the utility and its ratepayers.
But there’s no guarantee that will happen. For now, and underscored by new language in SF 42, captive ratepayers in Wyoming are on the hook for not only the billions of dollars of retrofitting the coal-power units, but also the cost of mandated studies to analyze the potential. The only limiting factor for Wyoming ratepayers to date is a 2% cap “of each customer’s total electric bill” for costs incurred to meet the state’s mandate to study and potentially implement carbon capture retrofits.
In other words, it’s not a 2% cap on total costs; utilities may only recover 2% at a time from its Wyoming ratepayers, whether that’s a pass-on cost for a few years, or possibly decades.
The Office of Consumer Advocate has been skeptical of the mandate, but liked some of the reforms in SF 42, such as an exemption for utilities with fewer than 10,000 customers — that reduces the number of coal-fired units subject to the law from five to four.
More oversight of utility investments
The Legislature also passed five of six committee-sponsored bills that add authorities and directives to the Public Service Commission to more closely scrutinize electric utility investments that can be passed on to their Wyoming ratepayers.
The measures, which mostly had broad political support, were crafted by the Joint Corporations, Elections and Political Subdivisions Committee last fall in response to Rocky Mountain Power’s proposal for a historic rate increase.
However, several aspects of the legislation received pushback for duplicating existing authorities and protocols and because they generally assume that shifting from coal-based power generation to renewables is a threat to both electric reliability and ratepayers’ pocketbooks.
Nonetheless, measures that made it across the finish line, such as Senate File 20 – Electricity rates for costs that do not benefit Wyoming and Senate File 24 – Public service commission-integrated resource plans, should provide more analysis to help state regulatory officials determine whether utility investments are “just and reasonable” to pass on to ratepayers — whether they are renewables or fossil fuel-based costs.
This article was originally published by WyoFile and is republished here with permission. WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.
