Lawmakers use power bill increase to target renewable energy
September 7, 2023
Fear and outrage about rising electric rates have set the stage for lawmakers to go after renewable energy and possibly throw up roadblocks to future wind and solar development in the state.
Rocky Mountain Power has testified and submitted data to show that volatile fossil fuel pricing - including a spike in December that boosted Wyoming's revenue outlook - is the primary driver behind its staggering 30% rate hike proposal.
But some lawmakers, and many of the utility's customers, say renewables are to blame.
Several members of the Joint Corporations, Elections and Political Subdivisions Committee have floated ideas for bill drafts they say are intended to address utility rate increases and factors driving them. The ideas include a one-year moratorium on new industrial-scale solar and wind facilities, and shielding Wyoming ratepayers from helping to pay for facilities in the state that primarily serve customers outside Wyoming.
Wyoming historically has exported more than half the electrical power that's generated in the state. And whether those exports are derived from coal, natural gas, solar or wind, it's a mainstay industry that benefits Wyoming's economy and - in particular - the state's budget, according to Kara Choquette, director of communications for Power Company of Wyoming, developer of the Sierra Madre, Chokecherry wind farm in Carbon County.
"Much like the Sinclair Refinery does right now - turning oil into refined products like biofuels and jet fuel - by selling that to outside markets, that brings revenue to the state and supports jobs in the state," Choquette said.
Though Co-Chairman Sen. Cale Case (R-Lander) expects several draft bills when the committee meets next in October, he said the panel has yet to officially take on a "policy direction" regarding rising utility rates. "The bill draft requests are simply a preliminary desire to analyze and discuss these issues further," Case told WyoFile.
However, the committee does plan to draft a resolution to express "concerns with the proposed increase, raising some specifics that we will need to agree on," Case said. The resolution, if approved by the committee, will be submitted to the Wyoming Public Service Commission - the independent body with authority over regulated monopoly utilities like Rocky Mountain Power.
Rocky Mountain Power has two rate increase requests pending before the Wyoming Public Service Commission.
The first is a general rate case to set "base rates" for the next several years. The utility says it needs to increase rates by an average of 21.6% to cover an extra annual $140.2 million in expenses necessary to serve its Wyoming customers.
The second is a temporary rate increase - an average of 7.6% - to recover $50.3 million of about $90 million in unexpected fuel cost and power purchase overruns in 2022 due to extreme weather events, according to its April filing with the state. That rate increase went into effect in July, but still needs final approval. It will sunset in July 2024.
Combining the two rate increases, the average household customer's monthly bill would increase by $19.94, according to the company's estimates. Both rate increases would be applied differently, depending on customer type. For example, businesses and large industrial customers are charged a higher percentage than the average household customer.
"The primary drivers of both the annual net power cost adjustment and the general rate increase request are the increased prices of natural gas and coal to fuel the company's power plants," utility spokesman David Eskelsen told WyoFile. "Plus increases in wholesale market power purchased by the company to help balance system demand."
The Public Service Commission will hold an evidentiary hearing on the general rate case beginning Oct. 25 in Cheyenne. That proceeding will continue over several days, according to the agency. The commission is scheduled to hold a similar hearing regarding the energy cost adjustment request on Dec. 19.
More about the proposed rate increases and how to comment is on the Wyoming Public Service Commission's webpage.
Prior to the official rate case hearings, the commission will hold several more public comment sessions around the state. The next public comment meeting will be at 5:30 p.m. Sept. 18 at Central Wyoming College in Riverton. More dates will be posted at this link.
Apart from the Rocky Mountain Power rate increases, Wyoming has seen five new major rate cases filed since the end of 2022, according to Wyoming Office of Consumer Advocate Administrator Anthony Ornelas. "In my time here, which is over a decade, that's really an unprecedented [number of rate case filings] for one year," he said.
In addition to burdening households, committee members said, the magnitude of Rocky Mountain Power's proposed rate increases is a particular threat to the state's trona, soda ash and oil and gas industries. Large industrial facilities consume approximately 70% of the electricity that the utility provides in the state.
Most committee members, as well as members of the public who spoke at Public Service Commission meetings in Casper and Rock Springs, suspect that policies favoring renewable sources of energy over fossil fuels are to blame for rising costs.
"We have seen the coastal states dictating what we can do to generate power," Rep. Jeremy Haroldson (R-Wheatland) said, adding that utilities are being forced to decommission coal-fired power plants. "Is there a way that we can help push back?"
One potential legislative effort committee members discussed would target the "multi-state protocol," which divides up facility costs among PacifiCorp's six-state operating region. PacifiCorp is the parent company of Rocky Mountain Power. Currently, the protocol assigns about 15% of those costs to Wyoming ratepayers.
The Corporations Committee will explore legislation to direct the Public Service Commission to prohibit charging Wyoming ratepayers for PacifiCorp facilities in the state - wind farms and interstate electric lines, for example - that primarily or entirely serve the utility's out-of-state customers. If such facilities do not benefit Wyoming ratepayers, "they should be excluded from being [part of Wyoming's 15%] as a divided up asset," Case said.
Committee member Sen. Charles Scott (R-Casper) said he'll draft several bills to address utility costs, including a one-year moratorium on yet-to-be-permitted industrial wind and solar energy projects that primarily serve customers outside Wyoming. "I think we're getting overloaded with the wind and the solar, at least in the Rocky Mountain Power energy mix," Scott said. "I think we're going to have to possibly do some radical things here."
Scott also wants to make certain the Public Service Commission has authority to ensure that Wyoming ratepayers are not over-charged for the cost of decommissioning large utility facilities such as coal-fired power plants, he said.
Scott will also draw up an amendment to strike a provision in the 2020 law, House Bill 200 – Reliable and dispatchable low-carbon energy standards, that allows utilities to impose a surcharge on Wyoming customers to comply with the mandate. As a result of the bill, Rocky Mountain Power and Black Hills Power customers in Wyoming now pay a "carbon capture compliance" surcharge which, combined, amounts to $5.4 million.
Utilities and private investors ought to cover costs to comply with the law, Scott said, which attempts to force utilities to retrofit coal-fired power plants in the state with carbon capture technologies.
Sen. Brian Boner (R-Douglas) said he wants to see a bill draft that would strengthen the Public Service Commission's authority to ensure electric service reliability, he said, citing complaints about frequent outages.
The Joint Corporations Committee's next meeting is scheduled for Oct. 26 and 27 in Cheyenne.
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