Coal or Free-Market Conservatism? Lawmakers Choose Coal.
By Kerry Drake
September 3, 2019 - Until earlier this year, it was unthinkable that Wyoming lawmakers would tell a private business that it couldn’t shut down an unprofitable portion of its enterprise or look for cheaper ways to run its operation.
That type of clumsy government meddling in free-market affairs is the antithesis of conservative economic theory and an almost cartoonish example of what right-wing politicians mean when they chant their mantra: “government has no place picking winners and losers.”
But that’s exactly what they did to prop up the state’s dying coal industry. Who knew there were so many socialists in the Wyoming Legislature?
Senate File 159, New opportunities for Wyoming coal fired generation — which was overwhelmingly approved by both the Senate and House and signed into law by Gov. Mark Gordon in March — prohibits companies from closing coal-fired power plants in the state without first making a “good faith effort” to find buyers who will continue operations.
The state apparently expects buyers to line up in droves for the opportunity to purchase unprofitable power plants and run them until the end of the facilities’ “natural useful life.” How unrealistic can Wyoming get? To create an incentive, the law forces the utilities that just unloaded the properties to buy electricity from them at whatever rates the new company chooses.
Wyoming consumers would, of course, be stuck paying higher rates should such a fantastical sale ever take place, and we’d manage to keep marching in the opposite direction of combating climate change, despite the market’s obvious desire to address the dire threat.
Meanwhile, the original plant operators will be able to escape the costs of cleaning up their properties if the new owners eventually go belly up and close the plants anyway. The state will then be on the hook for reclamation costs — again, government doing the work of the private sector. Comrade Lenin would be so proud.
The bill, sponsored by Sen. Dan Dockstader (R-Afton), was in response to PacifiCorp’s proposal to shutter several coal-fired power plants and replace them with cleaner and much less expensive natural gas, wind and solar energy, paired with energy storage. The company’s Naughton plant employs about 600 workers in Kemmerer, which is in Dockstader’s district.
The new law may be a temporary win for small towns that host coal plants, but it’s a lose-lose proposition for everybody else.
PacifiCorp estimated it could save customers $248 million over the next two decades by closing its most costly coal plants by 2022 and converting them to renewable energy and natural gas. An analysis by the investment firm Lazard Ltd. determined coal costs more than twice as much as wind power.
I fully understand the motivation of Dockstader and other legislators who want to protect Wyoming jobs. But the law they’ve passed is an ill-suited and short-term band-aid. What Wyoming and its workers need is a full-on industrial transplant.
And to guide it, the Equality State needs forward-looking leaders like the state legislators in New Mexico, who are moving ahead on energy in ways that will positively impact climate change and create long-term employment. The state has joined Hawaii, California, Washington, D.C. and Puerto Rico in establishing a goal of totally clean energy.
The Land of Enchantment has set its targets at 80% renewables by 2040 and 100% carbon-free by 2045.
Yes, New Mexico will lose mining jobs, but it was going to anyway, just as Wyoming is. Instead of trying to deny that market-driven truth with misguided big-brother government intervention, it is mitigating the situation by providing each closing coal plant and mine up to $20 million for severance and worker training. The state also created a $15 million assistance fund for displaced workers and set aside $30 million for plant decommissioning and mine reclamation costs. In other words, it’s helping its private energy sector invest in the future instead of requiring it to cling to the past.
Wyoming, probably adjusting those dollar amounts upward due to the large number of coal-related operations here, could do the same.
Ryan Austin, on the website Earthtechling.com, succinctly summed up the major weaknesses behind Wyoming’s attitude on energy. “Regardless of political leanings or environmental views, it seems that the free market is simply pushing coal out,” he wrote. “… Instead of hanging on to a dying industry, [Wyoming leaders’] time might be better spent helping develop new industries and creating training programs for new job skills.”
In case there’s any doubt whose interests lawmakers are looking out for, this year the Legislature even refused to address the failure of the mineral industry to pay its taxes to cash-strapped counties on a monthly basis.
“We see these companies continuing to walk away from their responsibilities and file bankruptcies, and then ‘reinvent’ themselves,” Jill Morrison, executive director of the Powder River Basin Resource Council, recently told me. The Legislature, she said, “passed SF 159 to save old coal plants, which will cost Wyoming ratepayers more money.”
Rather than trying to force unprofitable coal plants to prolong their lives when the market dictates they should be converted to other resources, there’s a much better way for state legislators to protect coal industry employees and local economies.
Wyoming could pass legislation to keep the industry from giving workers the shaft when coal mine owners declare bankruptcy. Make companies honor their pension and health benefit obligations.
Last week the 600 unemployed workers at Blackjewel LLC’s Eagle Butte and Belle Ayr mines learned that they would lose their company health insurance at the end of August. The former miners will be unable to continue their coverage under COBRA and were only given a few days to sign up for insurance plans through the Affordable Care Act’s health marketplace.
It’s time to look at the big picture to improve Wyoming’s economy and create more stable job markets and educational opportunities.
A strong Wyoming economy starts with having a quality labor force that is prepared to meet the needs of 21st century industries and businesses. Public education is essential to meet that goal, and the state has a constitutional obligation to ensure every child has free, equitable educational opportunities.
As the world outside Wyoming becomes increasingly paved over and polluted, Wyoming retains great expanses of untouched earth and incredible populations of wildlife. These unspoiled public lands assets have forever been central to Wyoming’s culture, and they are key to our economic future.
Healthy public lands and abundant wildlife contribute to a quality of life that can help attract and retain talented people to develop new industries in Wyoming. But that can’t happen if our state remains hooked on mineral revenues and allows energy development to run roughshod over the environment.
New laws that obstruct natural market-driven evolution do nothing to improve the future lives of Wyoming residents. They serve only to remind the rest of the nation that our state remains stuck in the past.
Far from staying economically healthy, the communities that the state says can’t benefit from new technologies are likely to become ghost towns. In the case of SF159, the state is effectively telling us that we must collectively be anchored to a sinking ship.