Perceiving War on Coal, Wyoming House Members Propose Their Own Moratorium in the Fight
By Brendan LaChance
February 2, 2021 - When it comes to a push toward renewable energy in west coast states or federal oil, natural gas and coal development policies, there is no shortage of “war” metaphors coming from the mouths of Wyoming’s elected officials.
When Governor Mark Gordon and Wyoming’s U.S. Congressional delegation have raised the alarm about the Biden administration’s moratorium on new mining and drilling permits on federal lands, they’ve tended to describe the policies as an “assault” on the state’s oil and gas industry.
When members of the Wyoming Legislature speak about the State of Washington’s block of a proposed export terminal, they see it as an “attack” on the state’s coal industry.
Cowboy State political language around the topic of energy abounds in analogies to war, and some elected officials see the state as being squeezed in a war on multiple fronts.
“The war on gas and oil is just starting so we better get ready,” House District 37 Rep. Steve Harshman said during the House’s virtual floor session on Monday, Feb. 1. “The war on cattle, grazing…it is coming.”
“We’ve got to make sure we got all our ducks in a row and keep fighting.”
With legislators perceiving lines drawn in this “war” on the state’s energy sector, the question becomes establishing a strategy to fight back.
Monday’s House floor session debate about House Bill 30 centered around House District 57 Rep. Chuck Gray’s proposed strategy to create a moratorium on closures of coal-fired power plants.
Gray switched to another common political metaphor in urging support for his strategy — the football gridiron. He argued that other states have been playing unfairly in a push toward renewables and away from coal but that Wyoming is losing the game.
“I really think that the score has been run up,” he said. “Maybe it is 24-0, not 21-0, but they have had 12 players on the field every possession. And then we get the ball back and they call a penalty every time we put 12 players on the field and I’m getting tired of it.”
“We need to take a stand at some point….do what these other states have done to put us in this position.”
Gray said he thinks there has been an attitude of defeatism in Wyoming in which officials bemoan the “assault” on the state’s coal, but resign themselves to 3-4 yard runs when what the state should be trying is bolder long passes.
“Defeatism is really hurting our state,” he said. “We are just going to say, ‘We can’t do this, we can’t do that.’ That was not the attitude of California or Oregon when they set renewable energy standards.”
“We’ve got to get out of this attitude of defeatism where we say, ‘We can’t do this, we can’t do that.'”
While a number of legislators expressed support for Gray’s intentions to defend Wyoming coal, some said that the particular strategy he was attempting to attach to House Bill 30 wasn’t the right approach.
The proposed legislation aims to ensure the Wyoming Public Service Commission (PSC) has enough funding to operate and regulate public utilities in the state. The PSC is charged with ensuring that “public utilities operating in Wyoming provide safe and reliable service to customers at just and reasonable rates.”
House Bill 30 looks to allow the commission to assess public utilities at an additional rate needed to operate without slashing positions from the agency. Current state statute sets a maximum rate at which the PSC can assess utilities operating in Wyoming.
The proposed legislation would allow the PSC to assess an additional 0.1% (of the total value of “aggregate gross retail Wyoming intrastate operating revenues” of utilities operating in the state) in order to ensure the PSC has the ability to meet its budgetary needs.
Gray’s proposed an amendment on third reading would prevent the PSC from collecting the additional assessment unless they have enacted “a moratorium on the approval of any public utility’s action to retire a coal fired electric generation facility.”
Under Gray’s amendment, the PSC would need to keep a moratorium on coal plant retirements in place through July 1, 2035.
House Majority Floor Leader Albert Sommers argued against the amendment. He expressed concerns that the amendment could create a bias in the state against natural gas since some coal fired plants have been converted to natural gas plants.
“I feel this is the wrong amendment at the wrong time,” he said.
House District 31 Rep. John Bear, however, argued that the federal government “has made it clear they prefer natural gas over coal” and that coal is therefore the resource the legislature should work hardest to protect.
“This state is going to have very, very few places to sell our coal,” Bear said. “We’ve had something called the war on coal…which has given a dark name to this product.”
House District 43 Rep. Dan Zwonitzer said his first concern with the proposed amendment was that the moratorium on allowing coal plants to be retired lasting through 2035 was too far into the future.
“My main concern is the date of 2035,” he said. “I just think it is too long out.”
Zwonitzer said the amendment could create another problem since it doesn’t limit the moratorium policy to utilities operating in Wyoming. Since utilities like Rocky Mountain Power and Black Hills Energy operate in multiple states, he asked whether the PSC’s ability to collect the additional assessment could be stopped based on a coal fired power plant being shut down in another state.
House District 48 Rep. Clark Stith said that he supported Gray’s amendment, but said that the legislature should be clear that it could result in higher utility rates being passed on to consumers.
“The implications of this amendment would mean higher electric utility rates in part because we export 85% of our coal fired electricity production,” Stith said. “If other states don’t buy [electricity generated at coal fired plants] and we’re saying that you have to keep running this thing, we’re going to have to pick up the cost.”
House District 22 Rep. Jim Roscoe said he was against the amendment and expressed concerns about such a policy resulting in higher utility rates for consumers.
House District 08 Rep. Bob Nicholas said he was against the proposed amendment since it could result in the PSC having to eliminated employees “just to make a balanced budget.”
He also expressed concerns that the amendment would create a policy which would look to force utilities to keep operating coal fired plants even if the market economics of coal simply aren’t cost-effective.
“This amendment basically says we don’t care how much it costs you to operate,” Nicholas said. He said it was unlike legislation passed in 2018 which required utilities to put coal plants on the public market anytime they are set to shut down.
Nicholas said that effort was to ensure that if a coal plant could be competitively operated, a company could purchase the utility and operate it if a large utility was shutting down the plant not for economic reasons but due to other policies or “agendas” against utilizing coal plants.
He said that House Bill 30 was intended to address the question of funding the PSC which Nicholas said was not directly related to the question of whether a power plant should be closed or not.
“The job of the PSC is to provide safe, reliable energy to the people of Wyoming at the lowest cost possible…..this amendment would say no matter the cost, we want to keep coal plants,” he said.
Nicholas said the legislature could take action to protect coal fired power plants, but that it shouldn’t be done inside of House Bill 30.
House District 51 Rep. Cyrus Western said that he appreciates Gray’s intent with the amendment, but that it could have the opposite effect of that intention.
“Ss i see it, this amendment is something that is supposed to help the coal industry,” Western said. “I think this amendment might be a little ham-handed in doing that.”
“Strong-arming the commission to strong-arm these power generators [into keeping coal plants active], I just don’t know if that is the best way to go about helping the industry.”
Western said he thinks a better approach would be to continue lobbying other states about coal to persuade them the resource has a role to play into the future.
Harshman said: “The war on coal, it is a bunch of crap.”
“We could clean the earth’s environment by shipping our coal to Asia,” he said. “We all know that. we’ve been fighting for it for years.”
He said that Wyoming’s coal industry developed due to the Clean Air Act which “shut down eastern [U.S] coal.” Harshman said that coal has been a reliable revenue source for the state and that he thinks legislators are in agreement that they want to send a message to defend the industry.
“Is this the right mechanism?” he asked. “This is the right message.”
Harshman said that about 8% of coal is used in Wyoming and that the rest is shipped elsewhere “a lot to the Midwestern grid where we’re not connected in.”
He said that the Public Service Commission only has full regulatory oversight of Rocky Mountain Power and Black Hills Energy and that other utilities in the state would not be impacted by a PSC moratorium on coal plant closures.
Harshman said the amendment, while well intentioned, was not the right approach to supporting Wyoming’s coal industry.
“What’s the best way to do this?” he asked. “Is it to not fund PSC? I think that’s bad for business. I think that’s bad for coal companies. I think it is bad for oil and gas and it is certainly bad for the average person in Wyoming who is going to pay higher electric rates. We want the PSC to regulate these large, huge corporations that have a monopoly in our state.”
Harshman said he thought Gray’s amendment wouldn’t work and that it “violates due process” and “goes against basic utility law.”
House District 32 Rep. Tim Hallinan said that he supported the amendment and the the legislature should use it as an opportunity to send a message about their support for coal.
“I think that this is the only bill that I know that we can take a position here in this session,” he said. “Our position is that coal has a future in Wyoming and the United States. I don’t know for sure that this [amendment] is the most viable method of doing something, but I think it is something we can do now.”
House District 58 Rep. Pat Sweeney said that he appreciated the House’s discussion and that he was against the proposed amendment.
“I don’t think anybody is against coal,” he said. “I certainly am not. We want to do everything we can to protect [Wyoming’s coal industry]. I don’t see this amendment as the vehicle.”
Sweeney said he thinks the moratorium could turn Wyoming into “an island” since other states do not have such moratoriums on closing coal plants in place.
He added that Wyoming rate-payers “would pick up the tab” of keeping coal plants operating when other state’s rate-payers “have already said we don’t want that [coal] power. I worry about creating that island effect where our rate-payers may end up paying double, triple, quadruple.”
House District 30 Rep. Mark Jennings said that coal “is a resource that has touched everybody’s life in Wyoming.” He said the legislature should press forward to protect the industry.
“This is one area that we can do this…stand up in this war,” he said. “This is a good amendment.”
House District 16 Rep. Mike Yin said he questioned whether the PSC even has the statutory authority to enact a moratorium on coal plant closures. He said the if the legislature wants to enact such a moratorium, they should do so directly without “pushing off responsibility” onto another body.
Zwonitzer said he thought the amendment was “dangerous” since the consequences of it are uncertain. He said it may not be wise to enact “murky” legislation that could affect multi-million dollar utility operations.
The House defeated Gray’s amendment on a vote of 22-38. The amendment vote was as follows:
Ayes: ANDREW, BAKER, BEAR, BURT, FORTNER, GRAY, HALLINAN, HAROLDSON, HEINER, JENNINGS, BARLOW, KNAPP, LAURSEN, D, NEIMANE, OTTMAN, SIMPSON, STITH, STYVAR, WASHUT, WHARFF, WILLIAMS, WINTER
Nays: BANKS, BLACKBURN, BROWN, BURKHART, CLAUSEN, CLIFFORD, CONNOLLY, CRAGO, DUNCAN, EKLUND, EYRE, FLINTER, GREEAR, HARSHMAN, HENDERSON, HUNT, KINNER, LARSEN, L, MACGUIRE, MARTINEZ, NEWOME, NICHOLAS, O’HEARN, OAKLEY, OBERMUELLER, OLSEN, PAXTON, PROVENZA, ROSCOE, SCHWARTZ, SHERWOOD, SOMMERS, SWEENEY, WALTERS, WESTERN, WILSON, YIN, ZWONITZER
The House then proceeded to pass House Bill 30 on third reading on a vote of 39-21:
Ayes: BANKS, BLACKBURN, BROWN, BURKHART, CLAUSEN, CLIFFORD, CONNOLLY, CRAGO, DUNCAN, EKLUND, EYRE, FLINTER, GREEAR, HALLINAN, HARSHMAN, HENDERSON, KINNER, LARSEN, L, MACGUIRE, MARTINEZ, NEWOME, NICHOLAS, O’HEARN, OAKLEY, OBERMUELLER, OLSEN, PAXTON, PROVENZA, ROSCOE, SCHWARTZ, SHERWOOD, SOMMERS, STITH, SWEENEY, WALTERS, WASHUT, WILSON, YIN, ZWONITZER
Nays: ANDREW, BAKER, BEAR, BURT, FORTNER, GRAY, HAROLDSON, HEINER, HUNT, JENNINGS, BARLOW, KNAPP, LAURSEN, D, NEIMANE, OTTMAN, SIMPSON, STYVAR, WESTERN, WHARFF, WILLIAMS, WINTER
The bill will move to the Senate for consideration.