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Amendment protecting ratepayers from expensive Wyoming carbon capture costs fails

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CASPER, Wyo. — House Bill 200 proposes rules to encourage the implementation of carbon capture technology at public utilities located in Wyoming.

Part of the impetus for the proposed legislation is to push back against PacifiCorp/Rocky Mountain Power’s plans to retire several coal fired power plants in Wyoming about a decade ahead of the initial closure schedule.

“A utility supplying power in the Western United States has announced plans to retire several coal‑fired electric generation facilities before their established depreciable lives are projected to end,” the proposed bill reads.

The proposed bill would would limit utilities’ ability to recover capital costs associated with constructing new facilities to replace the retiring plants through their rates. The proposed legislation would also aim to encourage the development of carbon capture technology.

The bill would have the Wyoming Public Service Commission establish rules to “require a public utility to generate a specified percentage of electricity generated to be dispatchable and reliable low‑carbon electricity.”

“Low carbon” would be defined as “electricity that is generated while using carbon capture, utilization and storage technology that produces carbon emissions not greater than six hundred fifty (650) pounds of carbon dioxide per megawatt hour of generated electricity averaged over one (1) calendar year.”

The commission would have to “establish a date not later than July 1, 2030 for requiring a percentage of electricity generated by a public utility to be dispatchable and reliable low‑carbon electricity” under the proposal.

“The deployment of carbon capture technology in Wyoming will provide energy to other states to meet policy goals of reduced or zero carbon dioxide emissions while maintaining reliable sources of electricity and ensuring sufficient resource adequacy,” the proposed bill reads. “Approximately twenty‑nine (29) states have established renewable fuel standards for the generation of electricity with the stated goals of reducing or eliminating carbon dioxide in the production of electricity.”

With concern that the cost of implementing carbon capture technology in order to meet the low-carbon standards could be passed onto ratepayers, House District 13 Representative Cathy Connolly suggested an amendment to the bill ahead of the second reading vote in the House of Represenatives on Wednesday, Feb. 26.

“We don’t know how much a carbon capture facility will cost,” she said, though she said costs could run between $500 million to $1 billion. “It always comes back to the ratepayer in some way.”

Similar to Connolly’s amendment, the House adopted an amendment from the House Revenue Committee on first reading which would aim to cap the amount of cost which could be passed onto ratepayers.

That amendment would allow the Public Service Commission to authorize “a rate recovery mechanism that collects a surcharge from customers not to exceed two percent (2%) of each customer’s total electric bill.”

Such a recovery mechanism would allow utilities to recover some of the costs associated with meeting the proposed low-carbon standards.

However, the amendment also allows the commission to allow the rate recovery mechanisms to exceed the 2% cap if they find the “mechanism insufficient to compensate the public utility for its prudently incurred incremental costs.”

Connolly’s amendment would have removed that exception and set the rate recovery mechanism cap at 2% in an effort to further protect ratepayers.

“Consumers can bear a 2% increase to our bills but that is it,” Connolly said.

House District 43 Representative Dan Zwonitzer said he wanted to “gently push back” against Connolly’s amendment.

He said that public utilities are required to submit “integrated resource plans” to the Public Services Commission for three year periods which include electricity rate proposals.

“This is how public utilities are regulated now,” he said.

Zwonitzer said that the version of the bill without Connolly’s amendment would give utilities the opportunity to explain to the Public Services Commission that they have incurred unanticipated costs.

“What happens now is the utility can come back and say that, ‘We had a bad hiccup,'” he said, noting that it is up to the Public Services Commission to decide whether rates utilities propose for consumers are appropriate or not.

Connolly said the potentially high cost of carbon capture facilities made this situation different from existing Public Services Commission oversight.

“In part we need this in the bill because this isn’t business as usual,” she said. “The amount of money is not business as usual. Because of that I don’t want it open ended. Ratepayers might not see any benefit at all. I would ask your aye vote in order to protect consumers, to protect ratepayers.”

The House rejected Connolly’s amendment. They also rejected an amendment suggested by House District 16 Representative Mike Yin.

Yin’s amendment would have added hydroelectric and nuclear energy generation to the definition of “low carbon” under the bill.

This proposed amendment is significant due to a different aspect of the bill.

The proposed legislation aims to limit the replacement of Wyoming’s coal fired electric generation facilities. It attempts to do so by preventing utilities from charging rates to offset the capital costs associated with new electric generation facilities built to replace existed coal fired facilities “retired on or after Jan. 1, 2024.”

An exception to this rule allows utilities to include recovery of such costs in their consumer electricity rates if the new facility meets the “low carbon” standards the bill would establish.

“I asked this question…why hydroelerctric or nuclear doesn’t count as low carbon?” Yin said in calling for his amendment. “I ask to make it count.”

Zwonitzer said that hyroelectric and nuclear are not low carbon because “they are carbon free.”

Yin argued that “no carbon is also low carbon.”

After defeating Yin’s amendment, the House passed the bill on second reading. If they pass the bill on third reading, it would move to the Senate for consideration.


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