Bills could protect Wyoming residents from future utility rate hikes

Oct. 27—CHEYENNE — Three of seven bills reviewed by state lawmakers Friday morning aim to protect consumers from inflated utility rates while holding companies accountable for reliable energy.

The Legislature's Joint Corporations, Elections and Political Subdivisions Committee meeting happened to coincide with the Wyoming Public Service Commission's public hearing on the Rocky Mountain Power rate case. The ongoing hearing, which was being held just five minutes down the road, is addressing Rocky Mountain Power's proposed 30% utility rate hike for electrical services.

Three of the bills that were passed, with slight amendments, attempt to curb future rate hikes in Wyoming, protect residents from paying for energy costs outside the state and hold utility companies accountable for reliable generated electricity.

Electricity reliability

The Public Service Commission electricity reliability bill requires public utilities to meet electric reliability standards set by the Wyoming Public Service Commission. The bill also provides a penalty for any utility company that fails to meet those standards.

If the bill passes in next year's budget session, utility companies would be encouraged to become more proactive in generating reliable electricity in the event of a power outage.

"(The bill) is to make sure there's enough power (so) we can turn on generation to meet our needs, and not depend on sources that are intermittent," said Sen. Charles Scott, R-Casper. "That's a key to the reliability thing, and I think that's a big part of what we're dealing with here."

The draft was supported by the Public Service Commission, and Chief Counsel John Burbridge said its only suggestion was to amend the penalty provision in the bill. The original penalty is not strong enough to "get their attention," he said, and he suggested another civil penalty that would fine up to $1 million a day and give the commission more authority.

"We're just a little concerned that a misdemeanor is not going to get the attention of the utilities that are in position to provide reliable power," Burbridge said.

Representatives from Black Hills Energy, which provides power for Cheyenne, and Rocky Mountain Power expressed concern over being fined for power outages that were out of their control.

"It concerns us a little bit if we're talking about distribution, because there's a lot that's not under our control," said David Bush, governmental affairs manager with Black Hills Energy.

Rep. Jeremy Haroldson, R-Wheatland, acknowledged that outages caused by an animal or car accident are beyond control of the distributor — however, the drive behind the bill, he said, was to incentivize utilities to be more proactive in preventing these outages.

In reference, Haroldson brought up a major power outage in Texas in 2021, when a severe winter storm struck the state's power grid, cutting power to 4.5 million homes. The loss in electricity "resulted in at least 57 deaths across 25 Texas counties and over $195 billion in property damage," according to the University of Texas Energy Institute.

"Obviously, that was an act of nature, an act of God, outside of their control," Haroldson said. "After the fact, what they had in their portfolio and what they had for generation fell very short because of a lack of planning."

Bush said Black Hills Energy examined its own generation after the event, including transmission, which is already federally mandated. This past summer already showed increased power usage in Cheyenne, with a peak of 300 megawatts in a single day. The daily average is normally around 240 to 250 megawatts.

This rapid growth in electricity use has Black Hills Energy examining its infrastructure to ensure it can continue to provide reliable power.

The bill was advanced by the committee with the addition of a few amendments by a vote of 11-1, with two members excused. One amendment was the addition of a subparagraph by Scott, which excluded new facilities from a rate of return on utility investment "if it is likely operation of the facilities will result in failure to comply with reliability standards."

Rep. Mike Yin, D-Jackson, was the sole vote against the bill.

Reclamation, decommissioning costs

The drive behind this bill was to ensure ratepayers were not overcharged for the costs of removing and cleaning up coal-fired facilities that are no longer in operation. Consumers would only be responsible for additional costs at a rate that was proportionate to the amount of power used in Wyoming.

"The bill says, let's nail down how much they're worth so we don't have to pay for it twice," Scott said. "We want to make sure that if there's going to be recovery of additional costs, Wyoming ratepayers don't get hit with more than their share of it."

The bill also would require studies to be performed on current facilities to anticipate potential shutdowns, predict reclamation costs and see if the facility had other potential uses.

"Nobody's going to be interested in doing it from scratch," Scott said. "It's an essential step to know where we are."

Burbridge, from the Public Service Commission, anticipated pushback on the bill if it were applied to Rocky Mountain Power under the multi-state protocol agreement. The cost of additional decommissioning studies would fall on Wyoming taxpayers, he said. It would also apply to any generating facilities, affecting Montana-Dakota Utilities and Black Hills Energy.

"It's a solution looking for a problem," Burbridge said.

The commission is already "stretched very thin," he added, and the passage of this bill would require additional staffing.

Yin said this bill would no doubt raise prices for his constituents and said he was "excited to vote no" on it.

Richard Garlish, vice president of Rocky Mountain Power, hinted the bill might even be unnecessary, as similar studies are already required under federal law.

"But if this is the law that was to pass, we would do what we needed to comply," he said.

This bill was advanced with a vote of 10-2.

Costs that don't benefit Wyoming

In an attempt to protect Wyoming residents from unnecessarily high utility rates, lawmakers advanced a draft that would exclude "interstate electric public (utility costs) that do not benefit Wyoming ratepayers."

None of the representatives from public utility companies, nor the Public Service Commission, held a position for or against the bill, saying the passage of the proposed legislation did not affect any of their current policies.

"We don't have a position on this bill," Burbridge said. "It doesn't really change anything that isn't already going on."

Scott asked whether this bill was a complement to the previous two bills, and co-Chairman Sen. Cale Case, R-Lander, said that would be learned as the bills move forward.

Part of the concern behind the bill, Case pointed out, was the construction of two major transmission power lines being built by Rocky Mountain Power.

"Right now, under multi-state protocol, those lines are shared. Wyoming pays part of the cost of those lines," Case said. "This will be an issue in the (Rocky Mountain Power) case."

Garlish said the multi-state protocol may not be perfect, but it at least provides a negotiating tool for state sovereignty in paying utility rates.

The bill was passed with a vote of 11 in favor and one opposed. All three bill drafts will be advanced to the 2024 budget session early next year.

Hannah Shields is the Wyoming Tribune Eagle's state government reporter. She can be reached at 307-633-3167 or hshields@wyomingnews.com. You can follow her on X @happyfeet004.