Regulatory Commission Orders Investigation of Utility’s Coal Retirement Plans

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CHEYENNE — The Public Service Commission of Wyoming (PSC), the regulatory agency tasked with overseeing public utilities, ordered an investigation on November 13 regarding Rocky Mountain Power’s Integrated Resource Plan (IRP) that was released October 18.

The investigation comes as lawmakers search for ways to ameliorate the impacts of the state’s declining coal industry. But that decline only accelerated last month when the IRP release outlined earlier retirement for a number of Wyoming coal plant units. The plan replaces lost generation capacity with new wind and solar investments.

REGULATORY AND LEGISLATIVE ACTIONS CONSIDERED

Now, some lawmakers are wondering what power the PSC has to prolong the life of Wyoming’s coal industry, or to at least de-incentivize its decline. At a November 5 meeting of the Minerals, Business & Economic Development Committee, Sheridan County Senator Bo Biteman asked if the PSC has the authority to tell a company it can’t retire a coal plant early.

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Chris Petrie, Chief Counsel for the PSC replied that the agency’s mission in evaluating public utility proposals is to make sure there is safe, adequate and reliable service at just and reasonable rates. “The commission has not traditionally based its decisions on other factors, like how many jobs would be created or other effects on the economy,” Petrie said.

“What’s the point of having a regulated utility if the regulators are going to allow the utility, that’s protected from competition, to close reliable, cheap, affordable energy power plants, raise the rates on our taxpayers and put our taxpayers out of work?” Biteman asked.

“We operate under a statutory framework and the framework is safe and reliable power at just and reasonable cost,” Deputy PSC Chair Mary Throne replied. That exchange prompted Uinta County Representative Danny Eyre to ask commission staff to clarify that a public utility has to prove that it would be in the best interest of Wyoming ratepayers before it can close a plant in the state. Petrie told Erye that’s correct.

“A MORE ACTIVE AND AGGRESSIVE ROLE”

Two days later, at the PSC’s November 7 meeting, Commission Chairman Kara Fornstrom said the commission should move forward with an investigation of the IRP. “It is my vision that the commission needs to take a much more active and aggressive role in understanding all the assumptions that play into the IRP,” Fornstrom said.

Following Fornstrom’s comments, Throne agreed that the PSC should investigate the IRP. “For me, there’s been a lot of public perception out there about the IRP and we don’t really operate in the public perception realm. While there’s been a robust public comment period for this, I believe that our understanding, and indeed the public’s understanding, will benefit from the more robust activity of a contested proceeding.”

What results the investigation might yield is an open question, but it will take some time to find out. The PSC has scheduled public comment hearings on the matter in both Kemmerer and Rock Springs, on January 28 and 29, respectively. The next hearing specified in the investigation order is for May 5 and 6 of next year.

PSC Chair Kara Fornstrom (left) and Deputy Chair Mary Throne.

POTENTIAL LEGISLATION TABLED

Meanwhile, it looks unlikely that the legislature will follow through on proposals to alter how the PSC operates regarding coal unit retirements in the upcoming session.

A bill draft introduced at the November 5 committee meeting was aimed at getting utility companies to provide “transition assistance” in several forms if they retired coal units “before the end of the facility’s expected lifespan” and tasked the PSC with regulating the process.

During comment on the bill, Rocky Mountain Power spokesman John Cox argued that would be a slippery slope to go down. “If this bill passes, who is next? If you can require us to pay for any impacts to a community, including lost tax revenue or lost economic benefits into the future, what happens when it comes time for another business entity to close?” Cox said.

Lawmakers also decided the proposal was problematic. The Minerals, Business & Economic Development Committee moved the draft through a subcommittee and over to the Corporations, Elections and Political Subdivisions Committee, where it was tabled during a November 19 meeting.

For now, the PSC will pursue the investigation under its long-established statutory framework. A mandate Throne called, “1915 vintage.”

Rocky Mountain Power says their plan falls within that framework. “PacifiCorp’s 2019 Integrated Resource Plan (IRP) was developed through comprehensive analysis and a public-input process spanning nearly a year and a half, resulting in the selection of a least-cost, least-risk preferred portfolio. The methodology and economic justification of the IRP that the stakeholders reviewed throughout the 18-month process is documented and available here: www.pacificorp.com/irp,” a spokesman wrote in an email to SweetwaterNow.

PacifiCorp, owned by Berkshire Hathaway Energy, operates as Rocky Mountain Power in some states and Pacific Power in others.