By Marit Gookin
Lander Journal
Via- Wyoming News Exchange

LANDER — Industry says rising costs and rising demands are leaving a gap in Wyoming’s power needs. Consumer advocates say that their proposed solution would leave everyday ratepayers footing the bill.

If large data centers require millions of dollars in utility upgrades, who pays?

Industry and agriculture, representatives testified, face issues with Wyoming’s existing electricity utilities: rising rates, unreliable power and long wait times on requests to infrastructure expansion requests. 

But that doesn’t mean, others argued, that the state should abandon the regulatory consumer protections it currently has in place.

The question of how to handle increasing demands on Wyoming’s electric grid isn’t a new one. Last year, the Wyoming State Legislature’s Joint Corporations, Elections, and Political Subdivisions Committee worked with stakeholders extensively, trying to find a consensus solution. One idea that had been floated was the creation of legislation to address allowing third-party power generators to exist outside the scope of public utilities – but failing to find a compromise everyone could agree on, the concept never left interim conversations.

This year, the topic is back, and in front of more than one legislative committee. 

Although the Corporations Committee has continued to hear testimony and wrangle with the topic, the Joint Minerals, Business, and Economic Development Committee is also tackling the issue this year. 

Two bill drafts that had emerged from discussions earlier into the interim failed to net the committee’s support last week.

“We have concerns because there aren’t guardrails to protect residents against the speculation. We still have a duty to serve,” Rocky Mountain Power Vice President Tom Carter said. “If someone comes on here through this legislation, there is a real chance they could say ‘Hey, we’re going to leave, but you still have to hold in reserve our megawatts.’ So if I have to hold back 100 megawatts that they could call back at any time, who pays? … It’s the residential ratepayer. There are no protections for the residential ratepayer in this legislation.”

Anthony Ornelas, administrator of the Wyoming Office of Consumer Advocate, submitted 66 pages of comments, detailing concerns about the proposed legislation. He sees a need for a legislative solution, he said, but it’s important that there are protections in place for both existing consumers and existing industry, including language that would explicitly exempt non-utility generators from the obligation utilities have to serve customers and potential customers within their service area.

But Thor Nelson with Wyoming Industrial Energy Consumers said he doubts that Rocky Mountain Power’s concern is actually for the ratepayer. He said that in his opinion, it seems more likely that the company wants to keep any profit opportunities exclusive to itself.

Third-party or non-utility generators already exist in Wyoming. But, WIEC’s Cindy Delancey said, the processes in place are inadequate to the demand – and allow too much room for the intervention of established power providers even if there’s a local appetite for a non-utility generator.

David Bush with Black Hills Energy pointed out that there’s already a system in place for bringing large loads onto the grid without unduly impacting ratepayers. The large load power service contract tariff option essentially creates a system in which the additional infrastructure expenses and any associated risks are undertaken by the customer that will be creating the large load; that customer also pays in a little extra, which is then used as a credit against the rates of residential customers. 

Not many companies have taken advantage of this option, but Black Hills Energy has seen success with it in the Cheyenne area.

Bush argued that the legislation before the committee bypassed the existing framework that allows large loads to be brought on to the system in a way that maintained consumer protections.

But, Jody Levin testified on behalf of the Wyoming Mining Association, that still leaves the problems of reliability and lengthy timelines for industries trying to operate in Wyoming.

“[Rocky Mountain Power’s] historic rate increases requested in a time of extreme drought … and unreliable power delivery with fluctuating current,” are specific problems for Wyoming agricultural producers, Justin Schilling with the Farm Bureau Federation told the committee. “We hold out hope that perhaps the prospect of third party generation might create an environment where large power producers might see fit to support Wyoming’s legacy industries with increased investment here in the state.”

Although it didn’t come up much in the Minerals Committee’s discussions, Corporations Committee Chairman Sen. Cale Case, R-Lander,  has previously noted that Wyoming’s electric grid is an economy of scale; having more consumers on the same system helps keep the costs lower for each individual person. That means that even beyond the concerns about infrastructure costs getting passed on to ratepayers, there are also concerns that allowing some customers to remove themselves from that economy of scale will result in higher bills for everyone else.

Mike Nasi, an attorney with Jackson Walker LLP, pointed out that in attempting to address similar issues, Texas stripped many of its consumer protections – and now seems to be regretting those decisions. He suggested that requiring non-utility generators to be physically separated from the rest of the grid could help alleviate some of those concerns for Wyoming.

Despite strong industry support for one of the bill drafts before the committee, the concerns expressed during hours of testimony seemed to sway several committee members. Ultimately, neither bill draft received enough votes to advance to the legislative session as a committee-sponsored bill.

The Corporations Committee is also expected to revisit the topic at one or both of its upcoming meetings, which will be held October 15 and 16 in Casper and November 17 and 18 in Cheyenne.

The above story may be used ONLY by members of the Wyoming News Exchange or with the express consent of the newspaper of its origin.