2023 23LSO-0258
STATE OF WYOMING
SENATE FILE NO. SF0142
Carbon capture and sequestration.
Sponsored by: Senator(s) Scott, Barlow, Boner, Dockstader and Landen and Representative(s) Allemand,
Allred, Banks, Berger, Chadwick, Haroldson,
Harshman, Heiner, Olsen, Strock, Walters and Zwonitzer, Dn
A BILL
for
1 AN ACT relating to public utilities; providing requirements
2 for the capture and use of carbon dioxide from coal-fired
3 electric generation facilities; requiring public utilities
4 to offer coal-fired electric generation facilities for sale
5 for purposes of carbon capture for enhanced oil and gas
6 recovery; specifying requirements for the sale of
7 byproducts from carbon dioxide streams; specifying
8 purposes; requiring bonding for already incurred and future
9 liabilities for decommissioning and cleanup of coal-fired
10 electric generation facilities as specified; specifying
11 intent for the reduction of waste of carbon dioxide;
12 providing penalties for violations; providing definitions;
13 making conforming amendments; requiring rulemaking;
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1 requiring studies; requiring reports; specifying
2 applicability; and providing for an effective date.
3
4 Be It Enacted by the Legislature of the State of Wyoming:
5
6 Section 1. 37-18-201 through 37-18-209 are created to
7 read:
8
9 ARTICLE 2
10 UTILITY REQUIREMENTS AND CARBON CAPTURE
11 PROCEDURES FOR PUBLIC UTILITIES
12
13 37-18-201. Definitions.
14
15 (a) As used in this article:
16
17 (i) "Carbon capture, utilization and
18 sequestration technology" means technology that has the
19 principal purpose of capturing, reusing, storing,
20 sequestering or using carbon dioxide emissions to prevent
21 carbon dioxide from entering the atmosphere whether
22 constructed integral or adjacent to a coal-fired generation
23 facility;
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1
2 (ii) "Carbon capture customer" means any person
3 who purchases or has an economically and technically
4 realistic prospect of purchasing a carbon dioxide stream
5 from a coal-fired electric generation facility, including
6 any person who is using or plans to use the carbon dioxide
7 stream for enhanced oil or gas recovery or sequestration;
8
9 (iii) "Carbon capture party" means:
10
11 (A) A public utility or person that
12 generates carbon dioxide through the production of
13 electricity;
14
15 (B) Any carbon capture, utilization and
16 sequestration technology customer, including any person
17 with a realistic prospect of purchasing and using part or
18 all of a carbon dioxide stream;
19
20 (C) Any person who owns, alters or creates
21 a carbon dioxide stream between a generator of carbon
22 dioxide and customers of the person;
23
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1 (D) The Wyoming oil and gas conservation
2 commission;
3
4 (E) The office of consumer advocate.
5
6 (iv) "Carbon dioxide stream" means a flow or
7 unit of carbon dioxide and any other related gases,
8 materials or contaminants within carbon dioxide that is
9 going to a carbon capture unit or from a carbon capture
10 unit to a carbon dioxide customer. "Carbon dioxide stream"
11 does not include any flow of gases that is intended for
12 release into the atmosphere;
13
14 (v) "Coal-fired electric generation facility" or
15 "facility" means any electric generation facility that uses
16 coal to generate electricity and shall include any unit or
17 portion of a facility;
18
19 (vi) "Commission" means the public service
20 commission;
21
22 (vii) "Marginal cost" means the additional cost
23 of creating a byproduct that is not incurred in the
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1 creation of a principal product. For purposes of this
2 article, if the creation of a byproduct alters the cost of
3 producing the principal product, any increase in the
4 resulting cost shall be considered a marginal cost and any
5 decrease in the resulting cost shall reduce the marginal
6 cost. "Marginal cost" shall not include any allocation of
7 any costs or investments incurred for the production of the
8 principal product;
9
10 (viii) "Net salvage value" means the value of
11 any land sold, plus the value of the components of the
12 unit, less any decommissioning costs and decommissioning
13 and reclamation costs that the purchaser may be liable for.
14 The commission may adjust the net salvage value to include
15 any amounts necessary to comply with state and federal
16 constitutional requirements associated with takings. "Net
17 salvage value" shall not include any unrecovered capital
18 costs unless those costs are constitutionally required to
19 be included in rates paid by customers after the retirement
20 or abandonment of the unit;
21
22 (ix) "Output reduction" means a reduction of
23 output of a coal-fired electric generation facility into a
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1 range of percentages of the nameplate capacity of the
2 facility as determined by the commission in accordance with
3 this article;
4
5 (x) "Parasitic load" means the steam and related
6 heat from a coal-fired electric generation facility that
7 are used to capture carbon dioxide from the flue gas
8 created by the facility.
9
10 37-18-202. Implementation by the public service
11 commission and state agencies; carbon capture in public
12 interest.
13
14 (a) This article is enacted to seek and promote
15 carbon capture, utilization and sequestration technology
16 associated with the continued and prolonged operation of
17 coal-fired electric generation facilities. To the extent
18 practical and not otherwise inconsistent with law, the
19 commission and other state agencies required to implement
20 this article shall seek to:
21
22 (i) Reduce the amount of carbon dioxide that is
23 released into the atmosphere because of electric power
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1 generation and satisfy demands from electricity customers
2 and from other states while accomplishing this reduction;
3
4 (ii) Reduce the waste of a valuable natural
5 resource by reducing the amount of carbon dioxide that is
6 released into the atmosphere;
7
8 (iii) Make carbon dioxide streams available to
9 customers in the oil and gas industry who wish to use
10 carbon dioxide streams to produce additional oil or gas by
11 using enhanced oil recovery techniques as a result of
12 recovering and utilizing those valuable natural resources;
13
14 (iv) Allow potential customers of the carbon
15 dioxide stream to earn federal or other subsidies
16 associated with carbon sequestration;
17
18 (v) Enhance the revenue of the state of Wyoming
19 and its political subdivisions through existing taxes,
20 leases and royalties;
21
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1 (vi) Ensure that decommissioning and reclamation
2 costs caused by past activities are adequately funded and
3 are not passed on to current and future customers;
4
5 (vii) Improve the reliability of the electric
6 grid serving Wyoming and other western states;
7
8 (viii) Prevent carbon capture from causing
9 material rate increases for electric customers;
10
11 (ix) Give interested parties not associated with
12 Wyoming government an opportunity to earn a profit and
13 incentivize their participation in carbon capture,
14 utilization and sequestration efforts;
15
16 (x) Retain and improve employment opportunities
17 for Wyoming residents.
18
19 (b) The commission shall consider carbon capture,
20 utilization and sequestration and the use of any resulting
21 carbon dioxide stream for enhanced oil and gas recovery to
22 be in the public interest.
23
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1 37-18-203. Carbon dioxide stream regulation;
2 considerations.
3
4 Except as otherwise provided in this subsection; no public
5 utility subject to this article shall intentionally alter a
6 carbon dioxide stream within its generating facility or
7 unit or alter a generating facility with the effect of
8 making the use of carbon dioxide captured impractical or
9 materially more expensive. The prohibition specified in
10 this subsection may be waived by agreement between the
11 public utility and carbon capture customers for
12 seventy-five percent (75%) of the available carbon dioxide.
13 Any party aggrieved by the actions of the public utility
14 under this subsection may apply to the commission for an
15 order directing the utility to comply with this subsection.
16 The commission may issue an order to correct any violation
17 of this subsection after considering W.S. 37-18-202, the
18 relative expense of correcting the problem at the power
19 plant level or the customer level, and any relevant federal
20 regulations.
21
22 37-18-204. Reclamation and decommissioning costs;
23 bonding requirements; identification of costs already
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1 recovered in rates; protection of current and new customers
2 from costs incurred serving previous customers.
3
4 (a) Except as otherwise provided in this section, for
5 each coal-fired electric generation unit slated for
6 retirement or closure before 2034 that is specified in a
7 public utility's integrated resource plan submitted to the
8 commission before July 1, 2022, a public utility shall
9 provide a decommissioning and reclamation bond in
10 accordance with the following:
11
12 (i) A bond for each facility subject to this
13 subsection shall be filed not later than December 31 of the
14 fourth year before the year of the scheduled retirement or
15 closure of the facility or any one (1) unit of the
16 facility;
17
18 (ii) Subject to paragraph (iii) of this
19 subsection, the bond shall be in an amount sufficient to
20 cover the expected net costs of decommissioning all units
21 of the facility and reclaiming the site at the facility,
22 including but not limited to any fly ash, hazardous waste
23 or other solid or liquid waste disposal sites for which the
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1 present or any future owner of the facility site may be
2 liable for damages and cleanup costs;
3
4 (iii) The initial amount of the bond shall be
5 one million dollars ($1,000,000.00) for every one (1)
6 megawatt of nameplate capacity of each unit at the
7 facility;
8
9 (iv) The bond shall be filed with the state
10 treasurer;
11
12 (v) Upon request of any interested party, the
13 environmental quality council shall review and may change
14 the amount of the bond required under this subsection to
15 provide for the full amount of decommissioning and
16 reclamation costs for the facility;
17
18 (vi) Any bond submitted under this subsection
19 shall include adequate allowances for inflation and other
20 contingencies, as determined by the environmental quality
21 council in consultation with the department of
22 environmental quality;
23
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1 (vii) In no case shall the amount of the bond be
2 less than the amount determined under subsection (b) of
3 this section by the commission that is equal to the amount
4 charged to customers for decommissioning and reclamation;
5
6 (viii) The costs of furnishing the bond required
7 under this subsection shall not be assessed to current or
8 future customers except to the extent that the commission
9 determines that continuing to serve those customers is
10 contributing to the costs that the bonds are intended to
11 defray.
12
13 (b) For facilities subject to subsection (a) of this
14 section, the commission shall undertake an analysis of the
15 extent to which rates charged by the public utility before
16 the effective date of this article included an allowance
17 for decommissioning and reclamation costs. The commission
18 shall consider rates charged in Wyoming and all other
19 states where power generated by the facility was sold. For
20 power sold outside of Wyoming, the commission may impute a
21 share of the rate for decommissioning and reclamation
22 similar to that charged in Wyoming if the rate-setting
23 practices of the relevant state or an applicable
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1 multi-state protocol justify this treatment. The commission
2 may, to the extent useful, hire outside consultants and
3 assess their costs to the utility involved. If the
4 commission is unable to reasonably separate the amounts
5 charged to customers receiving power from the facility or a
6 unit thereof from those charged for all Wyoming facilities
7 or units of the public utility, the total for all units and
8 facilities owned by the public utility in Wyoming shall be
9 used to determine the minimum bond amount required by this
10 section until an adequate formula can be developed and
11 approved by the commission. At the request of any
12 interested party, the commission shall hold a hearing and
13 take testimony and written information on the actions under
14 this subsection from the public and any interested party.
15
16 (c) In the event of a sale of a facility or a unit of
17 the facility to comply with this article, the commission
18 shall, if practical given the needs of the new owner to
19 operate the facility or unit, segregate the lands with
20 waste and fly ash disposal from the facilities required to
21 be sold under this article and require that those disposal
22 facilities remain with the public utility. For facilities
23 required to remain with the public utility under this
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1 subsection, the bond shall be divided between the area
2 retained by the public utility and the facilities and area
3 sold by the utility in proportion to the expected
4 reclamation costs. Unless the purchaser and public utility
5 reach an agreement concerning bond requirements under this
6 subsection, the commission may require the purchaser to
7 provide a bond in accordance with this section.
8
9 (d) If a unit or facility subject to this section is
10 sold to any person independent of the public utility
11 selling the facility or unit, an operating cash flow may be
12 substituted for all or a portion of the cash bond required
13 in subsection (a) of this section, subject to the
14 following:
15
16 (i) The new owner of the facility or unit shall
17 commit to the installation a