2024 24LSO-0181
STATE OF WYOMING Working Draft
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DRAFT ONLY
NOT APPROVED FOR
INTRODUCTION
SENATE FILE NO.
Low-carbon reliable energy standards-amendments.
Sponsored by: Joint Minerals, Business & Economic Development Interim Committee
A BILL
for
1 AN ACT relating to public utilities; amending requirements
2 and deadlines for low-carbon energy generation standards;
3 amending reporting requirements for meeting the low-carbon
4 energy standards; requiring submission of a final energy
5 portfolio plan; amending rate recovery mechanisms
6 associated with low-carbon energy standards; requiring
7 rulemaking; and providing for effective dates.
8
9 Be It Enacted by the Legislature of the State of Wyoming:
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1 Section 1. W.S. 37-18-101(a)(iii) and 37-18-102(a)(i),
2 (ii) through (iv), (c)(iii), (d), (e) and by creating a new
3 subsection (f) are amended to read:
4
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7 STAFF COMMENT
8
9 For ease, the entirety of W.S. 37-18-101 and 37-18-102 are
10 included in this version of the bill draft. Provisions that
11 are not amended will not be included in any final version
12 of the bill draft.
13
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17 37-18-101. Definitions.
18
19 (a) As used in this article:
20
21 (i) "Carbon capture, utilization and storage
22 technology" means technology that has the principal purpose
23 of capturing, reusing, storing, sequestering or using
24 carbon dioxide emissions to prevent carbon dioxide from
25 entering the atmosphere whether constructed integral or
26 adjacent to a coal fired generation facility;
27
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1 (ii) "Dispatchable" means a source of
2 electricity that is available for use on demand and that
3 can be dispatched upon request of a power grid operator or
4 that can have its power output adjusted, according to
5 market needs;
6
7 (iii) "Low-carbon" means electricity that is
8 generated while using carbon capture, utilization and
9 storage technology that produces carbon emissions not
10 greater than six hundred fifty (650) pounds reduces not
11 less than seventy-five percent (75%) of carbon dioxide
12 emissions per megawatt hour of generated electricity
13 averaged over one (1) calendar year:
14
15 (A) From an existing coal-fired generation
16 facility; or
17
18 (B) As allowed and defined by section 45Q of
19 the Internal Revenue Code, as amended, and any applicable
20 regulations of the federal environmental protection agency.
21
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24 STAFF COMMENT
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1
2 The Committee may wish to consider:
3
4 • How the 75% reduction contemplated in paragraph (iii)
5 above is measured; for example:
6 o Whether a baseline for CO2 emissions must be
7 established, and if so, how.
8 o Whether the reduction is a reduction in CO2
9 emissions from the previous year, or some
10 specified point in time, etc.
11 • What is meant by reducing CO2 emissions "as allowed"
12 by 26 U.S.C. § 45Q, as amended, and how the Public
13 Service Commission is to determine whether a utility's
14 actions to pursue the 26 U.S.C. § 45Q credit complies
15 with the low-carbon generation requirements of this
16 article.
17
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20
21 (iv) "Reliable" means generated electricity that
22 is not subject to intermittent availability.
23
24 37-18-102. Energy generation portfolio standards;
25 reporting requirements; rate recovery and limitations.
26
27 (a) Consistent with the objective of ensuring Wyoming
28 electric utilities maintain access to reliable and cost
29 effective electric generation resources, the public service
30 commission shall establish by rule energy portfolio
31 standards that will maximize the use of dispatchable and
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1 reliable low-carbon electricity. In establishing standards,
2 the commission:
3
4 (i) Shall require a public utility serving more
5 than ten thousand (10,000) Wyoming electric customers to
6 generate a specified percentage of electricity generated to
7 be that is dispatchable and reliable low-carbon electricity
8 from an existing coal-fired generation facility or an
9 equivalent new coal-fired generation facility;
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13 STAFF COMMENT
14
15 For paragraph (i) above, the Committee may wish to consider
16 what is (or is not) an "equivalent new coal-fired
17 generation facility." The Committee may also wish to
18 consider whether a reference to an equivalent new facility
19 should be included in the definition of "low-carbon" in
20 this article.
21
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24
25 (ii) Shall establish a date not later than July
26 1, 2030 2038 for requiring a percentage of electricity
27 generated by a public utility to be dispatchable and
28 reliable low-carbon electricity taking into consideration
29 any potentially expiring federal tax credits;
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4 STAFF COMMENT
5
6 The amendment to W.S. 37-18-102(a)(iii) below is one that
7 the Public Service Commission proposed as a technical
8 correction during its presentation at the July meeting.
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13 (iii) Shall establish intermediate standards and
14 requirements for dispatchable and reliable low-carbon
15 electricity that public utilities must generate before the
16 electricity generation standard established in paragraphs
17 (i) and (ii) of this subsection;
18
19 (iv) Beginning July 1, 2024, shall require each
20 public utility to demonstrate in each integrated resource
21 plan submitted to file with the commission an annual report
22 outlining the steps in the past calendar year the public
23 utility is taking has taken to achieve the electricity
24 generation standard established in paragraphs (i) through
25 (iii) of this subsection;
26
27 (v) Shall for each public utility:
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1 (A) Establish baseline standards for
2 electric reliability to ensure that new or expanded
3 intermittent generation resources do not unreasonably
4 diminish power quality or increase momentary outages across
5 a utility's service territory or in any particular
6 location;
7
8 (B) Require the utility to monitor and
9 report electric reliability and power quality outcomes in
10 integrated resource plan submissions or as otherwise
11 directed by the commission; and
12
13 (C) Require the utility to take any steps
14 the commission deems reasonably necessary to maintain
15 reasonable levels of electric reliability and power
16 quality.
17
18 (b) In addition to W.S. 37-3-117(a), the rates
19 charged by an electric public utility shall not include any
20 recovery of or earnings on the capital costs associated
21 with new electric generation facilities built, in whole or
22 in part, to replace the electricity generated from one (1)
23 or more coal fired electric generation facilities located
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1 in Wyoming and retired on or after January 1, 2024, unless
2 the commission determines that the public utility that
3 owned the retired coal fired electric generation facility:
4
5 (i) Has satisfied the requirements of W.S. 37-3-
6 117(a); and
7
8 (ii) Is achieving or has taken steps to the
9 commission's satisfaction to achieve the electricity
10 generation standards established under subsection (a) of
11 this section.
12
13 (c) Subject to W.S. 37-3-117(a) and the limitation in
14 subsection (b) of this section, the commission shall
15 consider the following when establishing reasonable rates
16 for a public utility working toward and achieving the
17 electricity generation standards established under
18 subsection (a) of this section:
19
20 (i) A public utility that generates dispatchable
21 and reliable low-carbon electricity may apply to the
22 commission for rate recovery of the cost of any carbon
23 capture, utilization and storage technology used to achieve
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1 the electricity generation standards established under
2 subsection (a) of this section, including a higher return
3 on equity, provided that the carbon capture, utilization
4 and storage technology is integral or adjacent to a coal
5 fired generation facility in Wyoming;
6
7 (ii) A public utility may apply to the
8 commission for authorization to allow a portion of any
9 revenues from the sale of carbon dioxide captured, stored
10 or utilized as a result of generating dispatchable and
11 reliable low-carbon electricity to be returned to the
12 shareholders of the public utility;
13
14 (iii) To the extent a public utility can
15 demonstrate that it will incur incremental costs to comply
16 with the reliable and dispatchable low-carbon energy
17 standard, the commission shall authorize the public utility
18 to implement a rate recovery mechanism that collects a
19 surcharge from customers not to exceed two percent (2%) of
20 each customer's total electric bill to provide for the
21 recovery of the prudently incurred incremental costs to
22 comply with the reliable and dispatchable low-carbon energy
23 standard, including costs related to securing non-utility
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1 funding, the exploration of carbon reduction technologies,
2 the implementation of carbon reduction pilot projects, due
3 diligence studies and reports, feasibility studies, front-
4 end engineering design studies, geological studies and tax
5 and financing studies. A rate recovery mechanism may be
6 authorized and established prior to the public utility
7 incurring incremental costs to comply with the reliable and
8 dispatchable low-carbon energy standard and the public
9 utility may retain funds collected through a mechanism in a
10 regulatory account approved by the commission to offset
11 future costs. To the extent the rate recovery mechanism is
12 insufficient to compensate the public utility for its
13 prudently incurred incremental costs to comply with the
14 reliable and dispatchable low-carbon energy standard, the
15 commission shall take such actions as necessary
16 notwithstanding any other provision of this section to
17 ensure the public utility is able to recover its prudently
18 incurred incremental costs and customers are not charged
19 for those incremental costs other than through the rate
20 recovery mechanism specified in this subsection.
21
22 (d) The commission shall promulgate rules to require
23 public utilities to file reports to ensure that public
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1 utilities are satisfactorily progressing toward achieving
2 the dispatchable and reliable low-carbon electricity
3 generation standard that the commission establishes as
4 required in subsection (a) of this section and achieving
5 reasonable electric reliability and power quality outcomes
6 as required by subsection (a) of this section.
7
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10 STAFF COMMENT
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12 In subsection (d) above, the Committee may wish to consider
13 whether limiting rules to reporting requirements is
14 sufficient for the Public Service Commission to ensure that
15 public utilities are progressing toward or complying with
16 the low-carbon energy standards specified in this article.
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21 (e) Beginning in 2023, and occurring every second
22 year thereafter, the commission shall report to the
23 legislature joint minerals, business and economic
24 development interim committee and the joint corporations,
25 elections and political subdivisions interim committee
26 regarding implementation of the electricity portfolio
27 standards and recommend whether it should be continued,
28 modified or repealed. To the extent the electricity
29 portfolio standards are modified or discontinued, nothing
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1 shall impair the ability of a public utility that has
2 incurred costs to comply with the electricity portfolio
3 standards to recover its prudently incurred costs as
4 authorized by the commission.
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6