2021 21LSO-0688
STATE OF WYOMING
HOUSE BILL NO. HB0259
Public utilities-regulatory amendments.
Sponsored by: Representative(s) Zwonitzer and Senator(s)
Dockstader
A BILL
for
1 AN ACT relating to public utilities; providing legislative
2 findings; amending reliable and dispatchable energy
3 standards to require the public service commission to
4 establish reliability and transparency requirements;
5 amending low-carbon energy standard requirements to require
6 the use of certain generation facilities as specified;
7 authorizing the public service commission to revoke
8 certificates of convenience and necessity as specified;
9 amending and defining terms related to low-carbon energy
10 standards and requirements; amending the public service
11 commission's authority to revoke certificates for
12 violations as specified; amending standards for the
13 commission to consider during rate cases; amending
14 requirements and procedures for the sale and purchase of
15 otherwise retiring coal-fired generation facilities;
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1 amending the definitions, purposes, duties, bonding
2 authority and requirements and general powers of the
3 Wyoming energy authority; amending bonding provisions and
4 requirements pertaining to the Wyoming energy authority;
5 amending general penalties for public utilities; making
6 conforming amendments; requiring rulemaking; and providing
7 for effective dates.
8
9 Be It Enacted by the Legislature of the State of Wyoming:
10
11 Section 1.
12
13 (a) The legislature finds that:
14
15 (i) Wyoming is the largest producer of coal in
16 the United States, supplying approximately forty percent
17 (40%) of the nation's coal, which is used to generate
18 approximately eleven percent (11%) of the nation's
19 electricity that is supplied to millions of consumers in
20 the United States;
21
22 (ii) Approximately two-thirds (2/3) of the
23 electricity produced in Wyoming, most of which is produced
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1 by coal-fired electric generation facilities, is exported
2 to other states, ensuring reliability and sufficient
3 resource adequacy of the electric transmission grid;
4
5 (iii) The welfare and economic security of
6 Wyoming and its citizens depend upon the reliability and
7 resiliency of the nation's electric power supply;
8
9 (iv) Electric power markets have likely been
10 distorted by direct and indirect subsidies and will not
11 function rationally until policies account for the true and
12 total cost of generated electricity;
13
14 (v) Market distortions have resulted in the
15 undervaluation of dispatchable thermal electric power
16 generation facilities that are now at risk of early
17 retirement, which will further erode the reliability and
18 resiliency of the electric grid;
19
20 (vi) The variability and nondispatchability of
21 wind and solar electric generation threatens to expose the
22 bulk power system to reliability and resiliency challenges
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1 without the continued presence of significant dispatchable
2 thermal electric generation;
3
4 (vii) Economics and scaling issues will prevent
5 energy storage technologies from replacing dispatchable
6 thermal electric generation and providing grid support for
7 the foreseeable future;
8
9 (viii) The current system of regulatory
10 oversight is hindered in its ability to ensure the
11 reliability and resiliency of the electric grid because
12 markets are distorted by direct and indirect subsidies,
13 which prevent ratepayers from knowing the true and total
14 cost of the electric power they are purchasing. Similarly,
15 subsidies lead to analyses that incorporate premature
16 retirement of thermal electric power generation and do not
17 adequately consider the reliability and resiliency
18 penalties of renewable, nondispatchable energy;
19
20 (ix) In the states served by the Western
21 Interconnection, state policies mandating and incentivizing
22 the deployment of significant nondispatchable electricity
23 sources, including wind and solar, are imposing reliability
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1 and resiliency penalties on the bulk power system that
2 Wyoming citizens and industries rely upon;
3
4 (x) It is essential that the state immediately
5 develops additional regulatory structures to ensure that a
6 system is put into place to address the reliability and
7 resiliency penalties being imposed on the state as a result
8 of the deployment of nondispatchable sources of
9 electricity, and that Wyoming citizens and industries are
10 given more transparency about the true and total cost of
11 the deployment of those sources of electricity.
12
13 Section 2. W.S. 37-18-103 is created to read:
14
15 37-18-103. Energy reliability standards; enforcement;
16 reporting requirements.
17
18 (a) In addition to the standards established under
19 W.S. 37-18-102, beginning on July 1, 2021, one hundred
20 percent (100%) of the electricity generated or purchased by
21 a public utility shall be dispatchable. Any public utility
22 not meeting the standard required by this subsection shall:
23
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1 (i) Offset the reliability difference of
2 nondispatchable sources of electricity through firming; or
3
4 (ii) If the public utility does not offset the
5 reliability difference, be subject to revocation of the
6 public utility's certificate of convenience and necessity
7 issued under W.S. 37-2-205.
8
9 (b) To ensure that the reliability standard specified
10 in subsection (a) of this section is implemented, the
11 commission shall:
12
13 (i) Require public utilities generating or
14 purchasing nondispatchable electricity to demonstrate to
15 the commission not later than December 1, 2022, and not
16 later than each December 1 thereafter, that the public
17 utility has secured sufficient firming capacity to meet the
18 reliability standard in subsection (a) of this section. As
19 part of this annual reporting requirement, the commission
20 shall require each public utility to demonstrate or
21 provide:
22
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1 (A) The firming costs necessitated by the
2 use of renewable, nondispatchable energy;
3
4 (B) The total transmission costs with an
5 allocation of the transmission costs necessitated by the
6 use of renewable, nondispatchable energy.
7
8 (ii) Commence revocation proceedings under W.S.
9 37-2-205 if a public utility fails to meet the requirements
10 of subsection (a) of this section.
11
12 Section 3. W.S. 15-1-103(b)(ix), 37-1-101(a)(vi)(N),
13 37-2-120, 37-2-121, 37-2-133(b)(intro), (i), (iii), (d)
14 through (f), (g)(intro) and (h), 37-2-205 by creating a new
15 subsection (k), 37-3-116(d)(ii), 37-3-117(a)(i), (ii), (d),
16 (e)(iv) and (vi), 37-5-501(a)(iv) and (v),
17 37-5-503(a)(intro), (i), (ii)(A), (v), (viii), by creating
18 new paragraphs (x) through (xiii), (b), (c) and (f) through
19 (j), 37-5-504(a)(ii), (iv), (v), (x), (xv) and by creating
20 a new paragraph (xviii), 37-5-505(d) and (g)(intro),
21 37-5-506(a), (c) and by creating a new subsection (d),
22 37-5-602(b) and (m), 37-5-603(a), 37-5-607(a)(i) and (b),
23 37-12-118, 37-18-101(a)(i) through (iii) and by creating
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1 new paragraphs (v) through (x) and 37-18-102(a)(i) through
2 (iii), (v)(A), (C), (c)(ii), (d) and by creating new
3 subsections (f) and (g) are amended to read:
4
5 15-1-103. General powers of governing bodies.
6
7 (b) Any franchise granted pursuant to subparagraph
8 (a)(xxxiii)(C) of this section is subject to the following:
9
10 (ix) If a distribution system has only one (1)
11 supplier of natural gas all prices charged in that
12 franchise are subject to W.S. 37-2-121 37-2-121(a) and
13 37-2-122;
14
15 37-1-101. Definitions.
16
17 (a) As used in chapters 1, 2, 3, 12, 17 and 18 of
18 this title:
19
20 (vi) "Public utility" means and includes every
21 person that owns, operates, leases, controls or has power
22 to operate, lease or control:
23
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1 (N) The provisions of W.S. 37-18-101 and
2 37-18-102 through 37-18-103 shall not apply to any public
3 utility owned or operated by a municipality or any
4 cooperative electrical generation and transmission
5 association operating in interstate commerce whose rates
6 are not regulated by the Wyoming public service commission.
7
8 37-2-120. Order in case of violation; public hearing
9 required for change in rate or service; certificate
10 revocation.
11
12 Whenever, after investigation in accordance with the
13 provisions of this act, the commission shall be of the
14 opinion that any provisions or requirements of this act,
15 title or any other law, or any order of the commission is
16 being, has been, or is about to be violated, it may make
17 and enter of record an order in the premises, specifying
18 the actual or proposed acts or omissions to act which
19 constitute such real or proposed violations, and require
20 that such violations be discontinued or rectified, or both,
21 or that it be prevented. The commission may make and enter
22 of record an order to revoke a public utility's certificate
23 of convenience and necessity or any other right, privilege,
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1 franchise or certificate granted by the commission under
2 W.S. 37-2-205(k) for any violation. No order, however,
3 shall be made by the commission which requires the change
4 of any rate or service, facility or service regulation
5 except as otherwise specifically provided, or for a
6 revocation of any certificate, right, privilege or
7 franchise, unless or until all parties are afforded an
8 opportunity for a hearing in accordance with the Wyoming
9 Administrative Procedure Act. After any hearing under this
10 section and in addition to any revocation of a certificate,
11 right, privilege or franchise, the commission shall assess
12 a civil penalty upon the public utility not to exceed one
13 million dollars ($1,000,000.00) for each day that the
14 violation is not discontinued or rectified pursuant to an
15 order.
16
17 37-2-121. When rate to be changed by commission;
18 nontraditional rate making; considerations for electric
19 utilities.
20
21 (a) If upon hearing and investigation, any rate shall
22 be found by the commission to be inadequate or
23 unremunerative, or to be unjust, or unreasonable, or
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1 unjustly discriminatory, or unduly preferential or
2 otherwise in any respect in violation of any provision of
3 this act, the commission, within the time periods provided
4 under W.S. 37-3-106(c) may fix and order substituted
5 therefor a rate as it shall determine to be just and
6 reasonable, and in compliance with the provisions of this
7 act. The rate so ascertained, determined and fixed by the
8 commission shall be charged, enforced, collected and
9 observed by the public utility for the period of time fixed
10 by the commission. The rates may contain provisions for
11 incentives for improvement of the public utility's
12 performance or efficiency, lowering of operating costs,
13 control of expenses or improvement and upgrading or
14 modernization of its services or facilities. Any public
15 utility may apply to the commission for its consent to use
16 innovative, incentive or nontraditional rate making
17 methods. In conducting any investigation and holding any
18 hearing in response thereto, the commission may consider
19 and approve proposals which include any rate, service
20 regulation, rate setting concept, economic development
21 rate, service concept, nondiscriminatory revenue sharing or
22 profit-sharing form of regulation and policy, including
23 policies for the encouragement of the development of public
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1 utility infrastructure, services, facilities or plant
2 within the state, which can be shown by substantial
3 evidence to support and be consistent with the public
4 interest of the citizens of Wyoming.
5
6 (b) When evaluating electric resource acquisitions,
7 integrated resource plans, requests for certificates of
8 convenience and necessity or other requests or petitions
9 for the acquisition, replacement, construction,
10 decommissioning, abandonment, transfer or expansion of
11 electric generation facilities, the commission shall
12 consider the effects on Wyoming labor and employment and
13 the short-term and long-term social and economic viability
14 of Wyoming businesses and communities. Any submission
15 specified in this subsection to the commission shall be
16 accompanied by a description of the external environmental
17 and economic consequences of the plan.
18
19 37-2-133. Exemption for purchase of coal fired
20 generation facilities that would otherwise have been
21 retired; public utility purchase requirements; conditions
22 for exemption.
23
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1 (b) Electric public utilities, other than cooperative
2 electric utilities, that sell a coal fired electric
3 generation facility under an agreement approved by the
4 commission shall be obligated to purchase electricity
5 generated from a that coal fired electric generation
6 facility purchased under agreement approved by the
7 commission under W.S. 37-3-117 provided that:
8
9 (i) The person purchasing the otherwise retiring
10 coal fired electric generation facility offers to sell some
11 or all of the electricity from the facility to an electric
12 public utility that sold the facility. For purposes of this
13 paragraph, "person" shall include the Wyoming energy
14 authority, any other instrumentality of the state, a
15 cooperative electric utility or a municipal utility;
16
17 (iii) The electricity is sold under a power
18 purchase agreement with a specified term length of not less
19 than twenty (20) years, or another term length specified by
20 the purchaser, from the closing of the purchase of the
21 otherwise retiring coal fired generation facility and such
22 other terms and conditions as may be approved by the
23 commissio