SF159. The good faith effort to sell act

There have been a lot of interesting bills in this legislative session.

Of course, I suppose there are in every session, really.  But this has seen some unusual ones.

SF159 would require companies that are closing coal fired power plants to make a good faith effort to sell them or it would deprive them of the ability to pass the cost of building a new power generation facility on to the consumers. 

Obviously, this is a bill designed to keep coal fired plants in operation in Wyoming.

This caused me to realize I don't actually know how many coal fired power plants there are in Wyoming.  More than I likely know of, I'm sure.  I can think of several, but I'm sure that more exist.  There has been a national trend towards closing them, although there has not been in Wyoming so far, which of course features power plants that are close to their source of coal, at least by rail, no matter where they are.

National trends are likely to determine the long term outcome of these plants in Wyoming.  For the time being they're likely safe from being closed except in the case of obsolesce or material decline, which is always a concern for older plants.

2019

STATE OF WYOMING

19LSO-0701

SENATE FILE NO. SF0159

New opportunities for Wyoming coal fired generation.

Sponsored by: Senator(s) Dockstader, Bebout and Driskill

A BILL

for

AN ACT relating to public utilities; limiting the recovery of costs for the retirement of coal fired generation facilities; providing a process for the sale of an otherwise retiring coal fired electric generation facility; exempting a person purchasing an otherwise retiring coal fired electric generation facility from regulation as a public utility; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.  W.S. 37‑2‑133 and 37‑3‑116 are created to read:

37‑2‑133.  Exemption for purchase of coal fired generation facilities that would otherwise have been retired.

(a)  Except as otherwise provided in this section, the provisions of this chapter and chapters 1 and 3 of this title shall not apply to a person who is not a public utility and who contracts to purchase an otherwise retiring coal fired electric generation facility from a public utility under W.S. 37‑3‑116. Except as otherwise provided in this section, the provisions of this chapter and chapters 1 and 3 of this title shall not apply to a person who is not a public utility and who contracts to purchase an otherwise retiring coal fired electric generation facility from a public utility under W.S. 37‑3‑116 and who further contracts to sell electric generation services from that facility to a retail customer of a public utility, provided that the retail purchaser of the electric generation services remains a customer of a public utility for purposes of obtaining backup service. As used in this section, "backup service" means an electric service provided by a public utility that replaces electricity ordinarily generated by the person who purchased an otherwise retiring coal fired electric generation facility under W.S. 37‑3‑116. Backup service provided to a person who also purchases electric generation and associated transmission service from a person who purchased an otherwise retiring coal fired electric generation facility under W.S. 37‑3‑116 shall not include charges for transmission service to the extent the person who purchased an otherwise retiring coal fired electric generation facility under W.S. 37‑3‑116 already pays the public utility for transmission service to deliver electricity to that customer.

(b)  The person who is selling electric generation and associated transmission services to a retail customer of a public utility through a contract entered into under this section shall not be subject to regulation as a public utility under this chapter and chapters 1 and 3 of this title except that:

(i)  The person who is selling electric generation and associated transmission services through a contract entered into under this section to a retail customer shall file a copy of any such contract with the public service commission in a manner consistent with W.S. 37‑3‑111; and

(ii)  The intrastate retail revenues received by any person who is selling electric generation and associated transmission services through a contract entered into under this section shall be subject to the uniform assessment provisions of W.S. 37‑2‑106, 37‑2‑107, 37‑2‑108 and 37‑2‑109.

37‑3‑116.  Limitation for recovery of costs associated with electric generation built to replace retiring coal fired generation facility.

(a)  Notwithstanding any other provision of this chapter, the rates charged by an electric public utility shall not include any recovery of or earnings on the capital costs associated with new electric generation facilities built, in whole or in part, to replace the electricity generated from one (1) or more coal fired generating units or plants located in Wyoming and retired on or after January 1, 2022, unless the commission has determined that the public utility that owned the retired coal fired electric generation facility made a good faith effort to sell the facility to another person prior to its retirement and that the public utility received no reasonable offer to purchase the facility.

(b)  In determining whether the public utility made a good faith effort to sell the retired coal fired electric generation facility under this section the commission shall consider:

(i)  Whether the public utility provided sufficient time prior to the facility's retirement for potential purchasers to evaluate purchasing the facility;

(ii)  Whether the public utility used reasonable efforts to make potential purchasers aware of the opportunity to purchase the facility; and

(iii)  Whether the public utility reasonably evaluated any offers received by the public utility for the purchase of the facility.

(c)  In determining whether an offer to purchase a coal fired electric generation facility under this section was reasonable the commission shall consider:

(i)  Whether accepting the offer to purchase the retired facility would have reduced costs to the public utility's customers as compared to retiring the facility;

(ii)  Whether accepting the offer to purchase the retired facility would have reduced risks to the public utility's customers as compared to retiring the facility including any diminished environmental remediation risks; and

(iii)  Whether accepting the offer to purchase the retired facility would have been in the public interest.

(d)  In determining whether an offer to purchase the retired electric generation facility was reasonable the commission shall not consider any impacts to the public utility associated with potential lost revenues from the sale of electric generation to customers who could have elected to purchase power from the person purchasing the electric generation facility under W.S. 37‑2‑133.

(e)  Upon application by a public utility, the commission may approve procedures for the solicitation and review of offers to purchase an otherwise retiring electric generation facility in advance of a proposed retirement. If the public utility follows the procedures approved by the commission to solicit and review offers to purchase an otherwise retiring electric generation facility under this subsection, there shall be no limitation under this section for recovery of costs or earnings associated with electric generation built to replace a retired coal fired electric generation facility.

(f)  Any agreement between a public utility and another person for the sale of an otherwise retiring coal fired electric generation facility shall be approved by the commission. In reviewing the agreement the commission shall consider:

(i)  Whether the proposed purchaser has, or has contracted for, financial, technical and managerial abilities sufficient to reasonably operate and maintain the facility;

(ii)  Whether the proposed purchaser has, or has contracted for, financial, technical and managerial abilities sufficient to reasonably decommission and retire the facility if and to the extent the facility is decommissioned and retired;

(iii)  Whether the proposed purchaser has, or has contracted for, financial, technical and managerial abilities sufficient to reasonably satisfy any environmental obligations associated with the operation, maintenance or potential retirement of the facility; and

(iv)  If the coal fired electric generation facility is comprised of one (1) or more generation units at a larger power plant where the public utility will continue to own and operate one (1) or more generation units, whether the proposed purchaser and the public utility have made reasonable contractual arrangements for the sharing of thecosts associated with any joint or common facilities at the plant.

Section 2.  This act is effective July 1, 2019.

(END)