Standing In Our Own Way

January 22, 2017

 

As published in the Casper Star Tribune

 

Wyoming could be a national leader in the new energy economy, at the forefront of creating new jobs and driving our economy. Senate File 71 is a shot across the bow that stands in the way of that future. The bill would impose a $10 per megawatt-hour fine on utilities for all electric power distributed within the state from wind and other sources that are not specifically approved (e.g., coal).
 

This is an odd proposal coming from free market proponents. For years, policy makers in the state have used the free market argument to oppose provisions to set aside a designated percentage of the state’s total power generation capacity – i.e., a so-called Renewable Portfolio Standard (RPS) — for renewable energy sources. Will these same policymakers now support what is, effect, a reverse RPS giving coal an unfair advantage over wind and other competitors?
 

Where does this proposal leave Rocky Mountain Power, the state’s largest provider of electric power, which has made a huge bet on wind? Of the 5340 MW power production capacity which Rocky Mountain Power currently supplies to the state’s total 8293 MW total generation capacity, 1138 MW is already in wind. That means 22 percent of the power generation capacity in which Rocky Mountain Power has already invested would be potentially subject to the fine.
 

Free market conservatives rightly proclaim the virtues of policy “certainty” as a precondition to sound business investment decisions. We did not like it when GE reneged on its matching pledge to Wyoming’s $50 million commitment to build a state-of-the-art High Plains Coal Gasification Plant in 2009. How does it square with the widely promulgated “Cowboy ethics” Code of the West — specifically, the credo, “When you make a promise, keep it” — that we would pull the rug out from the state’s largest investor in electric power?
 

More broadly, to double down on coal while others are building new markets in renewable energy is to ignore the realities of our present times. The world is moving away from coal. Wyoming has abundant resources for wind energy, available for export to other states as well as domestic consumption. We also have an opportunity to co-locate wind generation equipment manufacturing facilities (e.g., towers, turbines, gears, rotors, etc.) and nearby wind farms as an additional (and long term) source of employment. Why would any genuine free-marketer not want to take advantage of these opportunities for economic diversification and job creation?
 

Our challenge in the face of these opportunities will be not to stand in our own way. Long term investment in wind power generation and transmission, as demonstrated by the experience of Rocky Mountain Power and Power Company of Wyoming, is not for the faint-hearted. It takes a concerted strategy, long term planning, and significant upfront investment to mobilize for this process. Financing needs to be procured. Customers need to be lined up in advance. Environmental considerations need to be taken into account for permitting and other purposes.
 

To allow ourselves to become distracted with a rear-guard action to defend coal would be to give in to the false promise of the past and betray the promise of future generations. We owe it to our youth, for the sake of their future livelihoods and quality of life, to be in the vanguard of the march to cleaner energy and a more sustainable planet.
 

The path forward to a clean energy future for Wyoming lies through self-determination, not self-deterrence. It would be a mistake to tie our own hands. We need instead to adopt an open attitude, so that we can take a hard look at ourselves and see what needs to be done. That begins with seeing ourselves as out-of-step with global trends in energy. These trends are an opportunity for us to lead. Let’s not stand in our own way.

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