CHEYENNE, WYOMING (Oct. 15, 2019) — The Wyoming Public Service Commission — in concert with five equivalent bodies from other states — last month asked the Federal Energy Regulatory Commission to accelerate an inquiry that could subsidize coal plants in the name of electrical grid reliability.
The letter of request appears to have been drafted, in part, by a coal industry lobbying group and passed-through by the regulatory commission.
The Wyoming Public Service Commission is a public body, appointed by the governor, with the goal of “protecting the interests of Wyoming’s Public Utility Consumers,” according to the agency’s website.
The letter dated Sept. 12 and signed by Public Service Commission chairwoman Karen Forstrom urges the FERC to accelerate action on an inquiry that has languished on its docket since January 2018. In that month, FERC rejected a proposal by the U.S. Department of Energy to subsidize coal and nuclear power plants but agreed to examine the role of both power sources in grid “reliability and resilience,” according to the news site Utility Dive.
Emails obtained by the Energy and Policy Institute through a public records request and posted online show that three paragraphs of Fornstrom’s letter match a model letter a representative of the American Coalition for Clean Coal Electricity provided to West Virginia public service commissioners on July 30.
Forstrom’s signature lent the weight of the Wyoming PSC to the coal industry group’s effort to urge the FERC to act on the question of whether coal plants are necessary for grid reliability.
“While we appreciate FERC’s efforts to examine challenges related to the reliability and resilience of the bulk power system, we are not aware of any further action, other than soliciting comments,” the lobbying group’s language in the letter bearing Forstrom’s signature read. Her letter also copied the group’s language listing the number of coal and nuclear megawatts scheduled to be taken off the grid.
Commissioners in Alabama, Kentucky, Montana, West Virginia and Tennessee sent similar letters that also used verbiage from the model letter. All are coal-producing states. The Wyoming PSC went further than some commissions, taking the time to personalize the first two and last paragraphs of the letter it sent to FERC. Commissioners in Alabama and Montana sent identical copies of the letter.
The Wyoming PSC regulates electrical, water and other utility companies on behalf of the state’s public utility consumers. The oversight arrangement is a longstanding trade-off for the utilities being granted what are essentially monopolies to maintain infrastructure for essential services.
Reached by phone on Tuesday, Fornstrom declined to comment on either the letter or the overarching issue the letter asked the FERC to address. The story of the letters was published by Bloomberg News on Friday. Fornstrom was previously contacted by Utility Dive and also declined to comment for a story that publication ran on Oct. 14.
In Wyoming, the three public service commissioners are appointed by the governor and approved by the state Senate. Fornstrom has been on the commission since March 2013 and was appointed by former Gov. Matt Mead. She was reappointed in March 2019 by Gov. Mark Gordon, who also appointed two other commissioners — Mary Throne, his former opponent in the 2018 gubernatorial election, and Mike Robinson.
Throne also declined to comment for this story, citing the chairwoman’s discretion.
One national watchdog group told Bloomberg that the lobbying group’s involvement in letters from PSCs was “a serious problem.”
“State regulators are not there to do the bidding of a coal association,” Tyson Slocum, director of Public Citizen’s energy program, told Bloomberg. Public Citizen is a non-profit, left-leaning consumer advocacy group in Washington D.C., that seeks to counter the influence of corporations in politics.
“There appears to be evidence the coal industry is directing a campaign by state regulators to push FERC to provide market-based subsidies to the coal industry,” Slocum told Bloomberg.
A representative with the Wyoming chapter of the Sierra Club echoed that sentiment. “What the PSC is supposed to be doing is making sure the utilities are providing electricity to consumers at least cost that’s reliable,” said Connie Wilbert. To copy a letter to federal regulators from a “clearly biased source of information from one of the interested parties, the coal industry, is outrageous,” she said.
In an email accompanying the coal lobbying group’s letter, it highlighted the influence of PSCs.
“Given the importance of public utility commissioners, we hope that you and other commissioners will send a letter to FERC requesting that the Commission make a decision and issue an order as expeditiously as possible.”
The group also noted that utility retirement plans are mounting.
“We believe that fuel security provided by the coal and nuclear fleets will make the grid more resilient,” the email also said, “but coal and nuclear retirements continue to mount while we wait for FERC to act.”
The Wyoming PSC is increasingly subject to political efforts to protect coal-fired power plants in Wyoming, most recently navigating a complex law passed by the Legislature last winter calling for such plants offered for sale before they are retired. At the same time, Wyoming’s biggest public electrical utility, PacifiCorp, is finalizing plans to close eight units at coal plants in the state within the coming decade.
In emailed comments to WyoFile, a lawyer with the landowner group the Powder River Basin Resource Council declined to comment on the coal industry lobby’s input into the letter.
However, PRBRC attorney Shannon Anderson called subsidies for coal power a bad idea that could cost ratepayers.
“It’s bad policy to subsidize coal power at the expense of ratepayers,” Anderson wrote. “Utilities around the nation are saving millions for customers by retiring coal-fired power plants and replacing them with less expensive energy sources. With prudent electric grid management and forward-thinking planning, any reliability concerns can easily be addressed.”
But two Wyoming lawmakers familiar with utility and PSC issues said grid reliability is indeed an issue the PSC should advocate for.
“I think the PSC is doing what’s right by the rate payer,” said House Revenue Committee Chairman Dan Zwonitzer (R-Cheyenne). “Our cheapest electricity source [in Wyoming] is still coal.” Zwonitzer was previously the chairman of the House Corporations, Elections and Political Subdivisions committee, which often deals with public utility issues and works closely with the PSC.
Current House Corporations Committee Chairman, Tyler Lindholm (R-Sundance), said he also worried about the reliability of the electrical grid as coal power plants come offline. He would oppose subsidizing coal power if it was no longer economical, Lindholm said. At the same time, he said it was possible the push from some Democratic states to rapidly transition multi-state electrical grids to renewable energy goes “beyond market demand and is affecting other states.”
The PSC is within its purview to monitor the FERC and advocate for grid reliability, Lindholm said. But the commission should not go too far or focus too much in advocacy for coal power generation if it becomes uneconomical. “We need them to approve or disapprove rates, keep an eye on consumer protection and that kind of thing,” Lindholm said.
Putting the PSC’s stamp on a form letter written by an industry group is unusual but not out of line, the two lawmakers said.
“I think it’s quasi-political but I don’t think it’s out of the bounds,” Zwonitzer said. Of the push for coal industry subsidies, he said: “It’s not within the PSC’s purview to save economies but it is their purview to protect ratepayers.”
Lindholm echoed that sentiment. “I don’t think it’s that out of turn or out of line,” he said, “but that’s public perception, the public will judge that.”
WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.
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