By Kevin Killough, State Energy Reporter
The House Minerals, Business and Economic Development Committee on Monday unanimously passed an amendment to a bill that will give Gov. Mark Gordon more flexibility in litigating over coal plant closure cases.
In 2021, Wyoming lawmakers passed a $1.2 million appropriation that allowed the governor’s office to pursue cases against other states and agencies that enact or enforce regulations or actions that impedes Wyoming’s ability to export coal.
The money came out of a dispute with Washington state, which acted to prevent the construction of a coal export terminal that could potentially have opened Asian markets to Wyoming coal.
Wyoming had intended to pursue litigation against Washington in the U.S. Supreme Court, arguing that state was violating the Interstate Commerce Clause, which gives the federal government authority to regulate the flow of goods between states.
In a 7-2 decision, the high court refused to hear the case.
Tip Of The Spear
In Monday’s committee hearing, Rep. Christopher Knapp, R-Gillette, explained that the governor’s office needs more leverage with the money beyond just using it to fight the terminal project, which has since been nixed altogether.
House Bill 69 would allow Wyoming to use that $1.2 million 2021 appropriation to pursue litigation against federal and local regulations that harm Wyoming’s coal industry.
As an example, Randall Luthi, chief energy advisor for the governor, said Portland, Oregon, is banning the transportation of coal through the city, which harms Wyoming’s ability to engage in interstate commerce.
“We’re seeing more and more local governments are making efforts to ban fossil fuels,” Luthi said.
Knapp discussed federal agency rulemaking, such as the EPA’s proposed “good neighbor” provision, which would require the agency and states to address interstate transport of air pollution that affects the air quality of downwind states.
“It’s basically the tip of the spear for what is a clear and present danger to Wyoming’s economic future,” Knapp said.
Knapp said that coal plants sometimes close, but the amendments to HB 69 give Wyoming more room to pursue litigation when those closures are early retirements resulting from anti-coal ideology.
The pace of these closures is increasing, Knapp said.
The Southwest Power Pool, a regional trade organization (RTO) that supplies power to parts of southeast Wyoming, anticipates losing 43% of coal capacity because of early closures. Mountain West, another RTO serving parts of Wyoming, is expected to lose 82% of its coal capacity.
Rep. Donald Burkhart, R-Rawlins, said companies would be free to close coal-fired power plants where it’s deemed appropriate to do so.
Cases that would be funded by the amendments would apply to plant closures that are done to “purposefully impact another state,” specifically Wyoming’s coal production, he said.
“I’ll remind you that practically every school in Wyoming was paid for by a severance tax on coal,” Burkhart said.
Luthi testified in favor of the bill, explaining that 90% of the coal mined in Wyoming is exported to other states, which supports thousands of jobs.
Almost all that coal is thermal coal used in the production of electricity, which is vital to maintaining a reliable electrical supply to the U.S., Luthi said.
“We particularly have seen in the last couple of years, as many companies have … rushed to go to just wind and solar, we see that that might be a process that actually should be backed up with more reliable 24-hour types of power, such as coal,” Luthi said.
Luthi said the original bill was useful in challenging actions that target Wyoming coal production, but it was too narrow.
Under the Biden administration, a broader range of “appropriate” legal actions will be needed, he said.
“We’re currently under a situation where many in the administration believe that the best way to solve … our climate issues is to just end the use of coal,” Luthi said.
He said the state of Wyoming is supportive of addressing climate change and protecting the environment, but attacking coal and rapidly shutting down coal plants doesn’t allow for technologies such as carbon capture to have time to be developed and implemented.
Shannon Anderson, attorney with the Powder River Basin Resource Council, a nonprofit conversation group based in Sheridan, spoke against HB 69, arguing that it would undermine legislative oversight of the use of the money.
It also would duplicate funds that already exist for this kind of litigation.
Anderson said that the original appropriation was designed to cover litigation in the U.S. Supreme Court, which is expensive and often requires outside counsel to represent Wyoming and its interests.
“The idea now is to expand it [the $1.2 million] into any kind of litigation involving coal,” Anderson said. “That kind of litigation … is already covered by the Attorney General’s office. There’s already existing funding for lawyers of the state to do this work.”
If the Attorney General’s office needs more money, it get it through a budget request to the Legislature during the legislative sessions, Anderson said.
Rep. Dalton Banks, R-Cowley, noted that HB 69 contains language about oversight of the money by the Appropriations Committee, as well as the Minerals Committee, and he asked for clarification on where there would be a lack of oversight.
Since the governor would have discretion in what litigation would be pursued with the money, Anderson explained it wouldn’t allow the Legislature to direct its spending.
“This is a much broader kind of directive, and it gives the governor the authority to initiate things,” she said. “And then he’s reporting back versus legislators sort of saying, ‘This is what we want you to spend money on.’”
Screaming For Coal
Travis Deti, executive director of the Wyoming Mining Association, talked about newspapers reporting that coal is on its way out.
“They’ve been writing our obituary for a long time,” Deti said.
Deti said that Wyoming coal production in the past couple of years has been the highest it has been in the past decade. It would have been higher, he said, but limited rail capacity has not allowed coal companies to move their product to buyers.
“This question of reliability is the real question. And to answer that question, utilities are burning more coal,” Deti said. “They want to burn more coal. High natural gas prices over the last year, we found ourselves in a situation here in December, where utilities are practically screaming for Wyoming coal.”
Deti warned that the money is needed because of an “unprecedented press” in the next couple of years from the federal government to stop coal production.
“It’s going to make the Obama years look like the Reagan years in what they’re going to do,” Deti said.
Rep. Martha Lawley, R-Worland, asked if the $1.2 million appropriation would be enough to cover the anticipated actions, and Knapp said that if more was needed, it could come through next year’s legislative budget session.
Rep. Jon Conrad, R-Mountain View, asked if there were past cases where proposed amendments would have permitted the state to respond, and Knapp said that was likely the case.
The committee passed the amendments to HB 69 9-0.