Sen. John Barrasso is trying to reform a federal law that some in Wyoming argue is being used to benefit a small renewable market while potentially inflating the cost of power for ordinary people.
His legislation, introduced Thursday, would revise the Public Utilities Regulatory Policies Act of 1978 by erasing a provision that allows small wind and solar producers guaranteed contracts with utilities like Rocky Mountain Power.
State lawmakers and some citizens’ groups in Wyoming have sought to address the provision in PURPA that obligates large utilities to buy power from small solar and wind farms regardless of the company’s need for new electricity. Some see the arrangement as nefarious. They look to abuses of the federal law in neighboring states like Idaho, where wind farms were applying for contracts under the federal umbrella by breaking their large projects into pieces of qualifying size, experts say.
U.S. Senator James Risch, R-Idaho, also sponsored the legislation to update the federal law.
In a statement Thursday, Barrasso said the law is simply outdated.
“Nearly half of all new power added to the grid last year came from renewable energy resources,” Barrasso said. “PURPA needs to be modernized to ensure that electricity consumers in Wyoming and across the country do not foot the bill for outdated rules and regulation.”
The Public Utilities Regulatory Policies Act was originally designed to reduce dependence on oil in electricity production and diversify the power mix in the U.S. The federal provision has allowed for the emergence of small wind developers in recent years, part of a nationwide boom in wind development as costs have fallen annually.
If a small developer can foot the bill of starting a project, they will find a guaranteed buyer – in the form of a large utility in the area – regardless of whether the producer is in need of more power. However, according to the law, these small developers can only sell their power to large utilities for the amount it would cost Rocky Mountain Power, for example, to procure coal-produced power. In Wyoming, that cost is overseen by state regulators. It can be a small reward given the proximity of cheap coal to the state’s coal-fired power plants.
Barrasso’s bill has the support of groups like the Wyoming Rural Electric Association.
“While we hope and support the passage of the bill by Congress, we also realize that this is an important step in starting a conversation in Congress, with federal and state regulators and, quite frankly, back home in the Wyoming legislature, who have been looking at this issue for several years,” said executive director Shawn Taylor.
The Edison Electric Institute, which represents electricity utilities, is also in favor of the bill.
Rocky Mountain Power has been the focus of the Public Utilities Act in Wyoming. The utility has pushed for state regulators to change the amount of time it has to contract with small developers, but has not made a case yet that pleased the Wyoming Public Service Commission.
The Wyoming Office of the Consumer Advocate, a division that intercedes on the behalf of the public in utility cases, has acknowledged potential risks in the federal law to consumer prices. However, the division has not come out against the law, given that it does not appear to be inflating customer rates in the state. Only about 10 percent of the small facilities proposed receive a contract with large utilities in Wyoming because of existing limitations under the federal law, according to the Consumer Advocate.
Some lawmakers, including Sen. Cale Case, R-Lander, are not convinced. Case pressed for a number of bills in committee meetings last year to reform Wyoming statutes.
One bill made it through the Legislature and was signed by the governor. Now, utilities like Rocky Mountain Power must add the cost of connecting a small wind project to the existing power lines as part of the “avoided cost,” so that the utility is not buying into a project whose cost will fall on customers.
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