May 23—CHEYENNE — Reasons why it may be impractical or difficult to get large amounts of electricity to big users of power, even if the law and underlying regulations should be changed, were discussed at length at a quasi-regulatory and legislative event held here on Monday.
After nearly three hours of discussion, there were no apparent breakthroughs, and some participants appeared frustrated by the lack of progress on reaching a consensus-driven solution.
The technical session at the Wyoming Public Service Commission highlighted the limitations on getting large industrial users of power the big quantities of electricity they need at low prices and, in some cases, from environmentally sustainable resources.
This discussion was spurred by the failure in the 2022 legislative session of Senate File 71, which would have allowed for deregulated power zones. SF 71 would have let some nonresidential customers opt out of the regulated energy market and get their power from third parties to run things like arrays of high-capacity computers to produce virtual currency that has real-world financial value.
As some speakers at the PSC meeting noted, the discussion turned into one about big users of power in general, going beyond just cryptocurrency. Lawyers for the Wyoming Industrial Energy Consumers association made their case for deregulation. Utilities worried that deregulation could threaten their business models and their customers by upsetting the current balance of power loads. They say that the current system generally prevents new users from quickly sapping large amounts of power from the grid, only for the customers to exit the service territory and leave remaining customers to foot the bill for the added infrastructure.
Industrial businesses are "more and more interested in self-supplying with renewable resources" to generate energy on-site, said Abby Briggerman, a lawyer from the Holland and Hart law firm who represented the industrial power-users group. Rather than the specific tack of SF 71, she encouraged the state to pursue an "alternative approach" that would "attract as many large customers" as possible to Wyoming. Her clients could contract with what she described as an independent power producer, one that is not the incumbent monopoly utility.
Discussions over what to do have "kind of pushed away from the crypto folks" to instead discuss "these large industrial" consumers, said Wyoming Rural Electric Association Executive Director Shawn Taylor. Many of his member electric cooperatives could not serve all the needs right away of a large user, like with an entire gigawatt of power. For comparison, everyone in the city of Cheyenne uses only about a quarter of that amount.
"We want to figure out how to get those gigawatt loads here" in an economically sustainable way, Taylor added. He worried about "death by a thousand cuts" of deregulation.
Speakers from the PSC and the Legislature had hoped for some problem solving. However, much of the actual discussion revolved around existing talking points.
New ideas sought
Like others from the state government, PSC Chairman Chris Petrie hoped for new solutions. He sought to "have some creative thought put toward problem solving." This could entail a "more streamlined" regulatory regime. He was interested in hearing about the "beneficial effects of competition."
Also speaking shortly after the meeting opened at around 9 a.m., PSC Commissioner Mary Throne likewise wanted to hear if "competition (could) even solve that issue" while maintaining a reliable and safe flow of power. "We also want to avoid the dreaded unintended consequences" of any changes, she added.
Sen. Jim Anderson, R-Casper, wanted to hear about how to pursue "economic development that we think might be escaping" the state. "We are interested in finding solutions within the regulated set up," as opposed to undoing the system, he said.
Black Hills Energy and its Cheyenne Light, Fuel and Power Co. reiterated that it hoped to soon announce the addition of a large new power customer.
"We have been listening to the market," said Mark Stege, vice president of Wyoming operations for the local utility. "The market has been changing."
Many experts, not just from utilities, agreed that Wyoming does not have a lot of power to spare, even though they hoped to find solutions to the SF 71 puzzle.
"The market in the West is getting pretty thin" for electricity, said Bryce Freeman, a consumer advocate for the state. "Renewable has not kept up with demand," and there have been some power plant retirements, he noted. As Petrie later noted, "my understanding is no utility here has much extra capacity."
A number of legislators from both sides of the political aisle hoped to hear constructive criticism of SF 71, with a possible goal of devising a new way forward. A primary backer of SF 71, Sen. Chris Rothfuss, D-Laramie, indicated that he was already looking to revise and rejuvenate this piece of legislation, with the concerns of utilities in mind.
In an interview after the gathering wrapped up at around 4 p.m., Rothfuss said that he hoped to advance legislation for some deregulation of the direct sale of power in certain instances, when the energy does not touch the power grid (this can be referred to as a pre-metered direct sale), and also of large electrical loads. Generally, he said that he was "disappointed that there weren't any suggestions put forward" by utilities for advancing the items in SF 71.
"I don't think that the utilities perceive the problems" that he does, the state lawmaker added. "I still think there's room for reasonable, limited deregulation under the circumstances we have discussed today."
As the noon hour approached, some participants seemed to have grown weary of the direction of the conversation. Little new ground was being trod. It was decided that a lunch break would be taken, with the goal of reconvening later in the day to try to move in a fresher direction. Following the time for lunch, the discussions in the afternoon also did not appear to reach any new consensus among the group, participants noted during a subsequent afternoon break.
"If there are better solutions that are trying to meet the solutions it is trying to meet," Rothfuss said of his bill, he wants to hear them. "If not this (legislation), then what?
"What I was hoping for today were different talking points. And, candidly, I haven't ... heard new information," the lawmaker continued. Rothfuss wants to hear "something different, something that solves these challenges." Other lawmakers expressed similar hopes.
There appeared to be few or no representatives for the crypto industry in attendance, even though SF 71 was designed with them in mind. This reflects the crypto sector's general near-absence during legislative meetings about these power issues, even though utilities and others say that these users want dozens or hundreds of megawatts of power at lower prices and in a short amount of time. Crypto groups did not comment in time for publication of this news report.
Rothfuss noted that crypto interests had participated last year in public testimony. "I could have packed the agenda" with such interests, he said. "I didn't feel like bringing them in is necessary at this point."
Jonathan Make is the Wyoming Tribune Eagle's assistant managing editor and editor of the Wyoming Business Report. He can be reached at firstname.lastname@example.org or 307-633-3129. Follow him on Twitter @makejdm.
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