Wyoming Coal Transition: Economic Impact and State Policy Overview
Wyoming's coal industry has seen a significant decline in production and employment over the years, leading to economic challenges for the state. Despite minimal action taken until recent years, Wyoming is now facing the retirement of coal plants and the need to transition towards a more sustainable energy future. State policies such as SF159 and HB200 aim to address these challenges and regulate the transition process. The impact of these changes on jobs, taxes, and the overall economy of Wyoming is substantial, requiring careful planning and strategic decisions for the state's energy sector.
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Wyoming Coal Transition Economic Impact and State Policy
Wyoming Coal Mines and Plants Wyoming: 16 mines, 40% US coal production 92% coal 5% Coal Exported as electricity 8% Wyoming: 10 Coal Plants, 19 units, 6.6 GW capacity Wyoming actually uses about 3% of its coal output through electricity consumption
Wyoming Coal Production 2000-2020 (millions of tons) 500 Wyoming Coal Production Down 48% in a decade. (employment down almost 40%) 450 400 350 300 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Employment: 4,400 miners (1.6%), Oct 2020 5,300 (1.8%) end of 2019 1,100 coal generation workers (0.4%) Total direct, indirect, induced employment from coal: 12,000 (4.2%) Wyoming Coal Economy Economic Value to state: 9% of total state product (13% including generation, rail) 14% of total state revenues
What has Wyoming done about coal decline? Largely nothing through 2018 At least nothing obvious
No modern coal powerplant had retired in the state. Naughton Unit 3 shut down (convert to nat. gas in 2021) Late 2018: Watershed moment in Wyoming 2018 Jan. 2019 Dec. 2018 Oct. 2019 PacifiCorp internal report - 60% of its coal fleet uneconomic PacifiCorp IRP details planned coal retirements in Wyoming:
Wyoming Coal Plant Retirements and Estimated Costs: -1,600 jobs (total impact) - $77.5 million/ yr. taxes Bridger Unit 1 310 jobs, $24 million annually in taxes Dave Johnston 510 jobs, $9.5 million annually in taxes 2025 2028 2023 2027 Naughton Units 1, 2 450 jobs, $20 million annually in taxes Bridger Unit 2 310 jobs, $24 million annually in taxes
SF159 (2019) Requires attempted sale of any retired coal plant Requires power sales back to utility at avoided cost (as determined by Wyoming PSC). HB200 (2020) Just say no Requires Wyoming PSC to develop a low-carbon (CCS) portfolio standard to apply to all utilities no later that 2030. Could limit cost recovery on any capacity built to replace retired coal units Rate recovery passed on to ratepayers 2% limit but may be exceeded if insufficient. Allows utility higher rate of return for CCS capital expenditures
Continued funding for lobbying efforts to slow or stop coal plant closures in other states ($250,000/yr.) $2.5 million made available to fund a lawsuit against Washington State over the blocked coal export terminals (if SCOTUS takes it up) Continue to support development of CCS technology in state/attract external funding Funding for development of coal-products and technologies to use carbon Other Actions
Wyoming Tax System REQUIRES REQUIRES Minerals
Short term Attempt to delay or avoid plant shutdowns through regulatory requirements Protect existing markets lobbying Develop new markets - export Wyoming s Strategy: thread the needle Medium term Develop Carbon Capture as a means of keeping plants open BECCS as a negative emission technology Long term Develop new products from coal Economic diversification strategy
Community Funding? Difficult due to serious statewide budget shortfall Compensation? Policy Going Forward? - No Plan B - Adapting is accepting. Has not been discussed officially Focus has been on forcing coal plants to delay or cancel retirement plans Securitization? Has not been formally discussed Difficult to envision given PacifiCorp serves 6 states, Wyoming only ~16% of load.
