Co-ops and Basin Electric warn committee federal rules and market design threaten reliability and raise costs

Representatives of Wyoming’s rural electric cooperatives and Basin Electric told the committee that federal regulatory changes and electricity-market design are raising costs and creating reliability risks for Wyoming utilities.

Sean Taylor (Wyoming Rural Electric Cooperatives) summarized federal pressures — EPA rules on air and water, coal-ash and mercury regulations, evolving BLM and Forest Service rules, and transformer-efficiency standards — that raise compliance costs and complicate operations. He urged caution when state policy interacts with federally driven market and compliance dynamics.

Jean Schafer of Basin Electric explained how regional transmission organizations (RTOs) such as Southwest Power Pool (SPP) operate: market dispatch is based on variable fuel cost, which favors zero-fuel-cost resources (wind/solar) and compresses prices, in turn exposing dispatchable thermal resources (coal, gas, nuclear) to reduced revenue for fixed costs. Schafer said renewables’ intermittent nature requires either more capacity or performance-based market adjustments to value attributes such as 24/7 availability and ramping capability. She also noted rising transmission construction costs and planning-reserve concerns as coal and other base-load generators retire or operate less frequently.

Witnesses recommended policymakers consider how market rules and incentive structures value reliability attributes and urged the committee to coordinate with the newly formed electricity-tax working group and broader stakeholder process before taking legislative steps that would affect generation, transmission or taxation of utilities.

The committee received an administrative update that management council approved a $50,000 study of electricity taxation and formed a cross-committee working group to produce recommendations.