4 states weigh plans to rescue coal plants

By Miranda Willson | 04/13/2021 07:18 AM EDT

Lawmakers in several coal-producing states have introduced recent legislation aimed at propping up coal-fired power plants as electricity market trends tip away from the fossil fuel.

Lawmakers in several coal-producing states have introduced recent legislation aimed at propping up coal-fired power plants as electricity market trends tip away from the fossil fuel. Dylan Brown/E&E News/file

Four states are weighing plans to stall the retirement of coal-fired power plants, a sign of growing resistance in conservative, energy-producing regions against national efforts to decarbonize the grid and a reaction to the Texas blackouts, analysts say.

Lawmakers in Montana, Wyoming, West Virginia and North Dakota have introduced bills on the issue, including measures requiring utility regulators to scrutinize planned coal plant retirements and proposing funds for carbon capture projects.

"It’s a trend that’s picked up in the last several years," said Dan Shea, an energy policy specialist at the National Conference of State Legislatures. "I’ve been at NCSL for five-plus years, and this is definitely the most we’ve seen this type of legislation."


Lawmakers in support of the bills are generally concerned about grid reliability as more renewables come online and the economic challenges facing their states’ coal industries, which support jobs and tax revenue, Shea said.

The trend also showcases ongoing backlash against renewable energy in the aftermath of the February winter storm and ensuing electricity crisis, although all energy sources failed during power outages, analysts say. Some proponents of the bills cited the sustained blackouts in Texas during the deep freeze in proposing the measures.

Although it’s unclear if all of the plans will be enacted, Wyoming, Montana, North Dakota and West Virginia have Republican-controlled legislatures and conservative governors who have positioned themselves as strong supporters of coal.

At least one bill has become law. Wyoming Gov. Mark Gordon signed last week Senate File 136, which directs the Wyoming Public Service Commission to consider reliability as well as "cost externalities" such as economic and employment impacts when assessing proposals to retire power plants. Revenue from coal taxes supports many state services in Wyoming, which produces more coal than any other state.

In West Virginia, S.B. 542 would seek to prevent the retirement of any coal-fired power plants in the state and require utilities to maintain a minimum 30-day aggregate coal supply on site. The measure, which passed the Legislature last weekend, is needed to ensure grid reliability, especially in light of February’s winter storm, said state Sen. Rupie Phillips, a Republican who sponsored the measure.

"Coal was the baseload that probably saved a lot of places that had issues," Phillips said.

During the height of the power outages in Texas, however, 38% of coal fell offline, due in part to insufficient weatherization of coal plants that left them vulnerable to the freezing temperatures, analysts said (Energywire, March 18). Natural gas plants and wind turbines also failed during the cold conditions.

"Hardening" resource infrastructure against extreme weather events, which are projected to become more frequent with climate change, is needed to ensure grid reliability, said Daniel Brooks, vice president of integrated grid and energy systems at the Electric Power Research Institute. None of the bills includes provisions to weatherize or harden power generation resources.

"What matters is that whatever resources they have, they are able to provide those services at the times they are needed," Brooks said.

States are also eyeing ways to support carbon capture and storage at coal plants. In North Dakota, H.B. 1452 would create a new state authority to identify opportunities for low-carbon technologies, including carbon capture. The state would allocate $40 million to a fund that the authority would manage, according to the bill.

‘Radical corporate bailout’

In the long-term, the bills are unlikely to affect a potential national transition to renewable energy, said Marta Stoepker, deputy communications director of the Beyond Coal campaign at the Sierra Club. But a few could drag out the process for closing coal plants.

In Wyoming, Senate File 136 and H.B. 166 — which passed the Senate and House but had not been signed by the governor as of yesterday — could each give the state’s Public Service Commission additional avenues for challenging plans to retire power plants. One of the largest utilities in Wyoming, PacifiCorp subsidiary Rocky Mountain Power, has proposed retiring several units of coal-fired power plants in Wyoming over the next decade.

H.B. 166 would mandate that utility companies present evidence showing that a proposed coal plant retirement would save customers money and would not "adversely impact the dispatchability or reliability of electric service." The PSC would not be able to approve a proposed coal plant retirement without that evidence under the bill.

In Montana, S.B. 379 "could be an avenue" for extending the lifetime of the Colstrip power plant in the eastern part of the state, said Jo Dee Black, a public relations specialist at NorthWestern Energy, which is a partial owner of the plant. The bill would allow any of the power plant’s current owners to acquire additional interest in the plant, something NorthWestern expressed interest in doing last year (Energywire, Oct. 13, 2020). Any owner that acquired full ownership of the plant would also be shielded from financial losses, even if the plant were to shut down.

NorthWestern and the bill sponsor, Republican state Sen. Steve Fitzpatrick, said the bill would ensure that the utility had access to sufficient "dispatchable" power on hand for Montana customers.

"The impetus is to help them keep the lights on," Fitzpatrick said.

However, analysts for the Public Service Commission estimated that the bill would cost every electricity ratepayer an additional $100 per year, the Billings Gazette reported. The Montana Environmental Information Center, which opposes the bill, said it amounts to a "radical corporate bailout."

"The whole purpose of that bill is to enrich NorthWestern Energy and guarantee they get compensated for their existing share of the plant regardless of whether the plant closes," said Anne Hedges, director of policy and legislative affairs at MEIC. Fitzpatrick denied that charge.

While the various state bills aim to prioritize coal-fired power over other sources of energy, they would be superseded by potential federal legislation to transition away from carbon-intensive energy resources, said Alexandra Klass, a law professor at the University of Minnesota focused on energy and environmental law.

Nonetheless, many of the proposals could cause in-state electricity prices to increase as coal continues to become less competitive with natural gas and renewable energy, she said.

"These are things that are going to cost electricity customers in the state a lot of money, because essentially they’re trying to lock in energy resources that are not cost-effective and cost more," Klass said.

Ultimately, the bills are unlikely to achieve their stated purposes of improving reliability and preserving the coal industry, said Daniel Cohan, an associate professor with a focus on energy and electricity at Rice University.

"These proposals aren’t giving life to coal [plants] in a meaningful way or making them cleaner or forcing these plants to weatherize and become more reliable so they don’t keep failing during extreme events," Cohan said. "They’re just making it hard to close them."

Stoepker of the Sierra Club said the bills are a sign of energy-producing states looking to preserve their longstanding economic interests. National policymakers should work to include these states in the energy transition, she said.

"We need to work together with them on advancing an energy future that is more reliable and cheaper," Stoepker said.