SWEETWATER COUNTY — Energy transition cannot be stopped, according to University of Wyoming economist Robert Godby, and now is the time for those in southwest Wyoming and elsewhere to make plans to help affected communities and work to diversify the state’s economy.
Godby acknowledged that people don’t always like what he has to say. He was one of three panelists at a webinar titled “Wyoming’s Reality & Future Opportunities” in June. Godby is the associate dean of the Haub School of Environment and Natural Resources at the University of Wyoming. He also serves as deputy director of the Center for Energy Regulation and Policy Analysis (CERPA) and is an associate professor in the UW Economics Department.
The webinar was the first in a series titled “Reclaiming and Growing Wyoming’s Future” hosted by the Powder River Basin Resource Council. Sharon Fain with PacifiCorp and Kirk Keyser of the U.S. Economic Development Administration served as the other two panelists. Retired natural resources/energy attorney Larry Wolfe was the moderator.
Coal is not as competitive as it used to be for various reasons, and the industry has been facing a structural decline for several years, Godby said.
COAL
Coal’s “preeminent historic position in energy generation” has been affected by cost and demand factors including concerns about the environment, aging plants, regulatory uncertainty, and the low cost and abundance of the “new players on the horizon” — natural gas and renewables. Surveys have indicated that many consumers favor renewables — even people in Wyoming, Godby said. Utility companies are reacting to those preferences.
In just 15 years, coal’s contribution to energy generation went from 50% to 25% in the U.S., according to Godby. He claimed that COVID-19 has accelerated the decline to below 200 million tons at least a half-decade earlier than previously expected. He also predicted the steady decline of coal to continue once COVID-19 goes away.
Southwest Wyoming is facing the possibility of the end of coal-generation over the next decade, Godby said. He also spoke about the impacts of coal’s decline on the Powder River Basin.
Rocky Mountain Power’s plans include the retirement of all Jim Bridger Power Plant coal-fired units by 2037. Under the preferred portfolio of PacifiCorp’s 2019 integrated resource plan, Jim Bridger Unit 1 will close by the end of December 2023, Unit 2 will close by 2028 and Units 3 and 4 will operate through 2037 at the latest. Two units at the Naughton Plant near Kemmerer are set to be retired by the end of 2025, and the Dave Johnston Plant near Glenrock is also set to close under the plan.
Godby estimated that 563 miners and 350 plant workers would be affected due to the closures at Jim Bridger. Jobs lost throughout the state due to coal’s decline could likely number in the thousands in the days and years ahead.
PACIFICORP PLANS
Pacificorp’s goal is 0% job loss as coal fired units are retired at Jim Bridger, according to Fain, Rocky Mountain Power’s vice president for Wyoming.
She said the company is working with bargaining units to develop a transition plan. Attrition will be leveraged, and impacted employees can be trained and relocated to other positions with Rocky Mountain Power. Those affected will be considered a high priority for hiring in open positions, Fain said. Educational opportunities will also be provided.
Pacificorp is “energy agnostic,” according to Fain. She said the company must offer the lowest cost resources and energy it can to its customers.
The 2019 integrated resource plan (IRP) features a $3 billion investment in resources in Wyoming in coming years including wind, transmission, solar, energy storage and natural gas. Anticipated benefits include $70 million in estimated sales tax revenue during construction and development, and an estimated $14 million in annual tax revenue. Projects could provide 1,200 construction jobs and 200 or more full time jobs. Pacifcorp is made up of Rocky Mountain Power and Pacific Power. Rocky Mountain Power has 140,712 Wyoming customers and 1,298 employees, according to Fain.
EDA OPPORTUNITIES
Grants are available to communities impacted by coal’s decline as well as by the current economic situation in Wyoming, according to Kirk Keysor. He is the economic development representative for Wyoming and Montana with the U.S. Department of Commerce’s Economic Development Administration.
Options include CARES Act money as well as Assistance to Coal Communities (ACC) funds. ACC funding is available to help communities impacted by the declining use of coal through programs that assist with economic diversification, job creation and retention, investment, workforce development and re-employment opportunities.
Through its Planning and Local Technical Assistance programs, the EDA assists eligible recipients in formulating economic development plans and studies. Organizations eligible for the Local Technical Assistance program include local and state government entities, institutions of higher education, and nonprofits.
Many grants available through the EDA require a 50/50 match, according to Keysor. EDA funds are also available to help with infrastructure needs. The EDA provides tools to help communities diversify their economies and become more resilient, Keysor said.
OTHER OPTIONS
During his session, Godby discussed options available to address coal’s decline and the associated economic impacts.
Legislative action has been taken in an effort to keep plants open. Companies planning to retire coal-fired units must put them up for sale first. This is a temporary solution and could be costly, according to Godby.
Another possibility is to request company compensation, transition funding, or reinvestment in affected areas. Godby noted that Pacificorp intends to make a large investment in renewable energy sources in Wyoming, providing a chance to help diversify the economy.
Energy generation isn’t the only option for coal. Research and development needs to be done in order for coal to be a viable asset in areas such as carbon capture and storage, according to Godby.
A rather complex option that Godby referred to will be the topic of the next webinar — securitization. It is a financial strategy to create transition funding.
“The clock is ticking,” he said. “We have to start talking about these problems. We’ve put it off too long.”
He noted that discussions have begun, but that the problems we thought would be 5-10 years down the road are at our feet now. Goals need to be set and strategies developed around those goals.
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