Deregulated power zones could spur economic development, legislators say

State legislators are working on a proposal to spur economic development in Wyoming by creating deregulated power zones.

The idea came up during this year’s legislative session but never made it to the floor, failing to pass muster in the Senate Minerals, Business and Economic Development Committee.

Wyoming Sen. Ed Cooper, R-Ten Sleep, who represents part of Fremont County and sits on the minerals committee, voted against Senate File 71 at that time.

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But during an interim committee meeting this week, Cooper said the proposal may represent the most feasible, and quickest, method for drawing new industries to Wyoming.

“We have a lot of growth coming to the state,” Cooper said. “(There are) some real energy frontiers coming in. If we can’t do something like this, I see us moving towards total deregulation, and I don’t think that’s what any of (us) want.”

Regulated utilities

Wyoming currently runs a regulated utility system, meaning a single utility is responsible for generation, transmission, distribution, and sale of power generated within a defined service territory, according to a report from legislative staff.

That system is “great” 99 percent of the time, Wyoming Sen. Chris Rothfuss, D-Laramie, said – but it doesn’t work when companies that need a lot of power for their operations want to move to the state.

For example, when China banned cryptocurrency mining, Rothfuss said some of those displaced companies considered moving to Wyoming, but they eventually decided to go elsewhere because the cost of power in the state was too expensive.

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“Large electrical power consumers do not come to the state of Wyoming for good reason, and that’s a concern,” he said. “This legislation attempts to address that at a modest scale.”

Deregulation

Wyoming’s rate regulations would not apply to electricity sales within deregulated power zones. So, for example, a wind farm could sell energy to a hydrogen power plant within the zone at a privately negotiated rate, Rothfuss said.

A company could also lease a portable gas turbine and move it into a deregulated power zone for use, he suggested.

“The key concept (is) you can be creative,” Rothfuss said.

Resistance

He noted that Wyoming’s regulated utilities “strongly and passionately resisted” the idea of deregulated zones during the legislative session.

“They don’t want literally any change to our regulatory structure,” Rothfuss said. “It’s worked for them very well for 130 years – they make money year in and year out.”

Cooper encouraged the regulated utility representatives present at this week’s meeting to come up with some alternative solutions that would make the state more welcoming to companies requiring large amounts of power.

“We don’t need those solutions in five years – we need them in five months,” Cooper said. “If not, then we’re going to have to move forward with something like this within the state. I think those are our alternatives at this point.”

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