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Facing a difficult future, one Wyoming community is looking to get into the coal business at a time when many are leaving

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Kemmerer

PacifiCorp's Naughton Power Plant is served by Westmoreland Coal Company's Kemmerer mine. Both are located just a few miles outside town.

On Feb. 4, the light in Jerry Greenfield’s office flickered and died.

It was no surprise to Greenfield, the Lincoln County treasurer, that something like that would happen.

In the small town of Kemmerer and surrounding areas, 498 other customers of Rocky Mountain Power also lost power. When the utility went out to fix the problem, power cut out for 412 more customers. Total time of lost electricity in the area clocked in at 2 hours and 35 minutes.

The outage was an event on its own in the sleepy little community that provides more than its weight in energy production. But considering that Rocky Mountain Power had recently shuttered one of the three coal-fired units burning at the nearby Naughton power plant — a key economic driver and employer in the towns of Kemmerer and adjacent Diamondville — the failing of electricity was big news.

The utility reported that the outage was a transmission failure, unrelated to the closure of the coal unit. The timing, however, left an impression.

This is what happens when you get rid of coal, surmised every heart in the heart of western Wyoming’s coal country.

Kemmerer and Diamondville are isolated sister towns in a vast industrial and rural area about 30 miles from the Utah border. They have been suddenly exposed to the headwinds buffeting coal. The towns’ 100-year-old Kemmerer coal mine is to be sold from its bankrupt owner to a new company, cutting a union contract and retiree health benefits in the process.

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Kemmerer

The power plant that buys the mine’s coal, owned by Rocky Mountain Power, also faces uncertainty. The economic life of the plant is set to run out in a just a few years.

Coal-fired plants shuttering and coal mines struggling are nothing new for Wyoming, which faced an unprecedented downturn around 2015. But that downturn didn’t shake the smaller coal operations of western Wyoming. The reality of coal’s downturn is just now sinking into the marrow of those towns and counties. And it’s sending local leaders scrambling.

But there’s one grand idea that has risen to prominence: Why not sell the power plant? Hell, why not buy it?

A legislative solution

Sen. Dan Dockstader, R-Afton, saw what was happening in Kemmerer and the implication for similar towns relying on Rocky Mountain Power jobs. His solution was direct and incredibly complicated: force the utility to try and sell its power plants before it closes them down.

A bill to that effect survived the legislative session, and as of Friday, awaited Gov. Mark Gordon’s signature. It would not only obligate utilities to consider sale, but force those utilities to buy the power back from their old plants.

Dockstader said the problem of retiring plants in Wyoming is all encompassing, affecting everyone from the plant worker to the town, counties and state. He wanted to try and stop the closures on the horizon that threaten towns like Kemmerer.

Kemmerer

Westmoreland's Kemmerer mine is pictured Feb. 12 in Lincoln County. The Virginia businessman who attempted to buy the mine blames his failed bid on Westmoreland's creditors.

“The infrastructure of these communities has been designed around the associated mineral industry and the plants,” he wrote in an email to the Star-Tribune before the bill had survived the legislative session. “Roads, water and sewer systems, parks and schools are all part of the overall picture when we talk about the closure of these plants.”

Local politicians, like Kent Connelly, chairman of the Lincoln County Commission, are strong supporters of Dockstader’s big idea. After decades of relying on the power plant and the utility, Connelly and people locally are angry that the utility could walk out on them.

That frustration has only grown since December, when a company report came out that showed Rocky Mountain Power’s coal plants were more expensive than other power options. That document, by no means the first time the company had acknowledged that coal is more expensive than other power sources, made waves.

Connelly said he feels the utility is operating without the community at the table. They feel like they are in the dark.

“We’ve been partners with these people for a long time,” he said of the utility. “You just can’t go quiet on us and make this decision without informing the public.”

Thinking outside the box

On a bluff perched over Diamondville’s public park – dedicated to living and dead coal miners – is a white Western plains style house, the home of the town’s mayor, Mark Langley. A welder from Louisiana, Langley made it rich recently by designing a welding clamp that his wife, a businesswoman from Utah, helped make into a product that would sell.

On a recent February afternoon, sweet cornbread cooled in a glass cake pan on the counter and homemade chili warmed on the stove. A friend of the Langleys helped stack packaged welding tools in cardboard boxes on the living room floor.

Langley sat at his kitchen counter in a loose fitting T-shirt, his hair disheveled.

What about an electric co-op, he asked.

The towns of Diamondville, Kemmerer and even surrounding communities like Opal could all chip in. They could buy the plant, or the plant and the mine. It would be a closed loop that would guarantee jobs and revenue for the foreseeable future, all the while providing the area with power.

The mayor was discussing the possibility of buying the mine in early February, before a Virginia businessman was announced as the likely buyer of the Kemmerer mine from the bankrupt Westmoreland Coal Co.

But in any case Langley is willing to consider new ideas and see them through. It’s part of his nature, said Markus Ramsperger, the town clerk, who encouraged Langley to run for mayor. The co-op idea in particular is one that numerous people locally, including Ramsperger – a former software developer from Switzerland — think could be effective.

They aren’t sure how that would happen, or what would need to be done to make it possible. But no one else is coming to save the town.

“We have to take care of ourselves,” the mayor said. “We can’t just lay down and die.”

A challenging ask

Coal rose to prominence for a number of reasons historically, but one thing it had going for it — for a very long time — was that it was the cheapest source of power.

What Wyoming has witnessed in the last few years is the result of that time honored truth becoming less true. Part of that is due to federal subsidies that helped the wind and solar industries prosper before they were economic. Most of it is due to natural gas prices falling substantially after horizontal drilling and fracking unleashed natural gas production in the U.S., experts note.

“The energy market has changed and no one person or legislature can change it back,” University of Wyoming professor Jason Shogren wrote in an op-ed published in the Star-Tribune, critiquing Dockstader’s bill. Shogren is the Stroock Chair of Natural Resource Conservation and Management. The economist said the bill would interfere with the free market to the burden of rate payers. If the utility can’t operate these plants economically, it’s unlikely that anyone else could, he wrote.

“Energy markets are telling us that coal is no longer king when it comes to being the cost-minimizing source of energy,” Shogren wrote.

There has been significant pushback, or simple skepticism, over the bill from more than academics. The utility wasn’t particularly gung ho at the beginning.

Rocky Mountain Power — the western operator of PacifiCorp — has played softball with the idea, discouraging some early aspects of the bill but also making a public peace with the Wyoming Legislature’s desire to move the utility’s hand.

In its final iteration, the bill is not opposed by the utility.

The reality is that there is nothing in the bill that Rocky Mountain Power can’t already do, said John Cox, vice president of government affairs for the utility.

Kemmerer

Kemmerer coal miner Terry Vetos stands for a portrait Feb. 11 at Rosie's bar in Diamondville. Given the uncertainty over the long-term viability of the community's mine and coal-fired power plant, locals have floated the idea of forming a power cooperative. 

Rocky Mountain Power is free to sell its own assets to a qualified buyer rather than close them down, if that’s the best decision for customers. As a regulated utility, those kinds of decisions at some point find a way before state regulators at the Public Service Commission and have to be made in the best interest of the utility’s ratepayers among other rules, he said.

What the bill does introduce is a punishment to the utility if it does not make a good faith effort to sell coal plants before closing them. It restricts the company’s ability to earn a return on investments for a coal replacement, like a wind farm, for example.

“It doesn’t mandate a sale, but it does put in place a stick,” said Cox. “If we chose to close a coal plant prematurely and we didn’t make a good faith effort to try and sell it, there’s a stick there.”

What constitutes good faith — and what constitutes nearly every requirement of this complicated ask of a regulated utility, such as that the buyer is capable of managing the operations of the plant, its eventual decommissioning and its labor force — will fall to the Wyoming Public Service Commission.

Kara Fornstrom, chairwoman of the commission, declined to comment on the bill. She said it is the role of the commission to carry out policy set by the Legislature, and that process is open to the public.

Connie Wilbert, the director of the Wyoming chapter of the Sierra Club, said the commission’s central role in this bill forces it into a difficult political position in regard to coal in Wyoming. The Sierra Club opposed the bill.

“I don’t want to suggest that our Public Service Commission won’t do the right thing, but I think it’s highly risky to assume they are going to keep anything bad from happening,” she said.

But the commission’s role is an important one for Rocky Mountain Power’s perspective, and the oversight written into the final bill makes benefit to consumer a requirement of any sale, assuaging some of the utility’s concerns.

When it came to wrangling with the bill, Cox said he repeated one refrain to lawmakers like Dockstader: that the utility’s decisions had to be in the best interest of ratepayers — customers in Wyoming and elsewhere. One lawmaker responded that he too was trying to make a decision in the best interest of his customers — voters.

“It’s true,” Cox said of the potential impact of closing these plants. “We feel a commitment to the state and these communities where we’ve been located for decades.”

But selling a coal plant to a qualified buyer to the benefit of consumers is a high bar.

Rocky Mountain Power recently delayed its expected update to its integrated resource plan — a map of how the company will supply power over the next 20 years that is updated every other year — until August. The reason? Studying coal power.

Cox said the company had not engaged with any potential buyers of its coal assets.

Irreversible tides?

Closing coal plants is not only a Wyoming challenge, and Wyoming leaders, from small towns to Cheyenne, are not the only ones responding.

In Colorado, a bill was still working its way through the Legislature Thursday that would alleviate ratepayers of the financial burden of coal plants that are set to retire early. It would also offer economic support to local communities to ease the transition. Lawmakers from Montana have taken a different direction. A bill proposed there would allow utility NorthWestern Energy to buy a greater percentage of the challenged Colstrip power plant in eastern Montana and pass that cost onto customers in the years to come.

Kemmerer

Locomotives and rail cars sit on tracks running through Kemmerer on Feb. 12. 

Rob Godby, director of the Center for Energy Economics and Public Policy at the University of Wyoming, said the result of the Dockstader bill was being missed in the public debate.

It’s a poison pill, he said.

What the bill does is inject uncertainty into closing a power plant in Wyoming, potentially encouraging Rocky Mountain Power to look elsewhere for the coal plant they intend to close first, he said.

The original intent may have simply been to keep these plants operating, but the result may be just as effective, he said.

“This is politics,” he said “People very often take politics at face value when what is really going on politically is something else.”

But, a poison pill only works if Wyoming is offering the least favorable situation. Utah or any other state with assets could do the same, Godby noted.

Forced to change

For some, the fact that there don’t appear to be many interested buyers for today’s coal plants is a backstop against an irresponsible party purchasing coal plants in Wyoming. But even with this view, the problem with the bill is that it shows Wyoming’s misplaced response to coal’s troubles.

“People want things to stay the same. They want to have the coal mines and coal plants in their communities to go on,” said Wilbert, of the Sierra Club. “But the fact is they are not going to.”

The Sierra Club has not been quiet about Rocky Mountain Power’s coal fleet in recent years. The organization commissioned a 2018 study that found PacifiCorp’s coal plants were often more expensive than other types of power generation like wind or procuring power on the open market.

The group strongly opposed Dockstader’s attempt to keep coal plants burning in Wyoming, pointing out that it risked raising customer electricity rates, burdening Wyoming with reclamation of plant sites — which have a hefty cleanup job post operation — and a risk to workers who could be shuffled from a large company to a smaller, less established one.

For Wilbert, Wyoming has too often seen speculators come in to make a quick buck on projects that may never come to fruition.

“I don’t know if business interests could conceive of an opportunity for short-term gain for themselves (by buying a coal plant), but I’m afraid that that could be the case and the repercussions will fall on the people of Wyoming,” she said.

There are losers, too, in the transition away from fossil fuels, she said.

People lose jobs, populations shift, economies change. But, there are more advantages for Wyoming in keeping pace with Rocky Mountain Power’s retirements and the decline of coal power than in trying to prop up coal plants or stop the inevitable, she said.

A hard sell

Down in Diamondville, views on the Naughton plant, Cheyenne debates and the Kemmerer mine are quite different than in other parts of the state.

It’s a town of miners and plant workers, both active and those who are retired. It’s a coal town, 100 years into being a coal town.

According to a booklet that sits on a table at the town hall, Diamondville is so named because in someone’s imagination more than 100 years ago, the dark and shiny coal of western Wyoming looked like black diamonds.

What the little town needs now is someone who sees its resource potential outside of that black rock, said Ramsperger, the Diamondville clerk.

Ramsperger first found success as a young man in Switzerland as a software developer. He came west more than a decade ago from the Florida Keys as a minister in the United Methodist Church and settled in Diamondville.

Without the plant and the mine, Diamondville and the surrounding towns will die, he said.

As the coal mine bankruptcy hits the community and the power plant’s future teeters, leaders are going to have to find solutions that haven’t been tried before, Ramsperger said.

Why not buy these assets for the benefit of the local people, he asked.

The mayor noted the same mentality over chili and cornbread, expressing both his hope in a possible outcome and his understanding that one man’s knowledge alone won’t be enough for this task.

But it sounded possible.

“People want electricity,” Langley had said. “That’s not a hard sell.”

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Energy Reporter

Heather Richards writes about energy and the environment. A native of the Blue Ridge Mountains in Virginia, she moved to Wyoming in 2015 to cover natural resources and government in Buffalo. Heather joined the Star Tribune later that year.

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