Wyoming interim committee hears options to let third‑party generators serve large industrial loads while protecting ratepayers

The Joint Corporations, Elections & Political Subdivisions interim committee heard a briefing on electricity policy focused on large industrial and data‑center power needs and the potential role of third‑party generation.

John Jenks, director of energy market development at the Wyoming Energy Authority, told the committee the Authority convened an extensive stakeholder process over several months to study three issues: certificated territory integrity, serving large loads, and third‑party generation. He said the Public Service Commission’s recent rule on territory integrity took ‘‘one thing off of our plate’’ and that progress has been made on large‑load tariffs. Jenks described utilities’ existing offerings — Rocky Mountain Power’s Schedule 400, Black Hills’ large power contract service (LPCS) and Tri‑State and Basin Electric filings — and noted recent Department of Energy and FERC activity affecting interconnection.

Kara Fornstrom, consultant to the Wyoming Energy Authority, said the stakeholders did not reach consensus on third‑party generation but that the Authority concluded the clearest regulatory certainty would come from the Legislature in the form of a statutory exemption. ‘‘We are not proposing legislation today,’’ Fornstrom said, adding, ‘‘This is not about deregulation. This is about very limited exceptions around the edges of large electricity needs projects.’’ She offered a sample construct — limiting third‑party retail sales to a single customer and to projects around 100 megawatts — while noting customers, utilities and other stakeholders prefer different thresholds.

Chris Petrie, deputy chairman of the Public Service Commission, described the PSC’s plan to proceed with rulemaking on non‑utility (third‑party) generators to provide ‘‘an orderly process’’ while protecting the public interest. Petrie emphasized the PSC’s mandate under Title 37 to ensure safe, adequate and reliable service at just and reasonable rates and reiterated the commission’s focus on cost causation: ‘‘who causes a cost should pay that cost.’’

Committee members and presenters repeatedly returned to the central questions of who ultimately bears the cost of new transmission or generation and how to protect existing ratepayers. Anthony Ornelas, administrator for the Wyoming Office of Consumer Advocate, said existing regulatory tools such as LPCS tariffs can ring‑fence native customers and called for giving incumbent utilities the first opportunity to serve new large loads; OCA staff said legislative clarification would help avoid protracted court challenges to PSC decisions.

Industry representatives urged flexibility. Thor Nelson of Holland & Hart, representing the Wyoming Industrial Energy Consumers, argued a 100 MW threshold would exclude many existing Wyoming industrial customers, which often operate in the 20–80 MW range, and recommended a lower or more flexible approach. Utilities and generation and transmission cooperatives described programs to manage large loads: Basin Electric has a board‑approved large‑load program and a FEED (front‑end engineering and design) study; Tri‑State is retooling a recently rejected FERC filing and expects to refile; co‑ops and G&T members said partnership or ‘‘sleeving’’ arrangements could let third parties bring generation while utilities operate or deliver energy to maintain regulatory oversight and reliability.

Utility witnesses said their tariffs already require large customers to pay the costs of transmission upgrades and to provide additional capacity or credits to protect native customers. David Bush of Black Hills said their LPCS requires, as an example, a capacity commitment above the base load so the utility can manage availability for other customers and apply transmission credits back to the broader customer base.

What happens next: the Wyoming Energy Authority and the Public Service Commission will continue to engage on filings and rulemaking. PSC staff signaled forthcoming rule proposals on non‑utility generators; intervening federal action (DOE/FERC rulemaking on large‑load interconnection) also could reshape interconnection queues and processes. The committee did not vote on legislation; presenters urged any statutory change be narrowly tailored to provide financing certainty for developers while preserving protections for ratepayers.

The committee recessed for lunch after beginning a second agenda item on election bills.