Republicans using ‘socialist’ scheme to save unprofitable coal plants

GOP passes bill to prop up outdated power plants in Wyoming, with costs set to be passed on to consumers

A recent study by Wyoming’s largest utilities company found the state’s coal-fired power plants are no longer economical (iStock)

Republicans have been accused of employing a “socialist” policy to prop up unprofitable coal power plants in a move that could cost Wyoming residents tens of millions of dollars.

A bill signed by the state’s governor Mark Gordon last week will see power companies forced to seek a buyer for plants they wish to decommission.

Under the new legislation, any utility company selling a coal-fired plant would then be required to buy back the energy from its new owner, even if a cheaper – and potentially cleaner – power source is available.

GOP state senator Dan Dockstader, who sponsored the bill, said the measures had been put in place to protect jobs in small communities with coal power stations.

However, critics claim the new rules will see outdated and unprofitable plants kept in service, while increasing household bills for those living in the state.

Jason Shogren, an economist at the University of Wyoming, said keeping coal power stations open could cost tens of millions of dollars a year.

He estimated the average energy bill in the state could rise by $1,000 (£755) annually as companies passed the expense on to the consumer.

“They’re asking the citizens of Wyoming who pay energy to pay more to keep coal plants going. In one sense, it’s a very socialist programme,” Prof Shogren told the Wyoming Tribune Eagle.

“The economics of it is clear. It’s asking ratepayers to pay more, for consumers to subsidise producers.”

The state senate had moved to offer protections for power stations after PacifiCorp – the corporation that owns Wyoming’s largest utilities company, Rocky Mountain Power – reported 60 per cent of its coal plants are uneconomic.

Analysis by the firm found 13 of its 22 coal-fired power stations were more expensive to operate than alternative options using natural gas or renewable energy.

The report forecast the company could save as much as $317m (£240m) by closing five coal plants in Wyoming and Colorado, which are currently not scheduled for decommission until between 2029 and 2037.

The price of coal compared to natural gas, coupled with environmental concerns, has led to a sharp decline in US coal use in recent years.

The US Energy Information Administration (EIA) reported in December that 2018 had seen the lowest coal consumption levels in the United States since 1979.

Donald Trump made pledges during his presidential campaign to save the coal industry.

However, market forces appear to be pulling in the opposite direction and more coal-fired power plants closed in the first two years of Mr Trump’s administration than in the entirety of Barack Obama’s first term.