Gravel2Gavel Construction & Real Estate Law Blog
On March 10, 2020, the Wyoming legislature passed House Bill 74 (HB 74). If signed into law, HB 74 will allow utilities and other power plant owners to replace retiring coal and natural gas electric generation plants with small modular nuclear reactors (SMRs).
HB 74 was introduced with bipartisan support on January 28, 2020, and passed with overwhelming support, with a 29-1 vote in the Wyoming State Senate on March 10, and a 56-3 vote in the Wyoming State House on March 9. On March 12, 2020, both the House Speaker and the President of the Senate signed HB 74, and the bill was sent to the office of Wyoming Governor Mark Gordon.
If it becomes law, HB 74 will allow owners of coal or natural gas plants to apply to replace such plants with SMRs, up to the current rated capacity of the retiring plant. Although SMRs are defined by the bill as having a rated capacity of not more than 300 MWe, the bill specifically allows multiple SMRs to be installed at a single site so that their combined generating capacity equals the capacity of the fossil plant they are replacing. (The SMRs must be located on the same site as the retiring coal or natural gas plant.)
To implement the bill, HB 74 instructs the Wyoming Environmental Quality Council and Department of Environmental Quality to promulgate rules and regulations to authorize the permitting of SMRs. HB 74 also expressly clarifies that it does not preempt NRC authority and that all SMRs must be licensed and permitted by the NRC.
Finally, HB 74 would impose a tax of $5/MW hour on power produced by SMRs. Electric generation taxes have been the subject of debate in Wyoming in recent years, and the state currently levies a tax of $1/MW hour on wind generation facilities.
Gov. Gordon has not indicated whether he will sign the bill or whether he might veto it. Under Wyoming law, the governor must sign or veto legislation within 15 days of transmittal where, as here, the legislation is transmitted with two days or less remaining in the session, or else the bill will become law automatically (Wyoming’s legislative session ended on March 12). Therefore, unless Gov. Gordon either acts to veto the bill or sign it into effect earlier, HB 74 will become law at midnight on March 27, 2020. Because HB 74 has strong backing from the legislature, it is unlikely the governor will veto it.
Further, the bill is of particular note given both Wyoming’s status as America’s largest producer of coal and the overwhelming Republican support for the bill. Several Wyoming coal plants are slated to retire ahead of their original end-of-life, and the bill’s primary sponsor, Republican Rep. David Miller, stated the bill might allow these plants to stay online by transitioning them to a different generation source. A local news source quoted Rep. Miller as stating that “The infrastructure is all still there—powerlines, cooling, roads, office buildings—how about replacing them with this fifth-generation nuclear reactor design?” House Bill 74 could indicate a trend for other states to adopt similar bills allowing fossil plants to be backfit with SMRs as a way to manage early retirement of fossil plants.