Wyoming Governor Signs Law Allowing Retiring Fossil Plants to Be Replaced with Small Modular Nuclear Reactors

Pillsbury - Gravel2Gavel Construction & Real Estate Law

On March 13, 2020, Wyoming Governor Mark Gordon signed House Bill 74 (HB 74) into law. After the Governor signed HB 74, it became House Enrolled Act 60. HEA 60 allows 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 9, and a 56-3 vote in the Wyoming State House on March 10. 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.

HEA 60 allows 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.)

HEA 60 instructs the Wyoming Environmental Quality Council and Department of Environmental Quality to promulgate rules and regulations to authorize the permitting of SMRs. HEA 60 also expressly clarifies that it does not preempt NRC authority and that all SMRs must be licensed and permitted by the NRC.

Finally, HEA 60 imposes 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.

Further, HEA 60 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?” HEA 60 could indicate a trend for other states to adopt similar bills allowing fossil plants to be backfitted with SMRs as a way to manage the early retirement of fossil plants.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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