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Gordon’s key climate and energy funding tool in budget crosshairs

A Senate amendment would block or otherwise ‘sweep’ some $400 million back into savings and budget accounts due to concerns over spending authority. It comes amid far-right backlash over the governor’s energy policies.

Gov. Mark Gordon speaks to reporters during the Western Governors' Association's winter meeting Nov. 6, 2023 in Teton Village. (Dustin Bleizeffer/WyoFile)

by Dustin Bleizeffer, WyoFile

When the Wyoming Energy Authority’s review committee for the governor’s Energy Matching Funds program met this week to hear from current and prospective grantees, committee members had to be frank: Some of the already approved grants — as well as the program itself — might soon disappear.

It all depends on whether proponents of the program can defend it against a defunding effort among some lawmakers this budget session, Energy Authority Executive Director Rob Creager said.

“We are going to be very transparent with the applicants that this is taking place and that the Senate amendment reads this way,” Creager told WyoFile on Monday. “And so if that were to stay in the budget, unfortunately, those dollars would not be there by the time the governor may or may not approve you.”

The budget language in question is Senate File 1 amendment 1S-3041, which was brought by Sen. Cheri Steinmetz (R-Lingle). It passed on a vote of 16-15 on Thursday with support from many senators who align with the House’s far-right Freedom Caucus.

There’s simply too much taxpayer money at stake, Steinmetz told fellow lawmakers on the Senate floor last week, referring to the $150 million already allocated to the program, as well as another $80 million set aside last year for an “infrastructure matching funds” program and a newly proposed $200 million “large energy projects” fund — all of which would otherwise be spent at the discretion of Gov. Mark Gordon.

Sen. Cheri Steinmetz (R-Lingle) during the 2024 budget session. (Ashton J. Hacke/Wyofile)

That spending authority ought to remain with the Legislature, Steinmetz argued.

“Do we want to be legislating and appropriating these funds or do we want the sole discretion of the governor to make these decisions for us?” Steinmetz said in support of the amendment. “I would like us to be involved in these decisions when we’re dealing with this amount of funding.”

If the amendment remains in the budget, it would sweep all three appropriations back into budgeting and savings accounts, minus funds that have already been spent. 

Neither Steinmetz nor other Senate backers of the amendment mentioned opposition to Gordon’s net-zero and carbon capture policies that he pursues via the Energy Matching Funds program and other initiatives. But many were in support of a controversial climate denial hearing that Steinmetz convened earlier this month as chair of the Senate Agriculture, State and Public Lands & Water Resources Committee.

The primary message of the Feb. 13 hearing was the long-disproven falsehood that human-caused greenhouse gas emissions are not a major contributor to climate change or a threat to humans and the environment. Steinmetz organized the hearing amid growing criticism from the far right against the governor’s vocal efforts to make Wyoming carbon-negative.

However, several others who don’t align with the far right in the Senate also expressed concerns about ceding spending authority to the governor via the Energy Matching Funds program.

Gov. Mark Gordon speaks at the Western Governors’ Association 2023 conference in Teton Village. (Mike Koshmrl/WyoFile)

“I have concerns about a governor having hundreds of millions of dollars to choose what projects to fund or what they’re interested in,” Sen. Tara Nethercott (R-Cheyenne) said. “I think it is a dangerous precedent. That said, I am worried about the pending projects currently underway that may be interfered with and the damage that may be caused. So I’m against this amendment at this moment in time.”

Given the large dollar amounts that could shift away from appropriations, Steinmetz’s amendment is likely to be a major topic for the Joint Conference Committee when it begins hashing out differences between the House and Senate budget bills later this week.

Though he shares concerns about setting precedent by giving the governor discretion over such large sums of money, Sen. Chris Rothfuss (D-Laramie) said he believes there’s a thorough vetting process for potential grantees that includes an open line of communication with lawmakers.

The Energy Authority administers the program and has formed a review committee made up of energy engineering and business experts to vet applicants and make recommendations to the governor. The agency even solicits public comment on its award recommendations, although Gordon has final say.

“Do we want to be legislating and appropriating these funds or do we want the sole discretion of the governor to make these decisions for us?” SEN.  CHERI STEINMETZ (R-LINGLE)

“I understand that the desire is to ensure that we are better involved,” Rothfuss said. “I would say the program is working as intended. And I wouldn’t want to stop it or delay it because we don’t quite like how it’s being implemented — we don’t feel involved enough, right? So if we need to be involved more, I think we can try and pursue that.”

Steinmetz did not respond to WyoFile’s inquiries by publication of this story.

Energy Matching Funds  

The Energy Matching Funds program was established in 2022, and gave the governor authority to dole out up to $100 million among entities vying for private investors as well as billions of dollars in competitive federal grants for innovative energy projects. The Legislature added another $50 million to the fund in 2023.

So far, Gordon has awarded a total $56.6 million among eight entities, including Frontier Carbon Solutions for a carbon sequestration hub in southwest Wyoming, Black Hills Energy for a coal carbon capture pilot project at the Wyodak Complex near Gillette and the University of Wyoming’s School of Energy Resources to study desalination and hydrogen production. Because of those state awards, according to Gordon and the Energy Authority, those eight entities have been able to leverage another $173 million in non-state funds to support the various energy projects — money that will mostly be spent in Wyoming.

“These projects, funded by matching grants and involving private-sector partners, are critical to our energy future,” Gordon’s press secretary Michael Pearlman told WyoFile via email. “The governor believes it is important to send the message that the state is open for business and welcoming to energy innovation.”

Another concern in the governor’s office and among proponents of the program is language in Steinmetz’s amendment that they say appears to remove all unspent funds, which includes most of the $56.6 million that’s been awarded to date. 

Some $41.3 million of the $56.6 million in approved awards is “encumbered,” according to the Energy Authority, which means contracts have been executed and “notices to proceed” have been sent. The reported total spent, as of this week, is $3.6 million.

That means, if the amendment remains as is, grantees wouldn’t see the money they’ve been promised, which would throw a wrench into ongoing planning and spending. That “may serve as a deterrent to companies with projects that would be a good fit for Wyoming,” Pearlman said. 

Proponents of the governor’s matching funds programs also say there should be more discussion before doing away with the existing $80 million infrastructure matching fund and the newly proposed $200 million large energy projects fund, which would be entirely defunded by the amendment.

In addition to maintaining the Legislature’s spending authority, Sen. Troy McKeown (R-Gillette) said he’s wary of the concept of spending Wyoming taxpayer dollars for matching funds from elsewhere.

“We love matching funds,” said McKeown who voted in support of Steinmetz’s amendment. “But I would like to give an example why that may not be good. So you go home from work at night to your spouse and your living room is full of a bunch of new stuff, and she says, ‘Look how much money I saved today.’ So when we go after matching funds, we still have to spend the matching part of the funds.”

UPDATE: Public comment opportunity

The Energy Authority this week advanced two new Energy Matching Fund grant recommendations to the governor’s desk and announced a call for public comment on the proposals that closes on March 8.

The agency’s review committee recommended a grant of $9.8 million to ATR Partners I LLC, which is collaborating with Principle Petroleum LLC on the Alpha Enriched Air Enhanced Oil Recover, Carbon Sequestration and Hydrogen Production Pilot Project.

It also recommended $1 million to Visionary Metals Corp for its King Solomon Nickel and Cobalt Project near Jeffrey City.

Public comments can be sent to the Energy Authority at wea@wyo.gov.


This article was originally published by WyoFile and is republished here with permission. WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.

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