Wyoming
What happens when a rural Wyoming town loses its only source of health care? – WyoFile
BAGGS—This town of 400 residents on the banks of the Little Snake River in south-central Wyoming has a school, a grocery store, a post office and a hotel with a restaurant and bar. Sometimes there’s a food truck.
But when it comes to health care, residents now have two options: calling 911 or driving at least 40 miles to the nearest town with a clinic or hospital. That’s because, as of last month, Baggs’ only clinic closed its doors, leaving residents without any local options if they have a fever, sore throat or need some stitches.
The closure was due in large part to an inability to find a permanent health care provider — like a physician assistant — to take over after the last one retired, opting for a new career at The Cowboy Inn across town.
Baggs is emblematic of a rural problem: scant health care resources that amount to a house of cards. One person leaves and the whole thing can fall apart.
The clinic
Baggs is the kind of rural that even in 45 minutes of driving, the largest nearby town still has fewer than 10,000 people, and it’s in another state. It hosts an ag-heavy economy with plenty of ranches, which come with their own health care risks.
As of the 2020 census, the population of the entire encompassing area of Carbon County was only 14,500, including its largest town: Rawlins.
Until recently, Baggs was home to the Little Snake River Clinic, where people could receive primary care from the local physician assistant or come in as needed for non-emergent care like a fever, sore throat or bad scrapes. A physician would schedule appointments there once or twice a month, too.
It was managed and paid for by UCHealth, a $6 billion Colorado-based health care provider, and the Little Snake River Health District. That levy-funded district was formed to help fund local health care needs like the clinic’s budget and equipment when the scant patients weren’t enough to keep the lights on.
Most of Wyoming, including Carbon County, is a designated primary health professional shortage area. The last time that information was updated for the area was in 2021, long before the Baggs’ clinic closed its doors.
The collapse
While patient numbers were dwindling, UCHealth and the health care district’s amicable decision to close the clinic came because neither could find a new physician assistant to take over.
“The Little Snake River Rural Health Care District was notified on the above date by UC Health that as of September 20, 2024, they will no longer be operating the clinic in Baggs, WY,” said an Aug. 12 notice from the health district. “They have struggled to find a permanent provider.”
Ryan Mikesell, president of the health care district board, said there were no hard feelings, it’s just been difficult to find someone willing to take the job.
“Finding someone not only willing to run the clinic for you, but to move here and stay here is a challenging thing,” he said.
The Baggs clinic had partnered with UCHealth’s Yampa Valley Medical Center in Steamboat Springs, Colorado, about 80 miles away. The center’s Director of Clinic Operations Ryan Larson said staff had been looking for someone to lead the clinic since February. Even part-time doctors wouldn’t move to what Larson acknowledged was likely the most rural facility in the entire UCHealth system of more than 200 clinics.
“We have one, two lined up, and then one, two rescinded thereafter.”
Ryan Larson, clinic operations director, Yampa Valley Medical Center
“We have one, two lined up, and then one, two rescinded thereafter,” he said. “We had somebody looking from Sheridan, Wyoming, then decided that she just wasn’t willing to relocate from Sheridan to Baggs.”
By late September, residents of Baggs and nearby towns had already started signing up for primary care in Craig, Colorado, according to UCHealth.
On a clear day, it’s about a 40-minute drive from Baggs, but slightly longer from Dixon, Savery or outlying ranches. While residents say the road almost never closes, it can still become icy or drifted in during the winter, especially after plow drivers park their vehicles for the night.
Some residents already had a doctor in Craig, but for those who didn’t or needed more immediate medical help, the trip to see a health care professional for an open wound, burn or fever would likely be costly both in terms of hours and gas money. That’s excluding seniors whose ailments can be treated weekly if they’re able to hop on a free bus for trips to Craig and Steamboat Springs, Colorado, which is mainly funded with public money.
For emergency medical services, though, the loss of the clinic could mean more critical patients. Sue Lee has seen it before, when the clinic closed back in 2012. She’s been an EMT in town for more than 20 years.
“When the clinic had closed before, we got a whole lot busier,” she said.
The previous closure lasted until 2014, according to former health district board member — and unofficial town historian — Linda Fleming, and was likely spurred by reimbursement issues with Medicaid and other government programs. After a short stint of being run by a Craig doctor, UCHealth stepped in.
When the clinic reopened, the critical calls to the town’s EMT service slowed again, Lee said.
“It’s a rapport that they build,” she said, talking about the clinicians with the community. “I have already started getting phone calls about, ‘What do you think? Do you think I need stitches? There’s nobody here. What should I do?’ And I’m like, I’m sorry, you’re gonna have to go to Craig.”
Many locals used the clinic like an emergency room, Lee and fellow EMT Alex Foster explained. Without it, they may wait too long to call for help.
“I think that’ll be one of our biggest hurdles, is that they won’t call us until it’s too late,” Foster said. “They don’t want to make us come out, and even though we’re all willing to come out at all hours, they just don’t want to bother us. Because that’s the first thing they say to us, ‘I’m sorry I had to call you out.’”
The building
Beyond the staffing challenges, there were funding issues with the clinic building itself.
It was set to be a major town asset with plans to house both the clinic and local seniors so they didn’t have to leave town for assisted living care. But that didn’t work out.
Paul Prestrud works with the school in Baggs, and took a break from maintaining the football field to talk.
Beyond working for the school, he was pastor for 25 years, served previously on the health care clinic’s board and is now on the Assisted Care Facility Board, which worked to get the clinic into a new office before it was forced to close.
Originally, Prestrud said, Crowheart Energy donated its buildings to the assisted care board when it moved operations out of the area. But the facilities needed a lot of work to become a self-sustaining business that could house both the clinic and older residents.
A financier had promised to inject $4 million into the project, but told the Assisted Care Facility Board it would also need to borrow $1 million to prove its intention. A deal was struck, but the backer came up short, leaving the group $650,000 in debt to the bank, Prestrud said.
The CEO of the company that promised the financing, Carlos Manuel da Silva Santos of Portugal, was charged with fraud and arrested last November.
Prestrud said the group is still $400,000 in the hole even after paying down the debt. Prestrud sets his sights high, though, hoping someone like a generous Denver Broncos football player will enter the picture. Locals could take the pro-athlete fishing or elk hunting, and maybe the local group could start moving forward again, working to help the town’s aging population.
Why did this happen?
Recruiting providers in rural areas is challenging all across the U.S., according to Mark Deutchman, director of the University of Colorado School of Medicine’s Rural Program. While it’s a “very complex” problem, he said, there are several well-known reasons providers don’t want to go into rural medicine.
“They don’t want to live in a smaller community, they want to live in a bigger town,” he said. “And sometimes they’re worried about amenities, sometimes they’re worried about the school system, sometimes they’re worried about the workload, that they’re going to be the only one there, or only one of a few there. Sometimes their spouse or partner won’t go, even if they want to go.”
Beyond that, he said training programs often do a “rotten job” of supporting students who want to practice in rural areas. Of about 160 U.S. medical schools, he said only 30 or 40 have programs specific for those seeking out rural jobs, providing them experience working in rural offices. And at least for his program, that means more doctors actually choosing to stay in rural areas — about 40% of his medical graduates in the last 19 years.
But when it comes to a place as rural as Baggs, it can be even tougher. If young doctors want to specialize, or even make contacts, it’s hard to do that in a town without a hospital, he said.
“If you’re a physician, and you look at your skill package and your knowledge and say, ‘Well, I want to be able to take care of people who are hospitalized, I want to deliver babies …’ you can’t do that if there’s no hospital,” he said.
Communities can make a difference though by getting creative, he said. That includes finding and providing housing, offering student loan forgiveness or even helping fund the education of someone from the area in exchange for them returning home to work.
Local health care professionals like Lee and Foster helped host medical students aiming to work in rural areas year after year, but not a single one came back to work in the community.
“A big fat zero,” Lee said.
Jim Zimmerman, the retired physician assistant from the clinic, has a personal understanding of why it’s so hard to both recruit and retain health care workers. Originally from Craig, he’s worked in Baggs a few times, adding up to about 14 years, he said.
Housing is one key impediment, Zimmerman said.
“If the community wants to have another provider come in and work here and stay here, they’re gonna have to figure out some housing things, which means they’re gonna have to find somebody that is going to sell a little bit of land,” he said.
But beyond that, living in a town where the nearest Walmart is 40 miles away is a hard sell.
Once you work at a rural clinic for a while, Zimmerman said, the challenges can cause burnout. For him, the biggest issue was insurance and having to jump through hoops like preauthorizations.
“The pressures of the job, dealing with the insurance companies and dealing with all the demands that come with that are just too much anymore,” he said.
He liked the work otherwise, which he said was different every day. But he said the clinic is effectively the community’s ER, since the real ER is so far away.
“We have people that walked in with heart attacks,” he said. “UCHealth would just say, ‘Call the ambulance.’ Well, in a small town like this, the ambulance might be 20 minutes from getting here.”
Zimmerman often needed more equipment to treat these critical patients, he said, but it could be hard to obtain.
Larson at the Yampa Valley Medical Center acknowledged the challenges, saying that the Baggs facility was the only UCHealth clinic stocked with advanced life support medications or a defibrillator, with that piece of equipment purchased by the health care district.
Still, Zimmerman felt it often wasn’t enough.
Hiring for general practitioners or even certain specialists can be difficult across Wyoming because there are health care jobs that pay a lot more.
That’s especially true for specialties like pediatrics and OB-GYNs, which WyoFile found are in short supply across much of the state and nation.
Next moves
The Little Snake River Rural Health Care District isn’t done fighting for the local clinic.
“We have RFPs, request for proposals, out to major entities in Wyoming, northern Colorado, pretty much anybody that’ll take one,” Mikesell, the board president, said. “Hopefully we hear back from somebody and can open the clinic back up.”
There are also other resources clinics like the one in Baggs can use, like the staffing agency Wyoming Health Resources Network. On Caroline Hickerson’s last day leading that organization in late September, she was audibly frustrated about the Little Snake River Clinic’s closure.
“I’m just sad because I didn’t know, and I wish that I had been able to help them, because I think I have providers right now who are looking for rural, underserved locations in Wyoming,” she said.
The agency has ties to providers and educational programs that bring health care workers to Wyoming or require them to work here for a time, she said.
“We have RFPs, request for proposals, out to major entities in Wyoming, northern Colorado, pretty much anybody that’ll take one.”
Ryan Mikesell, Little Snake River Rural Health Care District board president
Hickerson left the agency at the end of September, but she said the network had a contract with UCHealth. She speculated that high turnover in UCHealth’s recruiting office resulted in new staff who were unaware of the agreement or the Wyoming Health Resources Network’s services.
“It results in people not knowing about contracts that have already existed and being able to use all the connections,” she said. “I’ve worked with UCHealth and the leadership there knows I exist, but because they have so much turnover with their recruiters, and that’s unfortunate, but that’s an example of poor leadership in that organization.”
When asked about the claims of high turnover and poor communication regarding the Wyoming staffing agency, UCHealth spokesperson Lindsey Reznicek reiterated in an email that the organization provided health care services in Baggs for a decade, posted an opening for an advanced practice provider in March and wasn’t able to find a replacement.
“We were not comfortable continuing the clinic without a consistent provider presence to care for patients,” she said.
Hickerson said there are also taxpayer-funded resources to help in situations like this, including 3RNET, the National Rural Recruitment and Retention Network, a partially federally funded online database for health care workers and jobs in rural or underserved areas.
“It’s been in existence for a long time, but because it’s publicly funded, it doesn’t quite have the same breadth and reach and marketing capacity that the for-profit groups do,” she said.
Looking to the future
In the meantime, the people of Baggs will likely remain tough and self-sufficient, opting to make the long drive if need be. They’d done it the last time the clinic closed, and they may have to do it again.
“We know where we live, you know?” said Lee, the first responder. “We chose to live here, so that’s what makes [the community] tough. I mean, that’s why we are who we are.”
Zimmerman has even thought about opening a cash-only clinic where he could offer stitches and diagnosis without having to deal with insurance.
And many, like Kathleen Chase, remain optimistic. She’s the site manager of the senior center in Dixon, next door to Baggs. Chase recognizes that the clinic closure will be a big deal to some in the area, but she also believes that the health district and community will learn how to make do.
“They’re going to make it happen,” she said. “This is such a great community. Everyone looks out for everyone.”
A proposed pumped-water electricity storage facility at Seminoe Reservoir could decimate the prized Miracle Mile trout fishery on the North Platte River and jeopardize a bighorn sheep herd that wildlife officials rely on to support the species’ populations in other areas, critics of the $4 billion project say.
Anglers, business owners and wildlife biologists joined state and federal regulatory officials Thursday to testify before the Legislature’s Travel, Recreation, Wildlife and Cultural Resources Committee. They cautioned that a primary federal permitting review — by the Federal Energy Regulatory Commission — is too lax on “acceptable” impacts and riddled with inaccurate assumptions fed to it by project developer rPlus Hydro.
“These concerns are not theoretical for us,” Casper Mayor Ray Pacheco told the legislative panel. “Casper relies directly on the North Platte River for drinking water, wastewater treatment, recreation, tourism and the quality of life.”
The Wyoming Game and Fish Department’s concerns regarding impacts to the Ferris-Seminoe bighorn sheep herd, mostly due to blasting and industrial traffic during the project’s five-year construction period, “may be unresolvable,” one department official said, adding that the agency still has an opportunity to object to the project.
The company’s touted enhancement to the electrical grid is actually a net energy loss, others claimed. Several commenters were concerned about the effect of warmer water temperatures on trout. They cautioned that rPlus Hydro’s assurance that its project will only minimally raise temperatures is based on an analysis of five years of data from the 2010s that is outdated and doesn’t account for climate change-driven drought that has resulted in higher stream water temperatures and has helped sap Seminoe Reservoir to just 32% of its storage capacity today.
“I think we’re all acutely aware of what’s going on on the Colorado River system and with Flaming Gorge,” Baggs Republican Sen. Larry Hicks said, referring to the drought and water crisis wreaking havoc in the West. “The way I understand the analysis is that there’s going to be many more low water years.”
Seminoe pumped water storage project
“Pumped water storage” involves pumping water uphill during daytime “off-peak demand” hours for electricity when wind and solar power are plentiful and wholesale electricity is cheapest, according to rPlus Hydro. The pumped water would be temporarily stored in a to-be-constructed reservoir above the current reservoir and released to generate hydroelectricity during higher-demand evening hours.
The company proposes building a 13,400-acre-foot reservoir in the Bennett Mountains overlooking Seminoe Reservoir near the dam — one of several reservoirs on the North Platte River. The facility provides “energy‑storage.” “Think of it as a ‘water battery’ that stores energy generated when demand is low,” the company told WyoFile. “When demand increases, water is released from the upper reservoir back into Seminoe, driving hydroelectric turbines to produce electricity.”
“It’s an enormously large project to meet Wyoming’s future energy needs,” rPlus Hydro Deputy General Counsel Kevin Baker told the legislative committee, adding that it would help lower the cost of electricity. “Pumped (water) storage is actually one of the longest duration, most effective and most cost-efficient types of energy storage that’s on the market today.”
Baker said that FERC’s analysis of the project suggests the Seminoe project represents a $200 million annual savings to ratepayers. Further, according to Baker, FERC has suggested, the “absence of this project carries with it its own set of impacts: reduced resource adequacy, higher cost to ratepayers, and the likely need to pursue other projects that may impose greater environmental impacts or plans to the state.”
Hicks objected to the notion that the project will enhance electrical availability or affordability in Wyoming, noting that the state is a net-electrical exporting state, and that rPlus Hydro is relying on federal tax credits to help finance the project.
Despite those facts, Baker responded, the energy storage function does improve reliability and affordability throughout the western grid, including Wyoming. The project, he said, “does not consume serious amounts of water.
“The water,” he added, “will be protected. The fish habitat will be protected. Casper will still have the opportunity to use it as drinking water. Irrigation will still occur. The project will not affect Wyoming’s waters.”
Several people, including local elected officials, Trout Unlimited and local businesses, took issue with Baker’s claims, citing what they say is a flawed federal review process that hasn’t dutifully tested the company’s claims or considered locals’ concerns.
“I think what concerns me the most about this project is the precedent that it sets,” said CiCi Oliver of the Ugly Bug Fly Shop in Casper, which employs 45 people and is dependent on the North Platte River fishery. “This proposal requires exemptions from existing land use and wildlife protections in order to move forward. It is my belief that if a project only works by loosening protections that were specifically created to safeguard habitat and sensitive resources, then perhaps it is not suited for the location in the first place.”
What now?
The FERC is the primary permitting agency for the project because of its reliance on federally managed water storage reservoirs and hydroelectric systems on the North Platte River. That’s a source of heartburn for many stakeholders, including state regulatory agencies, according to Thursday’s testimony.
Members of the Travel Committee lamented that the Legislature doesn’t have a direct role in setting terms for the project. But it concluded that rPlus Hydro and FERC did not meet expectations to engage with locals during the permitting review process, which was initiated some five years ago.
So what can state lawmakers do?
There are still permitting steps where the Legislature can exert its influence, committee leadership noted.
The federal Bureau of Land Management is a cooperating agency for the project, and agency officials noted that when the FERC issues its final environmental impact statement — expected in June — they may request an amendment process if the BLM is not satisfied with natural resource protections. Wyoming Game and Fish also has an influential say in whether it is satisfied with the FERC’s final review.
Plus, others noted, the project still must go before Wyoming’s Industrial Siting Council for approval.
The committee’s cochairs suggested drafting a letter to Wyoming’s congressional delegation, as well as FERC and other permitting agencies, imploring them to address concerns expressed by Wyoming stakeholders. The committee approved that idea in a unanimous vote.
Wyoming
Critics oppose Wyoming hydroelectric project, pointing to climate-driven drought crisis – WyoFile
A proposed pumped-water electricity storage facility at Seminoe Reservoir could decimate the prized Miracle Mile trout fishery on the North Platte River and jeopardize a bighorn sheep herd that wildlife officials rely on to support the species’ populations in other areas, critics of the $4 billion project say.
Anglers, business owners and wildlife biologists joined state and federal regulatory officials Thursday to testify before the Legislature’s Travel, Recreation, Wildlife and Cultural Resources Committee. They cautioned that a primary federal permitting review — by the Federal Energy Regulatory Commission — is too lax on “acceptable” impacts and riddled with inaccurate assumptions fed to it by project developer rPlus Hydro.
“These concerns are not theoretical for us,” Casper Mayor Ray Pacheco told the legislative panel. “Casper relies directly on the North Platte River for drinking water, wastewater treatment, recreation, tourism and the quality of life.”
The Wyoming Game and Fish Department’s concerns regarding impacts to the Ferris-Seminoe bighorn sheep herd, mostly due to blasting and industrial traffic during the project’s five-year construction period, “may be unresolvable,” one department official said, adding that the agency still has an opportunity to object to the project.
The company’s touted enhancement to the electrical grid is actually a net energy loss, others claimed. Several commenters were concerned about the effect of warmer water temperatures on trout. They cautioned that rPlus Hydro’s assurance that its project will only minimally raise temperatures is based on an analysis of five years of data from the 2010s that is outdated and doesn’t account for climate change-driven drought that has resulted in higher stream water temperatures and has helped sap Seminoe Reservoir to just 32% of its storage capacity today.
“I think we’re all acutely aware of what’s going on on the Colorado River system and with Flaming Gorge,” Baggs Republican Sen. Larry Hicks said, referring to the drought and water crisis wreaking havoc in the West. “The way I understand the analysis is that there’s going to be many more low water years.”
Seminoe pumped water storage project
“Pumped water storage” involves pumping water uphill during daytime “off-peak demand” hours for electricity when wind and solar power are plentiful and wholesale electricity is cheapest, according to rPlus Hydro. The pumped water would be temporarily stored in a to-be-constructed reservoir above the current reservoir and released to generate hydroelectricity during higher-demand evening hours.
The company proposes building a 13,400-acre-foot reservoir in the Bennett Mountains overlooking Seminoe Reservoir near the dam — one of several reservoirs on the North Platte River. The facility provides “energy‑storage.” “Think of it as a ‘water battery’ that stores energy generated when demand is low,” the company told WyoFile. “When demand increases, water is released from the upper reservoir back into Seminoe, driving hydroelectric turbines to produce electricity.”
“It’s an enormously large project to meet Wyoming’s future energy needs,” rPlus Hydro Deputy General Counsel Kevin Baker told the legislative committee, adding that it would help lower the cost of electricity. “Pumped [water] storage is actually one of the longest duration, most effective and most cost-efficient types of energy storage that’s on the market today.”
Baker said that FERC’s analysis of the project suggests the Seminoe project represents a $200 million annual savings to ratepayers. Further, according to Baker, FERC has suggested, the “absence of this project carries with it its own set of impacts: reduced resource adequacy, higher cost to ratepayers, and the likely need to pursue other projects that may impose greater environmental impacts or plans to the state.”
Hicks objected to the notion that the project will enhance electrical availability or affordability in Wyoming, noting that the state is a net-electrical exporting state, and that rPlus Hydro is relying on federal tax credits to help finance the project.
Despite those facts, Baker responded, the energy storage function does improve reliability and affordability throughout the western grid, including Wyoming. The project, he said, “does not consume serious amounts of water.
“The water,” he added, “will be protected. The fish habitat will be protected. Casper will still have the opportunity to use it as drinking water. Irrigation will still occur. The project will not affect Wyoming’s waters.”
Several people, including local elected officials, Trout Unlimited and local businesses, took issue with Baker’s claims, citing what they say is a flawed federal review process that hasn’t dutifully tested the company’s claims or considered locals’ concerns.
“I think what concerns me the most about this project is the precedent that it sets,” said CiCi Oliver of the Ugly Bug Fly Shop in Casper, which employs 45 people and is dependent on the North Platte River fishery. “This proposal requires exemptions from existing land use and wildlife protections in order to move forward. It is my belief that if a project only works by loosening protections that were specifically created to safeguard habitat and sensitive resources, then perhaps it is not suited for the location in the first place.”
What now?
The FERC is the primary permitting agency for the project because of its reliance on federally managed water storage reservoirs and hydroelectric systems on the North Platte River. That’s a source of heartburn for many stakeholders, including state regulatory agencies, according to Thursday’s testimony.
Members of the Travel Committee lamented that the Legislature doesn’t have a direct role in setting terms for the project. But it concluded that rPlus Hydro and FERC did not meet expectations to engage with locals during the permitting review process, which was initiated some five years ago.
So what can state lawmakers do?
There are still permitting steps where the Legislature can exert its influence, committee leadership noted.
The federal Bureau of Land Management is a cooperating agency for the project, and agency officials noted that when the FERC issues its final environmental impact statement — expected in June — they may request an amendment process if the BLM is not satisfied with natural resource protections. Wyoming Game and Fish also has an influential say in whether it is satisfied with the FERC’s final review.
Plus, others noted, the project still must go before Wyoming’s Industrial Siting Council for approval.
The committee’s cochairs suggested drafting a letter to Wyoming’s congressional delegation, as well as FERC and other permitting agencies, imploring them to address concerns expressed by Wyoming stakeholders. The committee approved that idea in a unanimous vote.
For more than a decade, the Ruby Pipeline has carried natural gas across the West, cutting through northern Utah with little public attention.
Now, the 683-mile pipeline has been thrust into the spotlight after developers touted it as a key piece of a project that could turn a remote Box Elder County valley into one of the nation’s largest energy and data center hubs.
State backers and developers have described the pipeline as a “catalyst,” saying it could fuel on-site natural gas generation needed to power energy-intensive artificial intelligence facilities at a proposed “hyperscale” data center and energy campus backed by celebrity investor Kevin O’Leary and Utah’s Military Installation Development Authority.
The data center project, however, has quickly drawn widespread opposition across the Beehive State, fueled by concerns over what the project could mean for air quality, water resources and the already stressed ecosystem around the Great Salt Lake.
The pipeline’s renewed attention comes years after the company that owned it filed for bankruptcy following the expiration of long-term shipping contracts, court records show, and a financial downturn that reshaped how much of its capacity was being used.
However, Vladimir Dvorkin, a power systems professor at the University of Michigan, said the massive data center project could effectively breathe new life into the pipeline by tapping some of its unused capacity.
Dvorkin said the pipeline has been underutilized over the years, but it “looks like the data center project is sort of a revival of this project.”
What is the Ruby Pipeline?
The pipeline stretches across the high desert from the Opal natural gas hub in southwestern Wyoming, crossing northern Utah’s remote rangelands and Nevada before ending in Malin, Oregon, a major hub for energy trading in the West.
It relies on four compressor stations along its route, including the Wildcat Hills station in western Box Elder County.
Built during the shale gas boom, the pipeline entered service in 2011 and was hailed as a major piece of Western energy infrastructure. According to the U.S. Energy Information Administration, it increased the region’s capacity to move natural gas west by more than 50% and expanded delivery into northern California.
The 42-inch interstate pipeline can transport up to 1.5 billion cubic feet of natural gas per day, according to the federal agency.
Debts pile up
But the economics that once supported the Ruby Pipeline began shifting soon after it was built.
In 2022, Ruby Pipeline LLC — the company that owns the pipeline — filed for Chapter 11 bankruptcy because it didn’t have enough cash to pay off $475 million in debt, according to bankruptcy court filings.
Ruby Pipeline was a joint venture between energy infrastructure giant Kinder Morgan and Calgary-based pipeline operator Pembina Pipeline Corporation.
In bankruptcy filings, Will Brown, vice president of business management for Kinder Morgan’s Natural Gas Pipelines West Region, wrote that market conditions changed in ways the project’s original business model had not anticipated.
When the pipeline was built in 2010, he wrote, the company signed long-term agreements with 12 customers to reserve about 1.1 million dekatherms of natural gas capacity per day — covering most of the pipeline’s capacity.
However, most of those agreements lasted 10 years and expired in July 2021, Brown wrote.
The company struggled to replace those contracts as Western energy markets changed, according to Brown. Growing natural gas production elsewhere drove down prices and weakened demand for Rocky Mountain natural gas, he wrote.
By March 2022, about 40% of the pipeline’s daily capacity remained under contract, Brown wrote. As those contracts expired without replacement customers, the company’s revenue declined, leaving it unable to meet upcoming debt obligations.
Later that year, Tallgrass Energy agreed to buy the pipeline out of bankruptcy for $282.5 million, according to court filings. In a court-ordered auction in December 2022, Tallgrass outbid competing offers, including a $276 million bid from a Kinder Morgan affiliate, filings show.
Will the data center raise gas rates?
The project’s backers initially said the first phase, which would be built in Hansel Valley where the pipeline runs through, would require about 3 gigawatts of power, nearly matching Utah’s average statewide electricity use of roughly 4 gigawatts. Amid growing public outrage over the project, Gov. Spencer Cox said developers had agreed to scale the first phase down to 1.5 gigawatts.
At full buildout, Paul Morris, MIDA’s executive director, said the campus would reach 9 gigawatts.
Austin Pritchett, co-founder of developer West GenCo and a partner with O’Leary on the project, said during an April 27 Box Elder County Commission meeting that the pipeline could help supply fuel for on-site natural gas generation to power energy-intensive AI computing facilities.
The data center would tap into some of the pipeline’s unused capacity not currently under contract, Pritchett said. Because of that, he said it should not affect existing gas customers or raise rates.
But Dvorkin, who studies how data centers interact with electrical grids, said tapping the pipeline’s unused capacity could have a broader effect on energy costs.
To generate more power than Utah’s current statewide electricity use, the project could require a substantial amount of natural gas, Dvorkin said. While the Ruby Pipeline may have capacity to move that fuel, he said the question is whether regional supply can keep pace with a major new source of demand.
Rocky Mountain Power’s gas-fired plants draw fuel from the same broader supply network connected to the Opal Hub in Wyoming, where the Ruby Pipeline begins, Dvorkin said.
If a large data center campus begins buying substantial amounts of natural gas, it could increase competition for gas and tighten supply, potentially pushing prices higher even though the project may never touch the grid, he said.
Those fuel costs, he said, can then be passed on to customers through electricity and heating bills.
“It feeds Oregon, California and Nevada’s gas utilities, meaning that the presence of such a large consumer in Utah will also affect gas prices for everyone downstream the pipeline,” Dvorkin said.
However, Dvorkin said any rate impacts depend on future gas production, how the gas is contracted and how much fuel the project ultimately uses.
While project backers have said the development would rely completely on the Ruby Pipeline to supply natural gas for on-site power generation, Gov. Spencer Cox said last week that the project would “never” run solely on natural gas and that later phases should incorporate other energy sources, including nuclear, geothermal and solar power.
-
Vermont4 minutes agoWith two major vacancies, who will lead the Vermont House and Senate? – VTDigger
-
Virginia9 minutes agoNetflix casting Central Virginia singles for “Love on the Spectrum” after Danville man joins show
-
Washington15 minutes agoAs an AI tech-hub, Washington must lead with conscience
-
Wisconsin21 minutes ago
Wisconsin National Guard troops return after yearlong deployment in Middle East
-
West Virginia28 minutes agoWheeling launches West Virginia’s first recovery housing program for young adults
-
Wyoming34 minutes ago
Critics oppose Wyoming hydroelectric project, pointing to climate-driven drought crisis
-
Crypto40 minutes agoStablecoin Settlement Is Here, but Seamless Off-Chain Money Movement Is Not | PYMNTS.com
-
Finance45 minutes agoEvoke Entertainment Closes $35 Million Production Financing Facility Backed By Major Private Credit Fund
