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Morrisey among petitioners making economic case for keeping Marshall County coal-fired plant open | Energy and Environment

Recent filings in a case before the Public Service Commission of West Virginia in which American Electric Power’s subsidiaries warned that they may close a coal-fired plant show that coal remains a crucial economic engine in the state.

They also hint at how intense the fight will be over West Virginia’s energy future.

Appalachian Power and Wheeling Power said in a Dec. 23 filing with the Public Service Commission that the Mitchell coal-fired generating facility in Marshall County would cease operation in 2028 if the companies choose to retire the plant rather than make an additional investment to ensure that the plant complies with federal guidelines limiting wastewater to continue operating beyond that year until the projected end of its lifespan in 2040.

There were 214 people employed at the Mitchell plant that were compensated a combined $26.8 million in wages in 2020, according to a filing by the utilities last week.

The most recent petition to intervene in the case came from state Attorney General Patrick Morrisey, whose office came to the plant’s defense in a filing last week.

The filing contended that the state has a “significant interest” in the continued operation of the Mitchell plant, noting that its early retirement would result in significant revenue losses for the state and threaten jobs.

“Ensuring [electricity] capacity is fundamental to national security and powering our state’s economy as well as protecting the jobs of hard-working West Virginian utility workers, coal miners and countless others who rely upon their success,” Morrisey said in a statement.

Morrisey’s support for the plant’s continued operation followed letters of support from the Marshall County Commission and an umbrella group comprised of local building construction trades unions and their members.

The West Virginia State Building and Construction Trades Council and the AFL-CIO backed keeping the Mitchell plant open beyond 2028 in a filing last month, citing a joint labor-management committee estimate that the Mitchell plant and two other Appalachian Power plants, the John Amos plant in Putnam County and the Mountaineer plant in Mason County provided more than 4.7 million work hours for union members from 2015 to 2020.

The union noted in its filing that there have been “a significant number” of construction jobs created because construction contractors routinely work on the plants, including routine and seasonal maintenance, equipment upgrades, pollution control device installation and landfill construction.

“The economic impact resulting from these local construction workers spending their paycheck in the local economy creates a multiplier effect which improves the economy for all,” the union stated.

The Marshall County Commission urged saving the Mitchell plant from closure in seven years in its own filing last month, calling the plant “an integral part of the industrial community in Marshall County,” noting that it supplies desulfurized gypsum for the CertainTeed drywall facility in Moundsville and uses the services of hundreds of outside contractors and suppliers, including mines in Marshall and Ohio counties totaling more than 1,300 employees.

The commission recalled the AEP Generation Resources, Inc. retirement of the Kammer coal plant in Marshall County in 2015.

“As a leading energy provider in [West Virginia], the closure of the Mitchell facility in the shadow of the recent closure of the Kammer Plant will do immeasurable harm to not only the hard-working men and women in Marshall County, but could do irreparable harm to current and future economic development efforts being made throughout Northern West Virginia,” the commission asserted in the filing.

The West Virginia Coal Association weighed in with a petition to intervene in the case in February in which it said that the demand for coal mined by its members could be “radically altered by the outcome of this proceeding.”

A Coal Association-commissioned study published last month by the West Virginia University College of Business and Economics Bureau of Business and Economic Research found that coal-fired power generation generated approximately $4.8 billion in total economic activity in West Virginia in 2019, supporting nearly 6,600 jobs even after a decline in state coal production of more than 50% in the past decade.

The utilities said in their initial December filing that they could make modifications to comply with the wastewater rule and a federal rule regulating coal combustion residuals at the Mitchell plant, the Amos plant and the Mountaineer plant in Mason County that would allow each of those plants to operate until 2040.

But the companies report that performing only the coal combustion residual compliance work at Mitchell and retiring the plant in 2028 has “comparable costs and benefits” to making the additional wastewater compliance investment to allow the plant to operate beyond 2028. Replacing a portion of the retired Mitchell capacity with a portion of Appalachian Power’s excess capacity in 2028 would result in savings to West Virginia customers of approximately $27 million annually from 2029 to 2040, the companies said in the Dec. 23 filing.

Rate impact, energy efficiency and environmental considerations will be under heavy scrutiny in the case as consumer and environmental interest groups wary of the costs of keeping the plant operating weigh in.

Appalachian Power and Wheeling Power are seeking permission to perform all of the work at all of the plants, which they estimate would cost $317 million, and listed potential project-related residential, commercial and industrial rate increases of 1.59%, 1.52% and 1.72%, respectively. The proposed increased project-related rates and charges would produce $23.5 million annually in additional revenue, according to the companies.

The Mitchell plant emitted just over 5 million tons of carbon dioxide, just under 1,900 tons of sulfur dioxide and just over 2,000 tons of nitrogen oxides in 2019, per U.S. Energy Information Administration data.

The Consumer Advocate Division of the Public Service Commission, which is statutorily required to represent the interests of residential ratepayers, the West Virginia Energy Users Group and the Sierra Club all previously filed petitions to intervene in the case, as did the West Virginia Citizen Action Group, Solar United Neighbors and Energy Efficient West Virginia together in one filing.

Emmett Pepper, policy director for Energy Efficient West Virginia, blasted Morrisey’s intervention in the case, arguing it ignored ratepayers.

“Their stated intention is to represent the interests of West Virginians,” Pepper said. “However, I didn’t notice anything in there about the ratepayer impact to West Virginians. If they’re going to be ignoring the hundreds of millions of dollars that West Virginian ratepayers are going to have to pay [if the plant stays open beyond 2028], that doesn’t sound like they’re representing all West Virginians’ interests.”

The plant began operating in 1971.

Read More: Morrisey among petitioners making economic case for keeping Marshall County coal-fired plant open | Energy and Environment

2021-04-15 17:30:00

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