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WV Coal Association jumps into AEP rate case to defend Mitchell coal plant against possibility of closing | Energy and Environment

The West Virginia Coal Association is pushing back against American Electric Power after the company’s subsidiaries warned in a recent rate case that they may close a coal-fired plant.

Appalachian Power and Wheeling Power said in a Dec. 23 filing with the Public Service Commission of West Virginia 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. 

“It’s easy to say, ‘Washington’s making us do this,’” West Virginia Coal Association President Chris Hamilton said. “We’re not convinced of that.”

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

“We want to protect all the good that that plant represents … the industrial job base that it sustains and all the working families that are planning their career path around that plant being in place until 2040,” Hamilton said.

The companies say they could make modifications to comply with the wastewater rule and a federal rule regulating coal combustion residuals at the Mitchell plant, the John Amos plant in Putnam County and the Mountaineer plant in Mason County that would allow each of those plants to operate until 2040. The filing argues that it would benefit customers to ensure compliance at the John Amos and Mountaineer plants and keep them operating until the end of their projected useful lives in 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. 

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 Consumer Advocate Division of the Public Service Commission, which is statutorily required to represent the interests of residential ratepayers in utility rate cases, 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.

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 EIA data. 

“There are intervenors in practically every PSC case we have, and they often bring valuable perspectives and considerations that help inform the decision-making process,” Appalachian Power spokesman Phil Moye said when asked about the Coal Association’s petition to intervene.

There are 185 employees currently at the Mitchell Plant with another 38 providing support services either through AEP internal resources or as long-term contractors, Moye said.

The United Mine Workers Association is wary of the possibility of a shuttered Mitchell plant and the effect it could have on those who work there and those who work at mines from which the plant gets coal.

“It would seem a good thing for the state of West Virginia and AEP to figure out a way forward to not kill all those jobs,” UMWA Phil Smith said.

There have been 10 conventional steam coal plants retired in West Virginia since 2005, and the Mitchell plant is one of only nine left in the state, according to U.S. Energy Information Administration data. 

Wheeling Power and Kentucky Power Company each own 50% interest in the plant, according to the Dec. 23 filing. Those two companies and Appalachian Power are regional electric utilities of Columbus-based American Electric Power. 

AEP has retired or sold nearly 13,500 megawatts of coal-fired generating capacity in the past decade, according to Nick Akins, AEP’s chairman, president and CEO. 

West Virginia’s number of coal plants has steeply declined as the U.S. shifts away from coal toward renewable energy. The EIA last year reported that the nation’s annual energy consumption from renewable sources in 2019 exceeded coal consumption for the first time in more than 130 years, largely reflecting the continued decline in coal used for electricity generation over the past decade, as coal consumption in the U.S. decreased nearly 15% from 2018 to 2019 as renewable energy consumption rose 1%. Electricity generation from coal in 2019 fell to its lowest level in 42 years, according to the EIA. 

But in West Virginia, coal-fired power plants still account for almost all of West Virginia’s electricity generation. In 2019, coal comprised the smallest share of state generation in more than 20 years, and it exceeded 90% anyway. 

Less than 3% of the more than 23,000 operating generators across the U.S. are conventional steam coal facilities, but that clip remains above 20% in West Virginia, according to a Gazette-Mail analysis of EIA’s operating generators as of October. Still, West Virginia’s percentage of operating generators that use conventional steam coal technology has declined nearly 8% in the last five years as the national clip fell by 2.3%. 

That’s the backdrop for the Coal Association’s fight to keep the Mitchell plant open and coal-fired electricity as a mainstay of West Virginia’s power grid.

“We just think it’s incumbent that … everybody that’s affiliated with coal and even our state government stand up and speak for coal right now before we begin to see loss of our production,” Hamilton said. “We may never, ever recover if we allow it to slip by.”

Read More: WV Coal Association jumps into AEP rate case to defend Mitchell coal plant against possibility of closing | Energy and Environment

2021-02-24 18:15:00

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