By Max Garland
July 2, 2018 - While the energy industry awaits specifics on President Donald Trump’s plan to bail out struggling coal and nuclear plants, one coal waste plant in Marion County, West Virginia is hoping to stay open through state-level proceedings.
The Grant Town Power Plant is at risk of shutting down as its owner, American Bituminous Power Partners, has been teetering on the verge of bankruptcy, according to company filings with the state Public Service Commission.
Grant Town Power Plant
The PSC denied in May the company’s proposal to increase its electric energy purchase agreement (EEPA) with FirstEnergy company Mon Power from $34.25 per megawatt hour to $40 per megawatt hour, which would have bumped up customer rates, so it could have a better chance at staying open.
“Further ... given the current energy market in [regional electric grid operator] PJM and AmBit’s financial condition, it is unlikely that AmBit will be able to emerge from bankruptcy as a going concern or be acquired by another entity without an amendment to the capacity rate under the existing EEPA,” said American Bituminous in its initial filing on the proposal.
The PSC did, however, order to keep the company’s EEPA rate the same — and keeping customer rates the same as a result — to allow American Bituminous “an opportunity to continue to operate while renegotiating its business structure in order to avoid bankruptcy.”
But if that order sticks remains to be seen, as the independent staff of the PSC petitioned the commission to reconsider and “provide proper cost protections for Mon Power’s ratepayers.”
“It is significant that none of the customer groups support the amended EEPA — not the Consumer Advocate Division which represents the interests of residential and small commercial customers, not the West Virginia Energy User’s Group which represents the interests of large industrial customers and not the Staff of the Commission which represents the interests of all customer groups,” the staff’s filing said in response to the PSC order.
Additionally, Appalachian Mountain Advocates, on behalf of the Sierra Club, filed an appeal in the West Virginia Supreme Court of Appeals on June 4 that argued the PSC’s order “contains legal errors,” per a news release.
The Sierra Club has staunchly opposed the Grant Town plant’s EEPA, noting testimony from the state Consumer Advocate Division that said payments to the plant passed on to Mon Power customers “exceeded the market price of power by over $56 million” over a less-than-four-year period.
“In approving the pass through of the cost of buying power from an outdated, dirty coal-plant, West Virginia’s PSC has shown that it favors bailing out corporate polluters over prioritizing West Virginia ratepayers and local economies,” Justin Raines, chair of the West Virginia Chapter of the Sierra Club, said in a statement.
The 80-megawatt plant, located at the site of the former Federal No. 1 mine, sells all of its energy to Mon Power under its current agreement.
The plant burns waste coal from abandoned mines, consuming about 565,000 tons annually. It employs around 98 people full-time.
American Bituminous has been in rough financial shape of late, saying in a March 2017 filing that it would owe an estimated $18.5 million to creditors in October.
The company hopes a higher EEPA will improve its outlook. Currently, American Bituminous is selling at $27 per megawatt hour while the PSC and court challenges get underway — a “very low” rate to sustain the plant, said Herb Thompson, manager of support services at the plant.
“We’re cutting spending, doing all we can to keep ourselves afloat while waiting for the PSC or the state Supreme Court. ... We figure it may take a while,” he said.
A court hearing has been scheduled for October but will likely be rescheduled due to the PSC’s pending ruling on a motion for reconsideration, said Bridget Lee, a staff attorney for the Sierra Club, in an email.
Thompson said the Trump administration’s order to stop unprofitable coal and nuclear plants from closing is “very preliminary,” but added that the plan could be a lifeline if it applies to waste coal plants like the Grant Town Power Plant.
“If the intent is to stabilize baseload coal facilities, we would say, ‘Look, that would apply to us,’” he said. “We would hope that there’s some way that this benefits us as well.”
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