'We Deify Coal': WV Lawmakers Doubled Down on Coal in Legislative Session With Energy Transition Poised to Accelerate

 

 

March 19, 2023 - With 15 minutes left in the 2023 regular legislative session, the West Virginia House of Delegates squeezed in approval of one final bill.

It was West Virginia Coal Association-backed legislation that would reboot an economic development office to coordinate federal grant expenses, expand coal assets and come up with an educational program to support the state’s coal industry.

West Virginia Coal Association President Chris Hamilton had supported the measures in House Bill 3303 before a legislative committee in January. As time ticked away on the legislative session, Hamilton wasn’t concerned about HB 3303’s fate. He had assurances it would get through.

“They do a great job managing the clock,” Hamilton said.

HB 3303 turned out to be a fitting way for lawmakers to wind down the session.

The Legislature may have approved an appropriations bill to supply $105 million for a Form Energy-planned iron-air battery plant in Weirton over the objections of avowed green energy opponents and raised caps on power purchase agreements in a solar development measure. But lawmakers made clear what their top energy priority was throughout the session.

“I’m probably going to shock some people in here, but I think we deify coal,” Delegate Brandon Steele, R-Raleigh, said in a House floor speech with two days left in the session, a year after Steele led a failed effort to strip enforcement authority away from the state’s mine inspection office. “We have raised coal to a deity in this state. It’s part of our identity. It’s part of what we worship. And that’s a little bit sad.”

Hamilton cited a long list of coal-backed bills the Legislature approved in addition to HB 3303, which would reboot the Coalfield Community Development Office in part to “develop an educational program and policy materials” to “educate the public” about what the legislation says are “economic and societal benefits provided by the coal industry,” including coal-fired electric generation.

On Hamilton’s list was HB 2862, which would target shareholder votes on behalf of a state retirement benefit asset board factoring in environmental, social and corporate governance (ESG) standards viewed as a threat by the coal industry.

The bill championed by Treasurer Riley Moore, a 2024 Republican candidate for the U.S. House of Representatives, breezed through the Legislature despite objections from Investment Management Board Executive Director Craig Slaughter it could cost the state millions.

Also on the list was HB 3270, which would cap how much workers and their families could recover in compensation for noneconomic damages like pain and suffering when their employer is found to have deliberately endangered them on the job.

The cap would be inserted in the state’s “deliberate intent” statute touted by miner advocates as a key defense against dangerous mining operations. HB 3270 also would raise the burden of proof for plaintiffs to recover noneconomic damages from occupational lung disease under state law.

“I think they’re really doing the coal miners wrong,” said former coal miner and National Black Lung Association President Gary Hairston, 68, of Beckley. “Anybody that’s working for a company that they can get away with doing something dangerous and put you in and [you] get nearly killed and they say, ‘This is all we’ll give you,’ that’s kind of tough for a man to swallow.”

Joining HB 3303, HB 2862 and HB 3270 on Hamilton’s list was HB 3308, which would require approval from the Public Service Commission, which includes former Mon Power lobbyist Charlotte Lane and longtime former Coal Association President Bill Raney, for a public electric utility to close any electric generating plant or unit.

Signed into law earlier this month by Gov. Jim Justice, a coal magnate, Senate Bill 609 requires approval from a board he rebooted to develop coal plants for decommissioning or deconstruction of fossil fuel-powered plants. SB 609 requires Public Energy Authority approval for any existing utility or non-utility plant fueled by coal, oil or natural gas to be decommissioned or deconstructed.

“[The Legislature] showed a willingness to turn away from free market principles and use the power of government to pick winners and losers in the energy sector,” said Emmett Pepper, policy director of Energy Efficient West Virginia.

“There’s a reason why these plants are making decisions to close,” Delegate Evan Hansen, D-Monongalia, said in a House floor speech earlier this month. “Why insert government into private decisions by private companies?”

Another bill on Hamilton’s list, HB 3482, would require state officials to identify economically viable sites for coal electric generation projects, an increasingly uneconomic enterprise.

The last coal-fired power plant 100 megawatts or greater built in the United States as of November came online in 2013, according to the federal Energy Information Administration.

Coal comprised 91% of West Virginia’s electricity generation in 2021, far more than any other state.

West Virginia electric bills have ballooned as the state has clung to coal. State ratepayers faced a 90% climb in average residential electricity retail price from 2005 to 2020, according to Energy Information Administration data. Only Michigan had a greater increase by percentage.

The House and Senate both adopted resolutions encouraging Mon Power to purchase the Pleasants Power Station, a coal-fired plant slated to shutter at the end of May that the state bailed out in 2019 through approving $12.5 million in annual tax breaks.

Hamilton suggested last year to the Public Energy Authority that it consider taking on partial ownership of the 1,368-megawatt Pleasants plant. The authority so far has hosted energy stakeholder presentations rather than exercising its broad powers under state code like entering into management contracts to operate electric power and gas transmission projects or taking property through eminent domain.

Energy Harbor, the independent power producer that owns the Pleasants plant, said its closure is required as the company transitions to carbon-free energy.

The PSC issued an order on Dec. 30 requiring Mon Power and Potomac Edison to file a report with the agency evaluating a potential purchase of the Pleasants Power Station by March 31.

“It was a great team effort that involved work to diversify our industrial base while shoring up our coal and foundational industries,” Hamilton said looking back at the session, thanking Justice; Senate Energy, Industry and Mining Committee Chairman Randy Smith, R-Tucker; House Energy and Manufacturing Committee Chairman Bill Anderson, R-Wood; and other legislative leaders.

But as the Legislature passed coal-backed bills that would extend West Virginia’s anachronistic energy status quo, it passed up opportunities to heed ratepayer advocate calls to enable a program federal and local government officials throughout the country said can slash energy costs covered by subscribers.

As of December, 22 states had policies supporting that program, community solar.

Community solar is a setup in which customers receive solar energy without having to install their own system, typically benefiting from energy generated at an offsite array.

Community solar’s West Virginia supporters said it would open up affordable renewable electricity to low- and moderate-income customers and extend the benefits of solar to people unable or unwilling to have solar arrays installed where they live.

“Many state representatives talk about new industry coming to West Virginia and growth patterns that bring surplus, but what’s in it for the people of West Virginia if we’re not looking at new alternatives to energy?” NAACP West Virginia President Darryl Clausell said during a news conference at the state Capitol held to rally support for community solar late in the session.

Lingering power struggles

Coal production resulted in $5.5 billion in direct economic output in 2021, according to a West Virginia Coal Association-funded study published by the West Virginia University College of Business and Economics last year. The industry is still vital to dwindling tax bases throughout the state.

But lawmakers focused more during the session on what they contended were grid reliability advantages from coal over natural gas and renewable energy sources.

“I’m going to do my part to keep the coal plants running just so we’re there to pull your butt out of the sling when something like this happens,” Smith, a coal miner, told Mid-Atlantic power grid operator PJM Interconnection’s Asim Haque after a grid stability presentation by Haque to Smith’s committee during a weekend storm that threatened the grid over Christmas weekend.

But Haque said coal was responsible for roughly 16% of outages during a period of instability amid the storm, second-highest among generation fuel types well behind natural gas. PJM said last month that wind and solar resources performed as near-term forecasts projected, even as an extremely high rate of generation-forced outages emerged that PJM didn’t expect.

Meanwhile, West Virginia’s reliance on coal hasn’t kept the state from having some of the worst electric reliability figures in recent years.

The state finished dead last in reliability and overall performance in a ranking of electric utility performance among all states released last year by the Citizens Utility Board, an Illinois consumer advocate group.

Appalachian Power’s West Virginia coverage area ranked in the highest 3% of all 958 listed utilities nationwide in outage minutes per year and outage minutes per interruption, as well as the highest 9% in non-momentary electric interruption frequency in 2021, according to U.S. Energy Information Administration data.

Appalachian Power failed to meet a minimum target approved by the PSC for the average minutes it takes to restore non-momentary electric interruptions in 2021, according to a report it filed last year with the commission.

Equipment failure was responsible for more than 4,100 sustained interruptions in 2021, the second-most common cause behind only trees outside rights-of-way (over 4,700).

Gas kept apart from coal

Just three weeks into the session, the Senate passed a bill in SB 188 that would direct the Department of Economic Development secretary to identify and designate sites deemed suitable for natural gas electric generation projects.

But the bill stalled for weeks in the House, where HB 3482, the bill that would mandate the same process for coal electric generation projects, was subsequently introduced, passing the House before the body approved SB 188.

The House nearly diluted SB 188 by taking out legislative findings that Hamilton feared would be used to establish that natural gas is the state’s preferred fuel for generating electricity and merging it with HB 3482.

“We’ve got to push our coal if we’re looking for stabilization,” Delegate D. Rolland Jennings, R-Preston, said during a House floor speech in support of merging the bills.

SB 188 asserts that production of electricity using natural gas is “highly underdeveloped” compared to nearby states competing for economic development projects. The bill holds that advancement of technology and drilling practices have opened up “opportunity for efficient development of natural gas” in West Virginia.

The Republican-supermajority House voted 53-41 against merging the bills, a vote count that nonetheless showed how much lawmakers value coal, even with West Virginia being the nation’s fourth-largest producer of marketed natural gas.

But natural gas fueled just 4% of the state’s net electricity generation in 2021, far below the national clip of 38%.

Gas and Oil Association of West Virginia Executive Director Charlie Burd called SB 188 “a giant step forward” that would give “a much-needed signal that West Virginia is open for business.”

Other fuel sources weren’t a good fit for the industry-crafted bill, Burd said, because of the bill’s intent for West Virginia to rival surrounding states in natural gas plant presence.

Derrick Price Williamson, executive director of the West Virginia Energy Users Group, a coalition of large industrial power users, welcomed SB 188 as a “step in the right direction” that would allow West Virginia to better “fulfill an all-of-the-above energy production strategy” through natural gas power.

But Williamson has been critical of SB 609, the new law requiring Public Energy Authority approval to decommission power plants.

“Make no mistake, electric cost increases have had, and will continue to have, an adverse effect on West Virginia manufacturing and industry and a disproportionate adverse impact on senior citizens with fixed incomes and those in poor, rural areas of the state,” Williamson said. “But the more we engage the free market to work in the electric power production sector without artificial supports or barriers, the better off consumers and the West Virginia economy will be.”

Another rate hike request

Just four days after the close of the legislative session, Appalachian Power and Wheeling Power asked the PSC for another rate increase. If approved, the monthly bill for a residential customer using 1,000 kilowatt-hours would increase by $1.23, or 0.76%.

The request comes a month after the PSC denied the companies’ request for a $297 million increase in annual fuel cost recovery until its staff finishes a review that began in May 2022 to determine whether the companies’ policies for maintaining adequate fuel inventory levels are prudent. If approved, that request would raise the monthly bill for a residential customer using 1,000 kilowatt-hours by $18.41.

Since the start of 2017, Appalachian Power has received 14 rate increases raising the average monthly residential rate from $128.09 effective March 2019 to the current rate of $162.43, according to the company. Over half of that $34.34 increase, or $18.70, has consisted of fuel cost recovery.

The same day as Appalachian Power and Wheeling Power filed their rate hike request, the Environmental Protection Agency announced its final “Good Neighbor Plan,” a rule designed to slash power plant pollution.

FirstEnergy has indicated the Good Neighbor Plan could substantially impact its coal-fired Fort Martin Power Station, in Monongalia County, given the plant’s lack of selective catalytic reduction equipment used to address nitrogen oxide emissions targeted by the EPA rule. The Fort Martin plant is slated to operate until 2035.

A new report from the National Renewable Energy Laboratory projects wind, solar and storage deployment more than doubling historic maximum annual deployment rates and clean electricity surpassing 80% of total generation by 2030.

FirstEnergy spokesperson Hannah Catlett said Thursday the company is evaluating the Good Neighbor Plan to determine what effects it may have on its generating plants.

As market forces and implementation of federal legislation accelerate the energy transition, Hamilton has a positive evaluation to report.

“All in all, it was a productive legislative session,” Hamilton said.