American Electric Power representatives defended their decision to leave the Mitchell coal-fired generating facility’s fate up to state utility regulators in testimony before them Tuesday, even while acknowledging that shutting the facility down 12 years ahead of schedule could save ratepayers more than $300 million over those 12 years.
The utility stayed neutral on whether it should close the facility during the first day of a Public Service Commission evidentiary hearing on its request for approval to make federal environmental upgrades to three coal-fired generating facilities required to keep them operating through the end of their lifespans.
American Electric Power subsidiaries Appalachian Power and Wheeling Power said in a Dec. 23 filing with the commission that operations would cease in 2028 if the companies choose to retire the plant rather than make an additional investment to ensure the facility complies with federal wastewater guidelines.
The utilities did not identify which option they prefer, although they said it would benefit customers to ensure compliance with the wastewater rule and a federal rule regulating coal combustion residuals at Putnam County’s John Amos and Mason County’s Mountaineer coal-fired plants.
Appalachian Power president and chief operating officer Christian Beam didn’t tip his hand during his testimony.
“You don’t think that’s the company’s job to make a recommendation to the commission as to which option it should pursue?” asked Barry Naum, attorney for the West Virginia Energy Users Group composed of large industrial users that filed to intervene in the case.
“I think the company’s job is to present to the commission what the best thing is for our customer,” Beam replied. “But if you look at what the commission is tasked with in the state of West Virginia, they look at more than just the cost to the customer, and so what we’ve done is present to the commissioners what the impact to the cost to our customer is. They can evaluate the other things that they’re responsible for and use that as an input to their evaluation.”
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. The utilities 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 in additional annual revenue, according to the companies.
Beam noted that shutting down the 50-year-old Mitchell facility in 2028 could save ratepayers $27 million annually from 2029 through 2040.
Under cross-examination from West Virginia Coal Association attorney Brann Altmeyer, Beam admitted that American Electric Power doesn’t have a plan to replace the jobs that would be lost if the plant were to close.
Coal Association witness John Deskins, director of the Bureau of Business & Economic Research and associate economics professor at West Virginia University, testified that West Virginia benefits from an economic multiplier effect triggered by coal-fired power generation.
Mitchell employed 214 people at combined pay of $26.8 million in 2020, and Marshall County Commissioner Michael Ferro told the commission during a public comment hearing on the case last week that losing the $2.4 million the Mitchell facility generates in annual tax revenue could cut into county funding for libraries, senior centers and charitable organizations.
But attorneys for environmental organizations pointed out American Electric Power’s pledge to reduce its carbon dioxide emission 80% by 2030 and to net zero by 2050, and Beam said he expects a government-added price on carbon emissions will make it more expensive to generate electricity from fossil fuels in the future.
Beam and fellow American Electric Power witness James Martin, the company’s director of resource planning strategy, noted that even if the Mitchell facility were to stay open beyond 2028, capacity there would drop significantly, meaning the amount of coal mined in Marshall County that the facility burns would decline.
Attorneys for proponents of shutting the Mitchell facility down early argued that that would mean job losses and related economic upheaval are inevitable for Marshall County even if Mitchell stays operational through 2040.
The evidentiary hearing continues at 9 a.m. Wednesday at the commission in Charleston with 10 witnesses from Appalachian Power and Wheeling Power, the Coal Association, the Energy Users Group, the West Virginia Citizen Action Group, Solar United Neighbors, Energy Efficient West Virginia, the Sierra Club, the state Consumer Advocate Division and commission staff scheduled to testify.