The West Virginia House Energy and Manufacturing Committee advanced a bill Tuesday that would require coal-fired power plants owned by public electric utilities to keep at least 30 days of coal supply under contract for the lifespan of those plants.
Senate Bill 542, which now goes before the full House of Delegates, also would require public electric utilities to give notice to the West Virginia Office of Homeland Security and Emergency Management, the state Public Service Commission and the Legislature’s Joint Committee on Government and Finance before announcing the retirement or proposed shutdown of an electricity-generating unit.
The legislation is a gutted version of the original bill that would have made further-reaching reforms to keep West Virginia’s dwindling fleet of coal plants operating as long as possible. Those reforms included requiring in-state power producers to maintain 2019 coal consumption levels and file compliance plans every three years with the long-dormant state Public Energy Authority specifying their fuel supply and how 2019 coal consumption levels would be maintained.
FirstEnergy representative Sammy Gray told the committee the requirement to keep at least 30 days of coal supply under contract is in line with the amount the electric utility already keeps under contract.
The original version of the bill required a 90-day supply, which West Virginia Coal Association President Chris Hamilton told the committee Tuesday was the maximum he would suggest. But the required supply was shortened to come closer to what representatives from Appalachian Power, FirstEnergy and Dominion Energy previously told the Senate Energy, Industry and Mining Committee they currently keep under contract.
SB 542 states that public electric utilities in West Virginia “should be encouraged” to operate coal-fired plants at “maximum reasonable output” and through the end of the lifespan of the plants.
FirstEnergy would take the spirit of SB 542 seriously, Gray said.
“We take anything in the law being encouraged by the state as something they want us to do,” Gray said. “We think that, if it’s in law, even if it’s a suggestion, it’s something that’s a requirement for us.”
FirstEnergy pledged last year to achieve carbon neutrality by 2050 to combat climate change, joining other companies to look ahead to a carbon-neutral economy. FirstEnergy is targeting a 30% reduction in greenhouse gas emissions within the company’s direct operational control by 2030, based on 2019 levels. The company said in November that it will “responsibly operate our existing small generation fleet,” which includes two coal-fired plants in West Virginia.
Gray said FirstEnergy plans to continue operating its plants until the 2040s.
“But, at the same time, we have a commitment to our investors that we will have a reduction [in greenhouse gases] of 30% by 2030 and be carbon-neutral by 2050. So whether it’s a suggestion or it’s a requirement [in the bill], it’s still concerning to us,” Gray said, alluding to the bill’s encouragement for utilities to operate coal-fired plants through their lifespan.
West Virginia Coal Association and United Mine Workers union representatives enthusiastically endorsed the original version of SB 542 to the Senate Energy, Industry and Mining Committee. Representatives from Appalachian Power, FirstEnergy and Dominion Energy, as well as PSC Chairman Charlotte Lane, expressed reservations about the bill.
Appalachian Power and FirstEnergy representatives told the committee the bill was uneconomic and would introduce unnecessary costs for the companies that they would then have to transfer to ratepayers.
Lane said the version of the bill approved by the House Energy and Manufacturing Committee on Tuesday would not burden ratepayers.
West Virginia’s number of coal plants has steeply declined as the U.S. shifts away from coal toward renewable energy. The U.S. Energy Information Administration 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.
Coal used for electricity generation has declined over the past decade, as coal consumption in the United States decreased nearly 15% from 2018 to 2019 and renewable energy consumption rose 1%. Electricity generation from coal in 2019 fell to its lowest level in 42 years, according to the Energy Information Administration.
But in West Virginia, coal-fired power plants still account for almost all electricity generation. In 2019, coal comprised the smallest share of state generation in more than 20 years, and it exceeded 90% anyway.
Hamilton argued that it is important for lawmakers to support the coal industry amid what he called “environmental and social pressures” that imperil the industry.
The Coal Association filed a petition to intervene before the PSC last month after Appalachian Power and Wheeling Power warned in a still-pending rate case that they might close the Mitchell coal-fired generating facility in Marshall County.
The utilities said in a Dec. 23 filing that the Mitchell plant would cease operation in 2028, if the companies choose to retire the plant rather than make an additional investment to ensure that it complies with federal guidelines limiting wastewater to continue operating until the projected end of its useful life in 2040.
“We cannot control what happens in other states or what comes from Washington, with respect to extreme environmental policy or objectives to decarbonize our economy or to transition away from all fossil fuels,” Hamilton said. “But we can control what happens within our state’s boundaries.”
Hamilton acknowledged under questioning from Delegate Evan Hansen, D-Monongalia, that changes affecting the coal industry in recent decades have been driven not necessarily by policy but by the private sector.
Committee members largely endorsed supporting SB 542 and keeping the coal industry operating in West Virginia as long as possible.
“My only regret is that it doesn’t go far enough,” Delegate Dana Farrell, R-Kanawha, said.
Many committee members condemned the country’s move away from fossil fuels and fear its effect on energy reliability, pointing toward Texas’ devastating grid failure in February.
But all sources of power generation failed in Texas amid cold temperatures there, an issue exacerbated by the isolation of the state’s electricity grid. West Virginia had the highest percentage of customers experiencing outages in the country for about a week following the ice storms.
Still, committee members embraced the bill as a tool to help coal miners stay employed and defend coal as an economically vital and viable energy source.
“I wish it went a little further than a 30-day aggregate fuel supply,” Delegate John Mandt, R-Cabell, said.
The Senate passed SB 542 last week.