Colorado state legislator Chris Hansen read the handwriting on the wall.
“We were going to be done with coal in the state of Colorado by the late 2020s,” Hansen recalled. “That is sort of in motion now and is irreversible, and we needed to be ready for that.”
So in 2019, Hansen and other Colorado state lawmakers approved the Colorado Office of Just Transition, an office charged with developing and implementing a statewide plan to help workers and communities diversify their economies as they brace for coal-fired power plant closures.
West Virginia climate groups held a webinar Tuesday night to learn from Hansen about Colorado’s plan and consider how West Virginia can navigate its own energy transition — one likely to be steeper than Colorado’s given that West Virginia’s economy is significantly more carbon-intensive.
“I can only imagine what it’s like in West Virginia,” said Hansen, a Democratic state senator who noted during a PowerPoint presentation that coal comprised just 37.7% of Colorado’s net electricity generation in February 2020 — much less than the 91% of West Virginia’s net electricity generation that coal-fired electric power plants were responsible for in 2019.
But another Hansen who participated in Monday night’s webinar sees promise in Colorado’s example for West Virginia nonetheless.
“It shows what can be done,” West Virginia Delegate Evan Hansen, D-Monongalia, told the other Hansen, who is no relation. “You’re a few years ahead of where we are in West Virginia, so it’s nice to have models like that where we can model legislation based on what you’ve done and also learn from how that legislation has panned out after it’s been passed.”
Colorado’s Hansen noted that state lawmakers supported the Just Transition Office in the 2021 legislative session there by approving $15 million in one-time funding for just transition programs and providing additional funding for such programs through the elimination of coal severance tax breaks.
In stark contrast, the West Virginia Legislature in 2019 enacted a steam coal severance tax reduction from 5% to 3% that the state Department of Revenue estimated that year would cost the state $64.1 million annually starting in fiscal year 2021.
The Just Transition Office was formed with a budget of slightly more than $150,000.
Colorado’s Hansen noted a 2019 law that he and other state legislators passed authorizing state utility regulators to securitize the remaining capital value of retired coal plants.
“That, of course, is one of the biggest challenges for any state, is what do you do with the stranded asset problem?” Hansen said. “You’ve got this coal plant that might be halfway through its life or less, and what do you do with all of that residual capital that is currently on the books for the regulated utility? And sort of on the hook is the ratepayer.”
Hansen suggested using ratepayer-backed bonds to pay off stranded coal assets, saying that they are cheaper than using utility financing due to lower interest rates and generate ratepayer savings that can then be used to lower power costs, pay for new generation assets and reduce rates or retrain workers displaced by coal plant and mine closures.
“Of course, it’s a much easier political conversation when you talk about, how do we share the savings pie as opposed to who gets charged more for an energy policy change,” Hansen said. “And I think that’s one of the things that really makes this nonpartisan. This is just a spreadsheet exercise.”
The Colorado Just Transition Office released a plan Dec. 31 to help coal communities and workers make a prosperous transition away from coal.
The 20-page document pledges the office will establish state action teams to work with communities in 11 counties that have lost 50 or more jobs from a coal mine or plant closure.
The plan notes that a state economic development office waived local matching fund requirements for a job growth incentive program for companies locating in coal transition communities and committed at least $500,000 for grants to attract new businesses to those communities or help grow existing businesses there.
In the 2021 legislative session, a bill that West Virginia’s Hansen modeled after Colorado’s plan never made it out of committee. It would have created a coal community comeback plan for West Virginia crafted by an advisory committee composed of state lawmakers and economic development agency leaders, utility and union officials and representatives of workers laid off from coal-related jobs.
Delegate Ed Evans, D-McDowell, introduced an amendment to another bill adding the coal community comeback plan from Hansen’s failed legislation.
On the last day of the legislative session in April, after the House passed Evans’ amendment by a single vote, the Senate squashed it. The bill went back to the House, which approved it without the coal community comeback plan.
But in June, state legislators announced a work group to come up with proposals to economically revitalize struggling coal communities across the state.
The group has made plans to visit Logan, Welch, Moundsville, Montgomery, Morgantown and Beckley, where they will disperse into breakout groups to discuss topics related to revitalizing coal communities this fall.
“Be on the lookout for these opportunities to participate in these listening sessions that will take place in September and October this year,” West Virginia’s Hansen said.
The webinar was sponsored by the West Virginia Center on Climate Change, the West Virginia College of Law Center of Energy and Sustainable Development, and the West Virginia Climate Alliance.
“I hope there’s a few things we’ve done in Colorado that might be useful in other places,” Colorado’s Hansen said. “ … [These] financial tools are really about saving customers money and, oh, by the way, we can decarbonize as we do it.”