Reaffirming a decision it had already made in August, the West Virginia Public Service Commission on Tuesday issued an order granting approval for environmental upgrades federally required to keep three in-state coal-fired plants operating past 2028.
This time, though, West Virginia ratepayers will pay more to cover the cost.
The commission granted the request from American Electric Power subsidiaries Appalachian Power and Wheeling Power to make the upgrades at the John Amos, Mountaineer and Mitchell coal-fired generating plants in Putnam, Mason and Marshall counties.
Tuesday’s order was the result of Kentucky and Virginia utility regulators, which share jurisdiction of the plants, blocking the companies’ requests to stay compliant with federal wastewater rules on the grounds that their plans were uneconomic.
The commission’s order approves West Virginia ratepayers picking up a burden of nearly $22 million per year from Virginia and Kentucky customers to pay for the wastewater treatment upgrades.
Federal rules require the companies to shutter the plants in 2028, if they don’t make the upgrades.
The commission’s original order in the case resulted in a rate increase that would add roughly 38 cents per month to the current bill of a residential customer who uses 1,000 kilowatt-hours per month.
Any additional amount that results from Tuesday’s order will require the companies a further proceeding to recover the costs of implementing the upgrades, according to the commission.
“Determining the path forward for these plants is a complex process, and we appreciate the Commission’s recognition of this, and its timely review of updated information in this case,” Appalachian Power spokesman Phil Moye said in an email. “We are evaluating the order and working to determine what other actions need to be taken to move forward.”
The companies initially presented a $383.5 million cost estimate for environmental upgrades at all three plants. They later revised that estimate to $448.3 million and said it was subject to change.
Kentucky and Virginia ratepayers will still pay for their share of covering the cost of upgrades to comply with federal guidelines for coal-combustion residuals, which their states’ utility regulators approved.
West Virginia PSC Chairwoman Charlotte Lane had said the commission would issue an order on the AEP subsidiaries’ request by Wednesday, which was set by the U.S. Environmental Protection Agency for companies to inform a permitting authority whether they intend to make wastewater upgrades.
In this case, that permitting authority is the West Virginia Department of Environmental Protection.
The deadline was set so companies can declare their interest in taking advantage of the wastewater discharge rule‘s exemption for units that plan to permanently stop coal combustion by the end of 2028.
AEP acknowledged that Appalachian Power and Wheeling Power could initially notify the DEP they intend to retire the plants by the end of 2028, then reverse course by the end of 2025, per the rule.
Environmental and consumer groups argue that this path would allow for a less rushed review process. AEP dismissed that course as impractical.
The commission contended that its decision is the most affordable option for state ratepayers, citing AEP testimony indicating that Appalachian Power would have to pay from $3.1 billion to $3.5 billion for replacement capacity at the Amos and Mountaineer plants, of which $1.3 billion to $1.4 billion would be allocated to West Virginia customers.
Wheeling Power would have to pay from $600 million to $900 million for replacement of just its half of the capacity of the Mitchell plant, of which 100% would be allocated to West Virginia ratepayers. Wheeling Power and Kentucky Power jointly own the plant.
The total replacement costs for West Virginia customers if the plants were retired would be between $1.9 billion and $2.3 billion, the commission noted.
West Virginia Coal Association President Chris Hamilton applauded the commission’s order.
“I believe the decision is very well-reasoned and thought out,” Hamilton said.
Hamilton’s predecessor as coal association president, Bill Raney, was appointed to the commission by Gov. Jim Justice in August.
Groups that opposed the AEP subsidiaries’ request bemoaned the order’s effects on ratepayers.
“This is outrageous,” Emmett Pepper, policy director of Energy Efficient West Virginia, said in an email. “The Public Service Commission is, by law, required to balance the interests of ratepayers and utilities, with an eye to what’s good for the overall economy in the state. What we got with this decision is what is overwhelmingly good for utilities at the expense of ratepayers, and benefiting one slice of our economy to the detriment of everyone else.”
Karan Ireland, central Appalachia senior campaign representative for the Sierra Club, called the order a “terrible, terrible decision” for West Virginia ratepayers that would prevent the state from “moving into a clean energy future.”
“[The] decision burdens West Virginia families and businesses, making us responsible for the utility’s poor investments,” Leah Barbor, Solar United Neighbors West Virginia program director, said in a statement.
West Virginia Consumer Advocate Division Director Robert Williams said the division, an independent arm of the commission that represents the interests of utility customers, was still reviewing the order Tuesday evening.
Pepper and Ireland questioned the commission’s economic reasoning for its decision, fearing that state customers will pay for far more capacity than they need.
The average monthly residential bill (as measured by the residential rate for 1,000 kilowatt-hours) for AEP’s West Virginia utilities escalated from $55.28 in 2006 to $138.57 in 2021 — an increase of 150% over 15 years.
The AEP subsidiaries’ proposal drew the ire of ratepayer advocate groups and social service organizations.
Groups opposed to the request included Manna Meal, Covenant House, the West Virginia State Conference of NAACP Branches and MountainHeart Community Services.
“With this decision, the Commission has essentially abandoned its mission to balance the interest of current and future utility service customers with the general interest of the state’s economy and the interests of the utilities, tipping the scales in the favor of the utilities providers and against the West Virginia consumer,” AARP West Virginia State Director Gaylene Miller said in a statement.
Clean energy advocates also opposed the companies’ request.
Fine particulate matter from the three plants contributes to a combined 88 premature deaths per year, according to a Clean Air Task Force analysis based on data from the CO-Benefits Risk Assessment Health Impacts Screening and Mapping Tool, which shows how changes in air pollution from clean energy policies can affect human health.
But union, and local and state government, officials largely lobbied the commission to keep the plants open through the end of their planned lifespans in 2040, arguing that they were too essential to the regional and state economies to shutter early.
The three plants had a combined 585 employees at the end of 2020, according to the companies.
Editor's note: This story has been updated to reflect a change in the Public Service Commission’s estimate of how much its August order issued in this case increased the monthly bill of a residential customer using 1,000 kilowatt-hours per month.