The West Virginia Public Service Commission has scheduled a public comment hearing for Friday morning for a case it reopened earlier this month that could determine the future of three in-state coal-fired power plants.
The commission on Sept. 9 granted American Electric Power subsidiaries Appalachian Power and Wheeling Power’s request to reopen the case and consider making their customers pay millions of dollars more for federally required upgrades at the three power plants after utility regulators in two other states denied those upgrades on grounds that they were uneconomic.
So the three-member panel must now decide whether to approve making West Virginia customers responsible for $48 million annually to cover wastewater compliance work to keep the John Amos, Mountaineer and Mitchell coal-fired generating plants in Putnam, Mason and Marshall counties compliant with federal wastewater discharge guidelines.
That’s the cost recovery Appalachian Power and Wheeling Power asked the state utility regulators to sign off on after Kentucky and Virginia state utility regulators denied the companies’ requests to approve the environmental upgrades.
Not making the wastewater treatment upgrades would require the plants shutter in 2028, per U.S. Environmental Protection Agency rules.
The commission’s public comment hearing will be held from 8 to 9 a.m. Friday at the Public Service Commission building in Charleston. An evidentiary hearing on issues raised in the companies’ petition to reopen the case and responses to it will follow at 9:30 a.m.
The Public Service Commission on Aug. 4 approved the wastewater compliance upgrades, in addition to a surcharge for the companies to recover construction costs resulting in an increase of about 38 cents on monthly bills for the average residential customer using 1,000 kilowatts a month that went into effect Sept. 1.
But Virginia regulators 19 days later rejected Appalachian Power’s proposal for wastewater discharge investment and cost recovery, for which Virginia’s share was projected to be $60 million. The Virginia State Corporation Commission’s jurisdiction applies when Virginia ratepayers are asked to pay their portion of operation, maintenance and electric output costs of facilities to serve Virginia customers.
The Kentucky Public Service Commission had already in July rejected a request by Kentucky Power to implement and recover costs for wastewater upgrades at the Mitchell plant near Moundsville, which is jointly owned by Wheeling Power and Kentucky Power.
The previous estimated revenue requirement for West Virginia customers, if upgrades to comply with both the required effluent limitation guidelines and federal rules regulating coal ash disposal had been approved in all three states, was $23.5 million, or a rate hike of about 1.65%.
Revised estimates if all wastewater treatment work is performed and recovered from only West Virginia customers, along with West Virginia customers’ share of cost burden for coal ash disposal, total $48 million annually — a 3.3% increase that would start in Sept. 2022, Appalachian Power spokesman Phil Moye said.
Rates would be adjusted annually every September as construction progresses, according to Moye.
The utilities say the total cost of compliance work for all three plants to allow them to stay in compliance with the coal ash and wastewater rules is now $448.3 million.
That’s 17% higher than the $383.5 million the companies originally estimated that compliance work would cost in their initial Dec. 23 filing with the Public Service Commission seeking approval for the upgrades.
“We are further into the process and have more accurate numbers,” Moye said in an email.
The public comment hearing was requested by three groups who had intervened in the case after the initial December filing: the West Virginia Citizen Action Group, Energy Efficient West Virginia and Solar United Neighbors.
Those groups are among many organizations and individuals who have filed comments with the commission opposing the Appalachian Power and Wheeling Power request to make the environmental upgrades needed to keep them open past 2028.
Public Service Commission Chairperson Charlotte Lane has said the commission will issue an order by Oct. 13, as requested by the companies, to meet a deadline set by the Environmental Protection Agency for them to inform the West Virginia Department of Environmental Protection.
The deadline was set so that the companies may choose to take advantage of the federal wastewater discharge rule‘s exemption for units that plan to permanently stop coal combustion by the end of 2028.
Following through with that option would require the companies forgo wastewater compliance work and stop operating the plants by the end of 2028.
But facilities that had properly incorporated transfer provisions under the wastewater rule may later be able to transfer out of permanently stopping coal combustion, according to EPA spokeswoman Melissa Sullivan.
That means that if Appalachian Power and Wheeling Power had properly incorporated transfer provisions, they could avoid having to make a binding commitment to bypassing wastewater compliance work by Oct. 13 by initially notifying the DEP that they intend to retire the plants by the end of 2028 and then reversing course by the end of 2025 per the rule.
But Sullivan deferred comment on whether the Amos, Mitchell and Mountaineer facilities had properly incorporated transfer provisions under the wastewater rule to the DEP.
DEP acting spokesman Terry Fletcher said Monday the department had not received any notification of transfer provisions from Appalachian Power or Wheeling Power.
The companies on Monday submitted a filing dismissing West Virginia Citizen Action Group, Energy Efficient West Virginia and Solar United Neighbors arguments that they notify the DEP by Oct. 13 that they intend to shutter the plants to preserve the option of reversing course later.
The clean energy advocate groups say that would give the commission and interested parties more time to consider the companies’ request. But the utilities say doing so would be impractical, partly due to future wastewater compliance deadlines in the plants’ water pollution permits.
The Public Service Commission Consumer Advocate Division, an independent branch of the agency; the West Virginia Energy Users Group, representing large industrial users; and the Sierra Club have also filed objections to the companies’ request.
Those groups have argued the companies have not provided adequate notice to ratepayers, are circumventing due process by asking the commission for a decision on an accelerated timeline, and are unjustified in asking West Virginia ratepayers to bear cost burdens previously allocated to ratepayers in other jurisdictions.
The West Virginia Coal Association submitted a filing Thursday in support of the companies’ petition, contending that economic devastation to the state and the communities surrounding the plants would far outweigh any possible increase in investments and costs to be borne by West Virginia ratepayers.
Kentucky Power spokeswoman Cynthia Wiseman has said the company has no objection to revisiting the operating agreement for the Mitchell plant if West Virginia decides to invest in wastewater treatment improvements at the plant to allow Wheeling Power and West Virginia customers to take full responsibility for all costs that would allow the plant to operate past 2028.
The commission said in-person participation will be allowed at the public comment hearing, and face masks are “encouraged” due to the pandemic.
The agency has asked those who wish to participate via videoconference to email their name, email address and telephone number to Case20firstname.lastname@example.org with the subject line “Public Comment Hearing – Case No. 20-1040-E-CN.”
Those who want to comment but not to participate in the hearing may send a letter to the Executive Secretary, Public Service Commission, P. O. Box 812, Charleston, WV 25323, or submit a comment on the commission website by clicking “Submit a Comment.”
The hearing will be streamed on the commission’s website at www.psc.state.wv.us.