Virginia state utility regulators have denied Appalachian Power’s request to approve upgrades required to keep two West Virginia coal-fired generating plants compliant with wastewater discharge guidelines, further complicating the company’s aim to keep the plants operational through the end of their planned lifespans in 2040.
Appalachian Power had requested in December that the Virginia State Corporation Commission approve cost recovery for retrofits at the John Amos plant, in Putnam County, and the Mountaineer plant, in Mason County, designed to meet federal requirements for both coal combustion residuals and wastewater discharges.
But Virginia regulators on Monday denied Appalachian Power’s proposed wastewater discharge investment costs, for which Virginia’s share was projected to be $60 million.
Not making the wastewater treatment upgrades would require the plants shutter in 2028, per U.S. Environmental Protection Agency rules.
Virginia regulators’ decision comes less than three weeks after the West Virginia Public Service Commission approved a request from Appalachian Power and Wheeling Power to implement and recover costs for upgrades at those two plants plus a third — the Mitchell plant in Marshall County, which is jointly owned by Wheeling Power and Kentucky Power.
But the State Corporation Commission’s jurisdiction also applies when Virginia ratepayers are asked to pay their portion of operation, maintenance and electric output costs of facilities to serve Virginia customers.
The commission found Appalachian Power “has not currently” established that the wastewater treatment investment is “reasonable and prudent from an economic or a resource adequacy perspective.”
But the commission allowed Appalachian Power the option to file again for approval of wastewater treatment costs “should [the company] conclude circumstances so warrant.”
In its ruling earlier this month, the Public Service Commission approved a surcharge for Appalachian Power and Wheeling Power to recover construction costs that will result in an increase of about 38 cents on monthly bills for the average residential customer using 1,000 kilowatts a month starting Sept. 1.
But Virginia utility state regulators’ ruling further calls into question the future of the Amos and Mountaineer plants beyond 2028.
Kentucky utility state regulators similarly rejected a request by Kentucky Power to implement and recover costs for wastewater upgrades at the Mitchell plant near Moundsville.
The Virginia State Corporation Commission did approve a $2.17 monthly increase for the typical Appalachian Power residential customer that will take effect Oct. 1. Cost recovery for Appalachian Power will be adjusted annually to reflect expenses associated with compliance.
Appalachian Power spokesman Phil Moye said in an email the company has yet to decide how it will move forward.
“Our next steps will be to evaluate our options in light of the conflicting Virginia and West Virginia state commission orders, determine the best path forward to meet the resource needs in each state, and return to the commissions if necessary for consideration of our updated costs and plans,” Moye said. “This approach also applies to conflicting Kentucky and West Virginia orders related to our Mitchell Plant.”
West Virginia Coal Association President Chris Hamilton said in an email that the Virginia State Corporation Commission’s decision was reasonable “on first blush,” noting the option remains for Appalachian Power to file again before the commission.
The West Virginia Coal Association has fought hard to keep the plants operating through the end of their planned lifespans in 2040, intervening in the case before West Virginia utility regulators.
Karan Ireland, Sierra Club senior campaign representative for Central Appalachia, applauded the State Corporation Commission for denying Appalachian Power’s request for cost recovery to keep the Amos and Mountaineer plants operational beyond 2028, expressing hope that the company moves beyond fossil fuels like coal to clean energy sources while creating a plan for workers at the plants.
“[T]his is a perfect time for the Company to go back to the drawing board and move forward with a plan to move beyond fossil fuels and engage in serious planning for a clean energy future,” Ireland said in an email.
The Kentucky Public Service Commission approved another plan that Kentucky Power had modeled but deemed less desirable: completing only enough environmental upgrades to keep the Mitchell facility federally compliant and operating through 2028 rather than the end of the facility’s planned lifespan in 2040.
But the Public Service Commission ruled differently from Kentucky or Virginia regulators on the wastewater treatment upgrades.
The Public Service Commission could not be reached for comment on Virginia state utility regulators’ ruling Monday afternoon.
But upon announcing the commission’s approval for implementation and recovery of costs for upgrades at the three plants, PSC Chairman Charlotte Lane said that it was “premature ... to begin abandoning our traditional base load power supply resources.”
The West Virginia utility regulators ruled that if there are changes in ownership or cost allocations that are required by decisions in other states, Appalachian Power and Wheeling Power should bring such changes to the commission’s attention in a future case.
West Virginia utility regulators’ decision disappointed clean energy and ratepayer advocates who want to see the state embrace a clean energy transition to save ratepayers money and lessen the state’s economic reliance on coal.
Coal-fired electric power plants accounted for 91% of West Virginia’s electricity net generation in 2019. But coal accounted for just 23% of the nation’s net electricity generation overall that year, according to the Energy Information Administration.
The average monthly residential bill (as measured by the residential rate for 1,000 kilowatt-hours) for American Electric Power’s West Virginia utilities escalated from $55.28 in 2006 to $138.57 in 2021 — an increase of 150% over 15 years.
Marshall County government and labor leaders had made the case that the region would be economically devastated by an early closure of the plant — something that defenders of coal-fired generation argue would hold true for the entire state if it faces other coal plant closures.
American Electric Power has committed to achieving net-zero carbon dioxide emissions by 2050, with an interim goal to cut emissions 80% from 2000 levels by 2030.