A newly reformed and potentially powerful West Virginia board will hold its first meeting next week to promote fossil fuel development after a decade of dormancy.
Rebooted with new appointments by Gov. Jim Justice in August, the Public Energy Authority will meet Wednesday to organize and consider possible discussion topics for future meetings, according to the meeting’s agenda.
The authority board will meet from 10 a.m. to noon in the first-floor large conference room inside Building 3 at the state Capitol Complex.
A notice for Wednesday’s meeting states that the Public Energy Authority will “help coordinate the output of merchant plants with capacity needs of regulated plants” in addition to “assist[ing] in developing the next generation of coal plants and long-term energy policies that use all of West Virginia’s resources.”
The board went dormant in the 2010s, even though state code gives it broad powers that include buying, leasing and issuing bonds to build electric power or natural gas transmission projects, and representing the state regarding “national initiatives” and “international marketing activities” that concern the mineral development industry.
The authority has the power to enter into management contracts with second parties to operate any electric power, gas transmission or other related energy project, either during construction or permanent operation. It can finance electric power or natural gas transmission projects by making secured loans to provide funds to buy or build those projects. It can also take property through eminent domain.
“I’m probably like everybody else, I’m anxious to kind of see where we think we might be headed with the authority,” board appointee and Gas and Oil Association of West Virginia Executive Director Charlie Burd said.
Burd opined that, if the Public Energy Authority chose to develop a state energy plan, an “all of the above” energy approach would make sense, echoing Sen. Joe Manchin, D-W.Va., the chairman of the U.S. Senate Energy and Natural Resources Committee who has held that the nation should balance fossil fuel and renewable energy investments.
That approach has frustrated environmental and climate advocates, who say that a far more aggressive stand against fossil fuel development is needed to fend off the worst effects of climate change accelerated by fossil fuel industry greenhouse gas emissions.
“With all of the activity now with all the various energy sources gaining traction in the state, a kind of all-of-the-above energy scenario, if I can quote the senator’s words,” Burd said. “He’s always saying ‘all of the above.’ I think that probably makes sense for us.”
Justice’s appointees to the board were Burd, a Republican; West Virginia Coal Association President and Republican Chris Hamilton; retired West Virginia Division of Energy director and Democrat Jeff Herholdt; and Jeffery Allen, a Republican and senior vice president at Pardee Resources Co., a Philadelphia-headquartered business that invests in natural resource properties.
However, Hamilton and Herholdt resigned from the board on Oct. 12 and Feb. 5, respectively, according to the Governor’s Office. Governor’s Office spokesman Jordan Damron said Wednesday that Justice is considering appointments to the seats.
The seven-member board also consists of the secretaries of the state departments of Commerce and Environmental Protection, and the director of the Economic Development Authority, per state statute. The board is chaired by the Department of Commerce secretary, a position currently held by Ed Gaunch.
In an email to Gaunch, Herholdt recalled that his past work on the Public Energy Authority, when Manchin was governor, “was to conduct meetings on renewable energy.”
“I had assumed incorrectly that the focus on renewables would remain the same,” Herholdt wrote. “I apologize for not bringing this to your attention earlier. I feel I need to excuse myself from this appointment.”
Hamilton attributed his resignation to recently expanded responsibilities with the Coal Association.
Justice’s reactivation of the board might have violated state code stipulating that no more than two governor appointees may be employed by or associated with any industry the authority is empowered to impact.
Allen works at a Scott Depot branch of the company, according to a member’s information sheet Allen signed last February declaring his interest in Public Energy Authority board membership.
But Allen wrote on his member’s information sheet that he was not employed by or associated with any industry the authority is empowered to affect, even though the Public Energy Authority is statutorily designed to focus on natural resource properties — something that Pardee Resources invests in.
A letter from Justice to Secretary of State Mac Warner from last year said Burd and Hamilton are employed by or associated with industries that the authority is empowered to affect but did not say that about either Allen or Herholdt.
In addition to prohibiting more than two appointees on the board who may be employed by or associated with industries that the authority may impact, state code also requires that one have “significant experience in the advocacy of environmental protection.”
The member’s information sheet signed by Allen asserts that he does have significant environmental protection experience.
Allen is senior vice president of acquisitions, development, coal and minerals at Pardee Resources. He also served on the Coal Association’s board of directors, until resigning from the board last year.
Allen is responsible for evaluating natural resource acquisitions, developing natural resource properties and managing the company’s coal and mineral division, according to Pardee Resources’ website. He also serves on the board of directors of the West Virginia Land and Mineral Owners Association and West Virginia Land Stewardship Corp., according to the company website.
No more than three of the governor’s appointees may at any one time belong to the same political party.
The new appointees will serve staggered terms, per state code. Burd’s term lasts the longest, ending June 30, 2025. Allen’s term ends June 30, 2024. The term that Hamilton resigned from ends June 30, 2023, while the term that Herholdt resigned from finishes June 30, 2022.
West Virginia is the nation’s fifth-largest energy producer, ranking second in coal production and fifth in natural gas production in 2020, according to the U.S. Energy Information Administration.
Those who see coal as a viable part of West Virginia’s long-term energy future cite recent estimates by John Deskins, director of the West Virginia University Bureau of Business and Economic Research, finding coal-fired power generation supports $4.8 billion in state economic output, $725 million in employee compensation and $97.3 million in tax revenue.
But West Virginia’s power generation is out of step with the nation’s energy transition.
Coal accounted for less than one-fifth of the nation’s net electricity generation in 2020, compared to 88% in West Virginia. State ratepayers are paying for that imbalance. They faced a 90% increase in average residential electricity retail price from 2005 to 2020. Only Michigan had a greater increase by percentage.
Wholesale and retail power prices have been buffered from the effect of higher prices for coal elsewhere by fuel-switching to natural gas and renewable fuel, according to a 2021 electricity price trend analysis published by the U.S. Bureau of Labor Statistics. Prices have risen at a faster rate and remained at higher levels in regions with higher shares of coal.
The carbon intensity of West Virginia’s economy — metric tons of energy-related carbon dioxide per dollars of gross domestic product — was second-highest in the country in 2018, behind only Wyoming and nearly as much as Kentucky, Ohio and Pennsylvania combined.