Utility regulators in Kentucky and Virginia have decided their states’ residents will no longer subsidize coal-fired power plants in West Virginia. That could be a problem.
Last week, the Virginia State Corporation Commission denied Appalachian Power’s request to increase rates in that state to pay for wastewater treatment upgrades at the John Amos Power Plant in Putnam County and the Mountaineer Power Plant in northern Mason County. Not making the upgrades could force the plants to close in 2028 instead of in 2040, which is the projected end of their economic lives, Appalachian Power has said.
Appalachian Power wanted its customers in Virginia to cover the cost of about $60 million of those improvements.
Earlier, Kentucky regulators denied a similar request for Kentucky Power customers to pay part of the cost of similar improvements at the Mitchell Power Plant in Marshall County, West Virginia.
The West Virginia Public Service Commission has already approved rate increases to cover West Virginia customers’ share of upgrades at all three plants.
In an email to HD Media’s Mike Tony, Appalachian Power spokesman Phil Moye said the company had not yet decided what its next step will be.
For years West Virginia has exported its coal-fired power to neighboring states, but coal has fallen out of favor among various constituencies for many reasons. Other states are not as reliant on coal and coal-fired electricity as West Virginia is, and they are less likely to have their residents pay surcharges on their utility bills to keep West Virginia power plants running, especially those burning coal.
West Virginia has been slow to join the trend to alternate fuels. Part of that is because its fleet of coal-fired power plants is new compared to other states, but they’re not new when compared to generation that has come on line elsewhere. While utilities and nonutility generators have been busy building large-scale gas-fired plants and renewable sources in other states, the same cannot be said about the Mountain State. We have the gas to build new power plants and send the electricity to other states. For some reason private investors have not chosen to do so.
For now, the long-term fate of the Amos and Mountaineer plants has not been determined. Losing either in this decade would devastate the tax bases of their counties and reduce the market for West Virginia coal. But neither can be expected to last forever. Mason County already lost the Philip Sporn power plant near New Haven in 2015, around the time the upper Kanawha Valley lost the Kanawha River Power Plant at Glasgow.
West Virginia’s leaders must do what they can to protect the coal industry and coal-fired electric plants, but they must also look forward to the next generation of power plants and provide an economic environment that encourages their development. So far their efforts in this have been too few, assuming they have existed at all. The recent decisions of Kentucky and Virginia regulators should be a warning.