WV Public Energy Authority presses power company about its use of coal – WV MetroNews

The West Virginia Public Energy Authority questioned how American Electric Power approaches burning coal at its power plants in West Virginia.

During a meeting today, a representative of the power company said the timetable is simply to retire three power plants —  John Amos, Mountaineer and Mitchell — by 2040. The power company is allocating more than $600 million to technological improvements to make sure that can happen.

This has been a question swirling in West Virginia for several years. State regulators conducted extensive hearings in 2021 and 2022 about the costs and benefits of modifying the plants to comply with federal environmental regulations.

Just this week, the Public Service Commission authorized Appalachian Power and Wheeling Power — subsidiaries of AEP — to increase a monthly surcharge by $35.6 million so John Amos, Mountaineer, and Mitchell coal-fired electric-generating plants can make internal modifications required by federal environmental standards.

A recurring theme has been whether better handling of coal supplies over the past few years for the Mitchell, Amos and Mountaineer plants could have alleviated financial strain on the companies — and their customers.

AEP, in prior responses and again today before the state Public Energy Authority, stood by its forecasts and coal procurement actions. But AEP has maintained that it was up against post-pandemic supply and demand issues that resulted in significant volatility. Another major factor was a surge in demand brought on by Russia’s invasion of Ukraine.

The power company’s representatives have contended that none of that is evidence that the company intends to get out of using coal any time soon.

At the Public Energy Authority’s meeting today, agency director Nick Preservati started with an overview of the three West Virginia plants and how they have been operating. He noted that the plants had to either upgrade to meet the requirements of two federal statutes or agree to stop burning coal by 2028. The power company sought and received approval for the money required for those upgrades.

Preservati reviewed a PSC expectation for West Virginia power plants to maintain coal inventories at a level to achieve at least a 69% capacity factor.



John Scalzo, the vice president, regulatory and finance for Appalachian Power, spoke in response.  “We’re going to be running these coal plants to 2040,” Scalzo told members of the Public Energy Authority.

He continued, “We’re spending nearly a billion dollars to keep them operating. If there was any goal to close them, why would we be putting a billion dollars into those plants they were going to close or if we had any intention of closing them in the near term. The answer’s no.”

Scalzo reviewed supply challenges in 2021 and 2022. “The coal markets, it’s well known, were rather constrained,” he said of that period. “It was hard to get coal.”

Members of the Public Energy Authority asked a range of followup questions.

James Bailey, the state secretary of Commerce, noted “Those investments being made, those were largely recovered from ratepayers through the PSC rate setting process?” Bailey asked, receiving a response of agreement from Scalzo.

Bailey went on to remark that state agencies have not taken a stance that the companies should take on dramatic measures to maintain its coal-fired power plants.

“I think we all consider AEP to be, generally, a friend to the state, especially when it comes to our economic development effort,” Bailey said. He added that reviews of AEP’s activities should not be “viewed as an attack for some reason. It’s purely to do our duty to make sure our ratepayers and our citizens are being treated in a way that is most economically viable to them.

“To a lot of people, their power bill can be the difference in whether they pay their medical bill or not. So it’s a very important issue that we take very seriously. That’s where this all comes from. it doesn’t come from trying to assert that you should take dramatic measures to prevent unprecedented issues.”