Coal Supply Problems Persist, Appalachian Power Tells PSC

Appalachian Power executives testified that they’re still having problems getting coal for their West Virginia power plants.

The West Virginia Public Service Commission held an evidentiary hearing Tuesday and Wednesday. Appalachian Power is seeking approval to recover nearly $300 million from ratepayers.

Last year, the price of natural gas and coal rose sharply worldwide. The company then had problems getting coal for its three West Virginia power plants.

The company testified that it had to make tough choices. It could burn through its coal supplies in the fall and risk running out during the peak winter months. Or it could conserve the coal and purchase power from the grid to supply its customers.

It purchased power, which was costly. John Scalzo, vice president of regulatory and finance for Appalachian Power, told commissioners he couldn’t find enough coal to run the plants instead.

“I’ve been pounding the pavement for the last year,” Scalzo said. “That coal does not exist. It’s not like we’re not trying to run or trying to get it. It’s just not there.”

Scalzo added that the fortunes for the coal industry “turned on a dime” last year and could not meet the demand.

Of the three West Virginia power plants – John Amos, Mountaineer and Mitchell – only one, Mountaineer, is currently operating, the company told the PSC.

Scalzo testified that the other plants would be running more if coal were available to run them. He also said the company’s decarbonization goals were not behind any outages at the plants.

“If we had more coal, we would have run the units more, when they were available. There’s no doubt in my mind,” he said. “There’s no carbon goal here. I’m a simple accountant. I would run the units if they were economical if I had coal. Because that’s the best thing for the customer.”

Appalachian Power is suing one of its largest coal suppliers, American Consolidated Natural Resources. Last week, it filed a new lawsuit against ACNR in the New York State Supreme Court in Manhattan.

That follows another lawsuit in Columbus, Ohio, in June, seeking $45 million in damages over missed coal deliveries.

Scalzo and others testified that ACNR failed to deliver more than 1 million tons of coal under contract in 2021 and 2022.

ACNR has filed a countersuit, also in Columbus, Ohio.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.