Two coal-burning power plants in northern West Virginia need upgrades to stay in operation, and local electricity customers will be asked to pay for them.
Mon Power is seeking approval from state regulators to upgrade wastewater treatment systems at the Fort Martin Power Station in Monongalia County and the Harrison Power Station in Harrison County.
The upgrades will bring the plants into compliance with Environmental Protection Agency rules.
If the West Virginia Public Service Commission approves the project, both plants can remain in operation beyond 2028.
According to the company’s filing, it plans to retire Fort Martin in 2035 and Harrison in 2040. The plants began operating in 1967 and 1972, respectively.
The plants produce about 3,000 megawatts of electricity and consume 7% of West Virginia’s annual coal production. Together, they employ 420 workers.
Starting in 2024, Mon Power customers will pay a monthly surcharge to cover the $142 million cost of the upgrades. It will add 51 cents to the average residential customer’s bill, according to the company’s filing.
Natural gas prices are higher this year, making coal more competitive to generate electricity.
But next year, there are signs coal will continue to decline.
Though West Virginia has saved three power plants from near-term closure, others in Ohio, Pennsylvania and Maryland are scheduled to shut down in 2022.
According to PJM, the regional transmission organization that coordinates power movements across 13 states and the District of Columbia, the Cheswick plant near Pittsburgh will close on April 1, followed by the Morgantown plant in southern Maryland and the Zimmer plant in southern Ohio at the end of May.
All three plants burn coal from West Virginia.
Michael Webber, a professor of energy resources at the University of Texas at Austin, said the power plant retirements will continue.
“You’ll probably see retirements of coal plants on schedule, or ahead of schedule,” he said. “You won’t see many lifetime extensions for the assets.”
Plans by the Biden administration that favor renewable energy to cut carbon dioxide emissions could accelerate coal plant retirements.
That could take the form of a carbon tax. The Environmental Protection Agency might also issue more stringent wastewater rules for power plants.
In 2022, the Energy Information Administration forecasts coal generation will fall again as more plants shut down and natural gas prices come down from their winter highs.
“This probably lasts months, maybe a year and a half or so,” Webber said. “It doesn’t look like it’s going to last decades.”
Webber noted that the price of metallurgical coal is higher than thermal, or steam coal, the kind used to make electricity. It is a more profitable business for coal producers.
“Coal still has a lot of value for metallurgical purposes,” he said, “for making metals, and also for making cement.”
For electric power generation, though, there are cleaner, cheaper alternatives in wind and solar.
Utilities once reliant on fossil fuels are embracing renewables, including West Virginia’s dominant utilities, American Electric Power and FirstEnergy.
Coal will have a good winter, Webber said, but the better times may last months, not years.
The West Virginia Public Service Commission on Tuesday gave three coal-burning power plants an extended lease on life that will be paid for by the state’s electric power customers.
West Virginia ratepayers will be responsible for covering the $448 million cost of upgrading the plants to keep them in line with Environmental Protection Agency regulations. Kentucky and Virginia regulators declined to impose on their ratepayers any cost of keeping the plants open beyond 2028.
Supporters of extending the lives of the plants, particularly the West Virginia Coal Association, said the number of jobs they support and the tax base they provide to communities outweighed the increase in monthly power costs for consumers.
Consumer and environmental groups, as well as large industrial users of electricity, said power bills have gone up enough and make it harder to attract new residents and economic development.
With the rapid changes in the economics of electric power generation, as well as potentially stricter regulations on fossil fuels from the federal government in the coming years, there’s no guarantee any of the plants will operate until 2040. American Electric Power executives acknowledged this during recent testimony to the commission.
The company had sought a decision from the commission by Wednesday. That was the deadline for AEP affiliates Appalachian Power and Wheeling Power to declare that they would proceed with the upgrades at the three plants or announce their retirement in 2028.
In addition to the upgrades needed for EPA compliance, the commission’s order on Tuesday said West Virginia ratepayers would be responsible for covering any operating and maintenance costs for the plants beyond 2028.
In their testimony, AEP officials declined to provide an estimate of such costs.
“We are evaluating the order and working to determine what other actions need to be taken to move forward,” said Phil Moye, an Appalachian Power spokesman, in a statement Tuesday.
West Virginia electric power customers may be asked to pay more to keep three coal-burning power plants open longer, but not everyone is on board.
On Friday, the West Virginia Public Service Commission will consider whether customers of Appalachian Power and Wheeling Power will pay the full cost of upgrades to the John Amos, Mitchell and Mountaineer power plants.
The three plants need changes to their wastewater treatment systems. The changes would allow the plants to remain in operation through 2040. Without them, the plants would be required to close by the end of 2028.
Roughly 60% of the power the Amos and Mountaineer plants generate goes to customers in Virginia. The State Corporation Commission there rejected the upgrades for those plants as well.
That raises a difficult question. Is it fair for customers in those states to receive electricity from power plants upgraded entirely at the expense of West Virginians?
Emmett Pepper, policy director for Energy Efficient West Virginia, says no.
“It’s not fair for West Virginia ratepayers to have to pay for a power plant that other states are getting power from and getting the benefit from,” he said. “It’s not fair for West Virginians to pay for something that’s for Kentuckians and Virginians.”
Pepper’s group isn’t alone. The West Virginia Consumer Advocate Division opposes the plan. So do groups representing the state’s largest industrial customers of electricity.
Rebecca McPhail, president of the West Virginia Manufacturers Association, urged the commission in a letter to reject the plan. She called the proposal “counterproductive” and wrote that higher electric power costs would make the state’s manufacturing base “less competitive.”
Pepper’s group calculated that a 3.3% rate increase to pay for the projects at the three plants would add $4.50 a month to the average residential customer’s bill.
It may not stop there. Changes in the ownership structure of the plants could add more costs. If Wheeling Power were to purchase Kentucky Power’s half ownership of the Mitchell Plant, that could cost hundreds of millions of dollars. Again, consumers would pay.
Pepper said he’s seen that happen before.
“In the past, that cost us a lot of money,” he said. “That cost us a lot of rate increases.”
Appalachian Power and Wheeling Power have said they need an answer from the Public Service Commission by Oct. 13. If the companies decide to pull the plug on the wastewater projects and shut the plants down in 2028, they have to let state officials know by then.
Friday’s hearing will give stakeholders, and the public, a chance to let the commissioners know what price they’re willing to pay to keep the electricity flowing from the three power plants. Even if the answer is not one penny more.
The first thing that strikes you about the Mountaineer power plant is its sheer size.
Its stacks rise more than 1,000 feet over the Ohio River floodplain, almost as tall as the Empire State Building. Its massive cooling tower can hold 8.5 million gallons of water.
A 20-story building houses its 1,330-megawatt generator. It produces enough electricity to power a city of a million people. Or more than half of West Virginia.
Mountaineer has been generating electric power since Jimmy Carter was president.
But due to changing environmental regulations and the competition from natural gas and renewable energy, time could be running out.
Virginia’s Corporation Commission, however, rejected it.
The regulatory snag shows the limits of what supporters of West Virginia’s coal plants can do to keep them from shutting down as the country moves away from fossil fuels.
‘Closing of a Culture’
Shutting down the plant would deliver an economic blow to Mason County. It employs more than 150 workers and supports other jobs in the community. Local schools depend on tax revenue from the plant.
Upstream, coal mines in northern West Virginia supply the plant with its fuel, which is delivered by barge. Those jobs are at stake, too.
“This is closing of a culture, this is closing of a community,” said Rick Altman of Wheeling, who’s been a coal miner for 44 years. “This is closing of a generational lifestyle that has really fueled this country.”
When Mountaineer opened, coal was the nation’s dominant source of electric power. Four decades later, natural gas dominates and renewables are catching up.
Coal plants like Mountaineer are becoming more expensive to operate. American Electric Power, the parent company of Appalachian Power, has two other coal-fired plants in West Virginia: the John Amos plant in Putnam County and the Mitchell plant in Marshall County. They face the same pressures.
The company has set a goal of becoming 80% carbon-free by 2030. Reaching that goal will require more coal plants to shut down.
President Joe Biden wants the nation’s power supply to become carbon-neutral in 2035. That’s five years before the West Virginia plants are scheduled to shut down if they are upgraded.
The United Nations Intergovernmental Panel on Climate Change warns that drastic action is necessary to curb the most devastating impacts of global warming — which in the Ohio Valley would mean less predictable weather, more flooding, and second-hand impact from coastal displacement and global disruptions.
One path forward: Replacing the coal plants with carbon-free sources of energy.
Gypsum and Molasses
It isn’t only the jobs at the power plants, the coal mines or the barge companies on the line. The plant produces and consumes other materials that contribute to the local economy.
Fly ash is collected and hauled off by the truckload. It gets recycled in concrete and asphalt.
The exhaust is filtered through a huge drum that spins with powdered limestone and steel balls.
“We mix limestone and water inside of that drum that’s got them rotating balls in it,” said Brett Watt, the plant’s senior maintenance superintendent. “And it crushes this limestone up to where it’s a slurry. It’s actually finer than the coal is.”
That removes sulfur dioxide and produces gypsum, which is used to make the drywall.
Probably the strangest part of the process involves molasses. Yes, molasses.
It’s used to grow bacteria that eat mercury and selenium.
“We bring in tanker trucks of molasses to feed the bacteria,” said Brian Mabe, the plant manager. “There’s, you know, a living organism that removes that.”
The plant’s closure would be bad news for the drywall plant and the molasses maker.
Curtis Tate
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WVPB
The stacks at the Mountaineer power plant in Mason County, West Virginia
Fossil Fuel Allies
One thing the plant, and most like it, can’t remove from the exhaust stream is carbon dioxide.
West Virginia lawmakers have made an effort to bolster the state’s remaining coal-fired power plants. This past spring, they passed a bill that makes it harder for coal plants to shut down.
Gov. Jim Justice has also taken steps to save the state’s coal plants. He reactivated the dormant West Virginia Public Energy Authority and appointed fossil fuel allies to serve on it and find ways to keep the plants from closing.
“We know these plants won’t run forever,” Hamilton said. “You know, we’re looking for about a 20 year run. Maybe a couple of decades.”
Justice also appointed the former top coal lobbyist in West Virginia to the Public Service Commission, which regulates coal plants. Justice himself owns companies that mine coal.
The federal government is poised to spend billions of dollars to reclaim abandoned mines in Appalachia, and that could help communities that are losing jobs.
Altman started working in the mines when he was 19, and he said he’s heard the promises before. As more power plants and coal mines close, he said, the government needs to step up.
“Don’t just have a plan and say, ‘don’t you worry.’ I’m 63 years old. I got laid off the first time in 1979. You know what I was told by the government? ‘Don’t worry about this, we got you covered. We’re going to educate you, we’re gonna do this.’ I’m still waiting for that to happen. I’m truly waiting for that to happen.”
A report published by the National Bureau of Economic Research shows that the John Amos, Mountaineer and Mitchell plants will no longer be economical to operate in five years.
That fee would pay for wastewater treatment projects that are required to keep the plants in operation through 2040. But one of the report’s authors predicts they won’t last to the end of this decade.
“Inside and outside our model, 2040 is hard to imagine,” said Scott Holladay, an associate professor of economics at the University of Tennessee. “And even 2030 is feeling optimistic at this point, for sure.”
Holladay says his model is mostly accurate, though he noted that the model can’t know every specific circumstance surrounding each plant.
Still, Holladay’s model says one of the three units at the Amos plant should already be taken offline because it no longer operates economically. The other two would close in five years.
The model predicts one of Mitchell’s two units would close in two years, and the other in three.
It predicts Mountaineer’s single unit would shut down in three years.
Appalachian Power and Wheeling Power have told state regulators that 2028 is the earliest date the plants would close, three years after Holladay’s model forecasts they could close.
The plants are aging. Mitchell and Amos began operating in 1971, and Mountaineer in 1980.
“They’re not very efficient at turning coal into power,” Holladay said, “and new, more efficient technologies coming down the grid and kind of eating their lunch.”
Cheap, abundant natural gas has been eroding coal’s share of electric power generation for more than a decade. Meanwhile, the cost of wind and solar energy has plummeted.
The demand for electricity is flat, even factoring in the pandemic.
Appalachian Power and Wheeling Power, both subsidiaries of Ohio-based American Electric Power, have testified that upgrading the plants represents the best value for ratepayers.
Doing the work on their wastewater systems would delay the cost of retiring the plants and finding new sources of power to replace them.
Still, power customers will have to pay those costs whenever the plants shut down.
There’s also the delicate matter of what happens to the communities that depend on the plants for jobs and tax revenue, as well as the coal mines that supply them.
State regulators are under pressure from lawmakers and coal industry supporters to prevent the plants from closing. Holladay says the utilities may choose to keep them open and lose money.
“And so it’s a tough spot if you own these utilities,” he said, “so I understand why they’re struggling to think about what their options are.”
A final decision should be coming in the next several weeks.
