PSC Denies Part Of Appalachian Power’s Fuel Cost Recovery Case

In a decision Tuesday, the PSC denied nearly $232 million in fuel costs, while approving $321 million, to be recovered over 10 years.

Bringing a nearly two-year case to a close, the West Virginia Public Service Commission denied part of the fuel costs Appalachian Power sought to recover from electricity customers.

In a decision Tuesday, the PSC denied nearly $232 million in fuel costs, while approving $321 million, to be recovered over 10 years.

The average residential customer will pay $2.50 more per month for those 10 years. Customers will begin paying the new rates on Sept. 1.

The PSC also denied a proposed settlement by the West Virginia Energy Users Group and the West Virginia Coal Association to recover fuel costs and other expenses over 20 years at a cost of nearly $3 billion.

The commission staff and the Kanawha County Commission opposed the settlement.

Appalachian Power had sought to recover about $553 million through the beginning of 2023 and an additional $88 million for the year beginning Sept. 1, 2023.

The PSC said the company did not properly manage its coal supplies in 2021 and 2022, leading it to buy coal and purchased power at higher prices. The commission said customers should not have to bear all of those excess costs.

Many power companies struggled with the high cost of coal and natural gas beginning in 2021 after the economy began to recover from the COVID-19 pandemic. Russia’s invasion of Ukraine in early 2022 pushed prices even higher.

Rail and barge availability issues also put pressure on coal supplies at power plants in West Virginia. Appalachian Power at one point sued its largest coal supplier over missed deliveries. The companies eventually settled.

Both coal and natural gas prices have fallen in recent months.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

Proposal To Settle Appalachian Power Fuel Costs Draws Opposition

The West Virginia Energy Users Group and the West Virginia Coal Association have proposed to pay off about $500 million in excess fuel costs incurred since 2021 by securitizing, or spreading out the payments over 20 years.

A settlement has been proposed to pay off hundreds of millions of dollars in Appalachian Power costs. But not everyone supports it.

The West Virginia Energy Users Group and the West Virginia Coal Association have proposed to pay off about $500 million in excess fuel costs incurred since 2021 by securitizing or spreading out the payments over 20 years.

However, the Public Service Commission staff, the state Consumer Advocate Division and the Kanawha County Commission oppose the deal.

It is not immediately clear what impact the settlement would have on rates. Appalachian Power customers will have to pay more per month to deal with the costs under any scenario.

The Consumer Advocate Division has asked the PSC to schedule a supplementary hearing on the settlement.

Securitization isn’t typically used to pay for routine costs such as purchasing fuel. 

Rather, it’s designed to help states retire coal-burning power plants before the end of their useful life and replace them with more economical or less carbon-intensive electricity generation.

Appalachian Power is an underwriter of West Virginia Public Broadcasting.

Coal Industry Wants Legislature's Help To Recruit And Train Miners

Hamilton said Senate Bill 157 could help do that, by funding the Coalfield Community Development Office.

The West Virginia coal industry’s top lobbyist says mine companies are having trouble finding workers, and he’d like lawmakers to help recruit and train them.

Chris Hamilton, president of the West Virginia Coal Association, told members of the Senate Energy, Industry and Mining Committee on Tuesday that West Virginia coal mines could hire several hundred workers, if it could find them.

“You know, we ought to be recruiting people from around the country, bringing them here and providing them land and opportunities within our industrial sector,” he said.

Hamilton said Senate Bill 157 could help do that, by funding the Coalfield Community Development Office. That office has been dormant for at least a decade, Hamilton said.

The state employs about 13,000 full-time mine workers. Coal production has been up in the past year, but the industry has been limited by its ability to find new workers.

The committee approved the bill and sent it to the Finance Committee.

The funds would come from coal severance taxes, which have increased with the demand for coal and higher prices per ton.

If It's Good Enough to Wash Coal, Is It Good Enough to Wash Me?

“If it’s good enough to wash coal, it’s good enough to wash me.” That’s a tweet that supposedly went out from the West Virginia Coal Association in…

“If it’s good enough to wash coal, it’s good enough to wash me.” That’s a tweet that supposedly went out from the West Virginia Coal Association in response to the Elk River chemical spill. No such remark exists on the association’s feed today, but the sentiment sparked reactions from many, including one southern W.Va. health campaign. In the aftermath of the MCHM spill, they’re bringing up questions about certain coal mining practices.

Beckley native Bo Webb is the Campaign Director of the Appalachian Community Health Emergency campaign (ACHE). His hope is that the Elk River chemical spill will bring much needed attention to communities where chemicals like MCHM are regularly used.

“Those of us who live in Mountain Top Removal areas, we’ve been putting up with and dealing with these toxins for years,” Webb says.

For Immediate Release – Jan. 14, 2014 Appalachian Community Health Emergency campaign responds to W.Va. chemical disaster Contacts:  Bo Webb, ACHE coordinator Bob Kincaid, ACHE campaign Naoma, W.Va.—“If it’s good enough to wash coal, it’s good enough to wash me.”  With that dismissive tweet regarding the ongoing disaster in which the public water supply of 300,000 people was poisoned, the West Virginia Coal Association demonstrated once again the disdain in which they hold the health and well-being of the people of West Virginia.   4-Methylcyclohexane Methanol (MCHM) is used in the coal preparation process. Leaking thousands of gallons of MCHM into the Elk River, Freedom Industries of Charleston, W.Va. poisoned the water supply of hundreds of thousands of West Virginians late last week. It was the first time most people outside the coal business had ever heard of the chemical, but MCHM is used every day in the mountaintop removal coal mining process.   MCHM’s daily use in Central Appalachia’s mining communities is done with no warning to residents. A number of toxins, including MCHM and others even worse, are used in processing coal, many of which are pumped into multi-billion gallon storage lakes of toxic waste that loom above communities like Whitesville, W.Va., hidden behind faulty, sometimes leaky, otherwise frightful earthen dams. A similar dam gave way killing 125 people and leaving 4,000 homeless in the February 1972 Buffalo Creek disaster. The current 7,500-gallon spill would be dwarfed by a dam break on any one of these multi-billion gallon ponds.   “The federal water emergency in nine West Virginia counties is putting people's lives and health in immediate danger.  But that is just one small part of the larger story of mountaintop removal coal mining and the devastating impact it has on the land, water, lives and health of the people in the region,” said Bo Webb, Appalachia Community Health Emergency Act (ACHE Act) campaign coordinator.  “Mountaintop removal coal mining is creating a broad public health emergency in the regions where it is practiced. That is the untold story.”   As a result of mountaintop removal coal mining, Americans in Central Appalachia’s Mountaintop Removal Zone suffer a wide variety of diseases far in excess of the rates at which they are suffered in the general population.  Communities near mountaintop removal have a 42% higher rate of birth defects, 4,000 excess deaths per year, up to twice the cancer rate, and higher rates of heart, lung, and other diseases.   The ACHE Act, HR 526 in the US House of Representatives, seeks to break the silence on what is poisoning innocent people living near mountaintop removal sites and their associated plants and processes.  “I hope people will finally see how badly we need the ACHE Act,” noted Bob Kincaid of the ACHE campaign. “It’s the only law in Congress that would help people learn what kind of toxins they live with in mountaintop removal areas. We deserve to know what is poisoning us. We deserve to have it stopped.”

The ACHE campaign formed a year ago in January when organizers decided the only way to address health disparities related to Mountain Top Removal mining was to focus legislative efforts at the federal level. Since then they’ve been working on the ACHE Act designed to help protect communities trying to coexist with industry.

“There are 4,000 excess deaths per year in counties that produce coal by the mountain top removal method,” Webb says. “To me that’s alarming given that there’s only approximately 7,000 workers on these sites.”

Webb points to multiple peer-reviewed studies that demonstrate significant health disparities in communities in and around large surface mining operations saying that there’s been significant resistance from legislators in acknowledging the findings—acknowledgement that might lead to a better understanding of industrial practices. Webb says slurry impoundments are not least among them.

“According to the DEP, these dams are designed to seep. Imagine that,” he says. “So if they’re seeping, they are seeping the liquids. And we know of numerous chemicals in there. This is a real brew of toxins that are in these dams.”

In fact, he worries that the very regulations enforced to “scrub coal clean” may be inadvertently adding dangerous chemicals to the environment in these areas.

Officials at the West Virginia Coal Association didn’t immediately return a call seeking comment.

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