Wednesday, January 6, 2021

AEP consideration of retiring Marshall County coal plant continues trend, rouses both sides of debate over coal's future in WV

AEP consideration of retiring Marshall County coal plant continues trend, rouses both sides of debate over coal's future in WV

There have been 10 conventional steam coal plants retired in West Virginia since 2005, and there are only nine left in the state, according to U.S. Energy Information Administration data.

At least one of the remaining nine could be retired before the decade is done, continuing a trend of dwindling coal plants across West Virginia as the coal industry fights to preserve itself amid a shift toward renewable energy that is taking shape more quickly outside the Mountain State's borders than inside them.

Appalachian Power and Wheeling Power said in a recent filing with the Public Service Commission of West Virginia that the Mitchell coal-fired generating facility in Marshall County would cease operation in 2028 if the companies choose to retire the plant rather than make an additional investment to ensure that the plant complies with federal guidelines limiting wastewater to continue operating beyond that year.

The companies say they could make modifications to comply with the wastewater rule and a federal rule regulating coal combustion residuals at the Mitchell plant, the John Amos plant in Putnam County and the Mountaineer plant in Mason County that would allow each of those plants to operate until 2040, and the filing argues that it would benefit customers to ensure compliance at the John Amos and Mountaineer plants and keep them operating until the end of their projected useful lives in 2040.

But the companies report that performing only the coal combustion residual compliance work at Mitchell and retiring the plant in 2028 has "comparable costs and benefits" to making the additional wastewater compliance investment to allow the plant to operate beyond 2028. Replacing a portion of the retired Mitchell capacity with a portion of Appalachian Power's excess capacity in 2028 would result in savings to West Virginia customers of approximately $27 million annually from 2029 to 2040, the companies said in the Dec. 23 filing.

Appalachian Power and Wheeling Power are seeking permission to perform all of the work at all of the plants, which they estimate would cost $317 million, and listed potential project-related residential, commercial and industrial rate increases of 1.59%, 1.52% and 1.72%, respectively. The proposed increased project-related rates and charges would produce $23.5 million annually in additional revenue, according to the companies.

The Mitchell plant began operating in 1971 and was West Virginia's sixth-largest plant in generation and fourth-largest in capacity, according to EIA data.

Wheeling Power and Kentucky Power Company each own 50% interest in the plant, according to the Dec. 23 filing. Those two companies and Appalachian Power are regional electric utilities of Columbus-based American Electric Power.

AEP has retired or sold nearly 13,500 megawatts of coal-fired generating capacity in the past decade, according to Nick Akins, AEP's chairman, president and CEO.

"As we look at the future of our power plant fleet, we've balanced the remaining life and economic viability of each of our coal-fueled generating units with other options for delivering power to our customers," Akins said in a November statement in which AEP said it planned to continue operating the Amos, Mountaineer and Mitchell plants while retiring two Texas plants in 2023 and 2028 as it prepared to make environmental upgrades. "We continue to add lower cost, cleaner resources, like renewables and natural gas, as we diversify our generating fleet to benefit our customers and the environment."

West Virginia's number of coal plants has steeply declined as the U.S. shifts away from coal toward renewable energy. The EIA last year reported that the nation's annual energy consumption from renewable sources in 2019 exceeded coal consumption for the first time in more than 130 years, largely reflecting the continued decline in coal used for electricity generation over the past decade, as coal consumption in the U.S. decreased nearly 15% from 2018 to 2019 as renewable energy consumption rose 1%. Electricity generation from coal in 2019 fell to its lowest level in 42 years, according to the EIA.

But in West Virginia, coal-fired power plants still account for almost all of West Virginia's electricity generation. In 2019, coal comprised the smallest share of state generation in more than 20 years, and it exceeded 90% anyway.

Less than 3% of the more than 23,000 operating generators across the U.S. are conventional steam coal facilities, but that clip remains above 20% in West Virginia, according to a Gazette-Mail analysis of EIA's operating generators as of October. Still, West Virginia's percentage of operating generators that use conventional steam coal technology has declined nearly 8% in the last five years as the national clip fell by 2.3%.

The Mitchell plant emitted just over 5 million tons of carbon dioxide, just under 1,900 tons of sulfur dioxide and just over 2,000 tons of nitrogen oxides in 2019, per EIA data.

All those numbers have pushed environmentalists in West Virginia toward embracing renewable energy as an alternative to coal-fired generation.

"The dictates of the market, along with the need to address the health and climate costs of burning coal, mean that much of the nation is taking part in the renewable energy revolution," Vivian Stockman, executive director of the Ohio Valley Environmental Coalition, said. "West Virginia would do well to embrace this change now and make every effort to shift our economy to one that can provide just transitions for former coal workers and sustainable livelihoods for all West Virginians."

The state Public Service Commission last month approved a settlement between FirstEnergy subsidiaries Mon Power and Potomac Edison and energy efficiency advocates including Solar United Neighbors that requires the utilities to justify continuing coal plant operations and provide an economic analysis of plants for which they plan major improvements.

"Renewable energy generation and energy efficiency measures are increasingly more cost-effective options for utilities and ratepayers than continuing to rely on an aging, expensive fleet of coal-fired power plants," Autumn Long, regional field director for Solar United Neighbors, said Monday.

The EIA does predict that coal-fired generation will stabilize after declining through the mid-2020s as more economically viable plants stay operational, and Chris Hamilton, president of the West Virginia Coal Association, said he sees the coal industry "stabilizing about where they are at the present time," noting the prominent role coal still plays in the Mountain State's economy.

Hamilton says the Coal Association was surprised to learn of AEP's plan to potentially close the Mitchell plant, adding that the organization plans to get involved in the PSC proceedings to lobby to keep the plant from retirement.

"We're not sure that [American Electric Power] is looking at the totality of the economics surrounding that plant," Hamilton said, noting that the Coal Association is considering an independent economic evaluation of the plant.

Hamilton estimated that the plant generates "a couple hundred million dollars" of economic support for the Ohio River valley.

"Those range from the hundreds of mining jobs that provide the base fuel, all the vendor supply jobs that support the mining industry in that area, and … the plant workers, all the maintenance workers that service that plant," Hamilton said.

American Electric Power officially retired the Kanawha River coal plant in Kanawha County in 2017 and the Philip Sporn coal plant in Mason County in 2015, while AEP Generation Resources, Inc. retired the Kammer coal plant in Marshall County in 2015.

FirstEnergy pledged in November to transition away from coal-fired power by 2050 in an effort to achieve carbon neutrality in an effort to combat climate change, and Akins noted an "aspirational" goal of zero emissions by 2050 in 2019.

Hamilton alluded to those goals with a call to action in an open letter to "Friends of Coal" last week.

"We are deeply concerned with what the future holds, and you should be as well," Hamilton wrote. " … [W]e must be prepared to stand up for coal."


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