West Virginia Record

Tuesday, December 10, 2019

Utility modernization and improvement legislation working as expected, coal group president says

By Karen Kidd | Sep 8, 2016

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CHARLESTON – Legislation signed by the governor early last spring that allows utility companies to fast-track upgrade recovery costs to help keep coal miners employed is doing exactly what it was designed to do, a coal association official said during a recent interview.

"The legislation is working well, as evidenced by the steps being taken by FirstEnergy," West Virginia Coal Association President Bill Raney said during an email interview with The West Virginia Record. "It is intended to encourage and accommodate the in-state coal generating utilities to modernize boilers, control technologies (and make) innovative approaches to achieve compliance with federal EPA rules."

The legislation, formerly known as West Virginia House Bill 4435, allows utility companies to fast-track recovery of costs for upgrades, referred to as modernization and improvement plans, so long as those upgrades help keep West Virginia coal miners employed. The legislation was signed by the governor on March 24 and went into effect this past June.

In August, subsidiaries of the diversified power company FirstEnergy, Mon Power and Potomac Edison, submitted a request to the West Virginia Public Service Commission to upgrade its facilities at the Harrison and Fort Martin power stations, according to a press release.

FirstEnergy is headquartered in Akron, Ohio.

"As part of FirstEnergy's long-standing commitment to sustainability, the company is making emissions control investments at Harrison and Fort Martin that allow the plants to meet increasingly stringent environmental regulations," the press release said. "These investments will allow the plants to continue generating low-emitting and affordable electricity, providing well-paying jobs and contributing significant tax income to surrounding communities."

The press release referred to the legislation passed earlier this year as part of the reason FirstEnergy submitted its request for the modernization and improvement plan that would help the Harrison and Fort Martin power stations achieve ongoing compliance with U.S. Environmental Protection Agency requirements for Mercury and Air Toxics Standards and the Cross-State Air Pollution Rule. "To meet these requirements, 18 projects are planned or underway, including improving electro-static precipitators, installing technology to control mercury and other emissions, improving existing flue gas desulfurization equipment, enhancing continuous emission monitoring, tuning boilers, and improving controls and the selective catalytic reduction system," the press release said.

If approved, the $6.9 million cost would add up to a 55-cent increase in the average residential customer's bill beginning May 1, 2017.

Mon Power serves about 385,000 customers in 34 West Virginia counties while Potomac Edison serves 138,000 customers in West Virginia's eastern panhandle. The Harrison power station uses about 5 percent of the state's coal production, 5 million tons of the 99.5 tons million produced in 2015, according to FirstEnergy's request to the West Virginia Public Service Commission. Both power stations are expected to consume about 10 percent of the state's coal output of 73 million tons, according to the request.

"Lawmakers understood that efforts to modernize and improve coal-fired boilers require significant investment, and that electric utilities should be permitted to recover these costs through a monthly surcharge rather than waiting for a full base rate case," FirstEnergy spokesman Todd Meyers was quoted as saying in a West Virginia Coal Association press release.

The FirstEnergy request to the West Virginia Public Service Commission is a sure sign that House Bill 4435 is living up to expectations, Raney said.

"Stabilization of the coal industry to maintain its accompanying benefits to the state and its citizens requires West Virginia to be proactive and focus on the modernization and improvement of coal-fired boilers used by electric utilities in this state to allow the more efficient use of coal in the generation of electricity with reduced environmental impact," the legislation said. "A comprehensive program of modernizing, upgrading and improving coal-fired boilers at existing West Virginia power plants owned by electric utilities at reasonable cost to ratepayers will benefit the customers of the electric utilities, the public in West Virginia and the economy of the state as a whole."

Investments through the legislation will allow power plants to continue generating low-emitting and affordable electricity while also helping to keep coal miners employed and contribute significant tax income to surrounding communities, Raney said.

"The objective, of course, is to keep all the West Virginia generating units operating and burning West Virginia coal," Raney said.

However, the coal association isn't just resting on the March legislation, Raney said. "We are currently in the process of preparing legislative proposals for next year, again with the objective of making us more competitive with other coal-producing states so we can keep as much production here in West Virginia and more of our miners working," Raney said.

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