Aug. 28--The West Virginia Coal Association said a bill passed earlier this year is already promising to save coal jobs.
HB 4435 allows utility companies to fast-track recovery of costs for upgrades -- called Modernization and Improvement Plans (MIPs) -- to power plants if the upgrades help keep West Virginia coal miners working.
The bill took effect in June. This month, FirstEnergy subsidiaries Mon Power and Potomac Edison submitted a request to the Public Service Commission (PSC) to upgrade facilities at the Harrison and Fort Martin power stations.
Praising the legislation, the Coal Association said last week in a release, "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 bill 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.
"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."
FirstEnergy proposes 18 projects at the two plants to aid in compliance with federal Mercury and Air Toxics Standards and Cross-State Air Pollution Rule II standards.
Among the projects, FirstEnergy would install technology to control mercury and other emissions, improve existing flue gas desulfurization equipment, enhance continuous emission monitoring, tune boilers and improve controls.
The total upgrades would cost about $6.9 million, FirstEnergy said. The costs would appear on a monthly residential bill as a surcharge, estimated at 55 cents by FirstEnergy in testimony to the PSC.
FirstEnergy spokesman Todd Meyers explained the thinking behind the bill and the proposal.
"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," he said.
"Our proposal should help us comply with increasingly stringent environmental regulations so we can continue to operate our plants. The Harrison and Fort Martin power stations provide employment, opportunities to use West Virginia coal, and pay millions of dollars of state and local taxes to support the communities where we operate.
"We think the environmental projects we are undertaking at the plants should help stabilize the struggling coal industry, preserving family-sustaining jobs at a reasonable cost of about 55 cents per month for the typical residential customer.
"Of course, the Public Service Commission of West Virginia, which will undertake a thorough review of our proposal in coming months, will have the final say," he said. "Rate cases are costly, complex and time-consuming proceedings, often taking more than a year to complete."
In testimony, First Energy told the PSC that the MIP surcharge won't increase revenue or reduce existing expenses.
HB 4435 is intended to stabilize the West Virginia coal industry. The Harrison plant, FirstEnergy told the PSC, uses about 5 percent of the state's coal production -- 5 million tons of 99.5 million produced in 2015. For 2016, the two plants will consume about 10 percent of the state's output of 73 million tons.
Coal Association President Bill Raney said, "West Virginia's coal industry has suffered a great deal under the Obama Administration over the past eight years. There are 11,000 coal miners not working today who should be. We have to do whatever we can here in West Virginia to help our electric companies meet the demands imposed on them by a radicalized federal regulatory system.
"The leaders of the Legislature realize this and are working hard to find ways to keep West Virginians working," Raney said. "FirstEnergy's investment in upgrades to their power plants likely wouldn't have happened and the facilities would simply have been closed had it not been for what the Legislature did earlier this year. We thank them for their efforts to protect West Virginia jobs."
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