CHARLESTON, W.Va. — The state Legislature is moving a bill meant to give the financially-troubled Pleasants Power Station a better chance of staying alive.
“Without this legislation, the likely outcome is the plant will close,” John Judge, president and CEO of FirstEnergy Solutions told delegates on Monday.
The House Finance Committee on Monday afternoon unanimously advanced a bill meant to give the plant some financial breathing room. The full House of Delegates will vote on the bill Tuesday during a continued special session.
Delegates also approved the next drawdown of $600 million and $200 million in Roads to Prosperity bond money. And delegates approved supplemental spending bills representing increased investments in the public education system.
The state Senate resumes its version of the special session on Tuesday.
The bill that received the most attention Monday was the one meant to help the power plant. Gov. Jim Justice called for the bill’s introduction.
“This bill is so incredibly important because we’re talking about saving people’s jobs — good coal jobs — and saving entire counties that would be devastated if this plant were to close for good,” Justice stated.
“This is an emergency, and I’m calling on the House and Senate to work along with me to act on this as quickly as possible.”
Operators of the power plant, which employs 160 people, made no bones that it is teetering on the edge financially.
FirstEnergy Solutions wound up with oversight of the coal-fired power plant in Pleasants County through ongoing bankruptcy that would wind the plant down by 2022.
The plant is asking to be relieved of its $12.5 million annual business and occupation tax obligation to the state to provide financial breathing room.
It is unlike most other power plants in West Virginia because, as a merchant power plant, it is not regulated by the Public Service Commission.
So it takes on the business and occupation tax, rather than passing it along to ratepayers.
“We’re the one plant that pays the tax and does not have a way to pass it along to customers,” Judge said.
The Longview Power Plant, also a merchant plant, has a local exemption, officials said.
The operators of the Pleasants Power Plant said they have been trying to make changes to the current bankruptcy plan, aimed at keeping the plant open longer.
“Our goal here is not to just keep it open for the next couple of years,” Judge said.
He said the company wants to take part in August in a capacity auction, which means the plant could be paid for power it provides in the future.
The Pleasants Power Plant is running so close to the edge financially, that it needs to shed the $12.5 million annual tax obligation to be able to commit to still being open to deliver on the bid, Judge said.
“We’re right there where the last $12.5 million counts,” he said.
Without it, he said, “The plant will have closed already before the next auction comes along. It’s that critical.”
Jay Powell, president of the Pleasants County Commission, told lawmakers that the community depends on the plant for its own tax base.
He said about a third of the local tax base has been generated by the plant. And he said the 160 employees have averaged making $80,000 a year once overtime is factored in.
But as the plant’s fortunes have suffered, he said, so has the local tax base.
“That nail is halfway in the wall right now with the cuts we’ve had to make,” he said. “If it closed, it would be devastating.”
Jay Powell, Pleasants County Commissioner, talks with @HoppyKercheval about the significance of the Pleasants Power Station and if the plant is in danger of closing. WATCH: https://t.co/wkudfIAoe1 pic.twitter.com/MMxqV64dYs
— MetroNews (@WVMetroNews) July 22, 2019
Over the past couple of years, the plant has sought federal help and also explored a transfer that would have meant ratepayers assuming the plant’s costs and financial risks.
Both were dead ends.
Environmental lobbyist Karan Ireland has kept an eye on that process. On Monday, she was again watching FirstEnergy Solutions trying to strike a deal on the power plant.
She suggested the state would be better off investing the $12.5 million represented by the power plant’s business and occupation tax into a longer-term economic plan.
“What kind of plans are you going to put in place for them, what kind of plans are there for transitioning the people and the community around them into new jobs? Because this isn’t it.
“And it’s not because of all the different reasons we’ve heard. It’s because they’re not competitive in the deregulated market they sell to.”
But, Ireland concluded, even if the plant receives a break from the state its survival is not guaranteed.
“He seems to be saying maybe this $12 million will help them, maybe it won’t.”