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WV Coal Industry Sees Threat in Appalachian Power-Sierra Club Agreement

The largest electric utility in West Virginia has entered into an agreement with an environmental group that coal industry officials fear could lead to the shutdown of two major coal-fired power plants in the state.

Under the agreement between the Sierra Club and Appalachian Power, the utility will conduct “retirement analyses” for the John Amos power plant at Winfield and the Mountaineer power plant near New Haven.

Appalachian Power serves 465,000 residential, commercial and industrial customers in the state, and those two power plants provide about 70 percent of the power generated by the utility in West Virginia.

Jeri Matheney, Appalachian Power’s director of communications, said possible early retirement “will be one of the many scenarios evaluated.  We’re not seeking to retire the plants early, but we are committed to evaluating their economic viability in light of prevailing and forecasted market conditions.”

Appalachian Power is a huge coal customer. Together the two plants burn about 7.7 million tons of coal a year.  Matheney does not believe the agreement will impact coal production in the state.  However, West Virginia Coal Association senior vice president Chris Hamilton disagrees.

It is “alarming to learn of one of the state’s major utilities to be in negotiations with a national environmental group, the Sierra Club of all people, over the possible shutdown of two major coal-fired power plants,” he said.

“The economic value of these plants is of vital importance to our state’s economy,” Hamilton said, “and collectively they account for thousands of state jobs and keep dozens of surrounding cities and counties vibrant.”

The agreement falls in line with the Sierra Club’s “Beyond Coal” campaign to move the country away from the carbon-producing fossil fuel.   Pablo Willis, associate press secretary for the Sierra Club, said whether the plants close early—both are now scheduled for retirement in 2040—will depend on the utility’s study.

“The retirement analysis will take into account all future costs/expenses for those plants and will look at all reasonable options for replacement of the coal plants with clean energy alternatives such as solar or battery storage,” Willis told me.  The analysis is due in 2022.

Appalachian is already broadening its power generation portfolio to include more alternative fuels.  Earlier this year the utility asked for bids to construct a solar power plant in West Virginia capable of generating up to 50 megawatts of electricity.

Matheney said the deal with the Sierra Club is not related to that shift.  “While Appalachian Power is committed to gradually introducing more renewables as part of diversifying our generation mix, this agreement is completely separate from that goal.”

However, Appalachian, which has 532,000 customers in Virginia, is feeling pressure from the Commonwealth.  The Virginia Clean Economy Act, which took effect July 1, will require Appalachian to produce 100 percent of its electricity from renewables by 2050.

Appalachian Power said that to meet that requirement, “the company will rely less and less on its coal fleet.”

The coal industry is struggling mightily.  The Wall Street Journal reported last week that President Trump has not been able to bring back coal as he promised.  “As mines and power plants continue to close, the question many are asking in the diminishing American coal industry is—what now?”

Clearly that is on the minds of West Virginians who depend on the coal industry.  The Appalachian Power-Sierra Club agreement is a harbinger of more difficult times ahead.


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