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Coal advocates want new rules for purchase agreements, more stability

MORGANTOWN, W.Va. — The West Virginia Coal Association will ask the state Public Service Commission to form a task force comprised of coal and power producers to reevaluate price prediction models in hopes of creating more certainty for the coal industry and power customers.

Coal Association Vice President Jason Bostic said the conversation should start at the local level and preserve as many jobs as possible.

“They need to voice their concern about keeping coal plants running. It makes sense not only from a power-cost perspective, but also because they keep coal mines running and they are such centers of economic activity for the community,” Bostic said.

Recent changes in energy policy and world tensions have applied immediate upward price pressure to all fuel sources and drastically increased volatility. Bostic wants some basic guidelines in place to ease market volatility for producers and rate payers.

“We’re going to have to lock in longer term contracts at a price that makes it cost effective for customers in West Virginia but also assures the coal industry and fuel suppliers continue to stay in business,” Bostic said.

Appalachian Power Company filed a request with the PSC last week seeking an adjustment in what it can charge customers. The company said it can’t keep up with the current price of coal. The average customer’s bill would go up $18 a month if the request is approved.

Bostic said from a rate payer perspective it is very important to the existing power generation infrastructure operational as long as possible. He said if power companies continue to turn to renewable options prices could go up and limit cost effectiveness.

“If you look at the price to generate power at the coal plants in West Virginia versus buying it off the market, off the system or invest in renewable or other intermittent sources it’s as much as 50 percent cheaper to make the power at the coal plants,” Bostic said.

Because of the pressure placed on the coal industry production has dropped, but increased in recent years. Bostic is concerned that supplies could be in jeopardy and that could cause rolling blackouts.

Some states have forced into blackouts due to high demand and low coal supplies. Power demand in India hit a 38-year high earlier this month, according to local media reports.

“We may get to the point where there are energy conservation orders issued for individual power systems,” Bostic said. “We came extremely close this winter to that happening, not only in the PJM market but New England as well.”

Bostic insists coal will play a role in the future of energy production. The move to renewable energy sources would best be managed as a gradual process as technology and delivery is improved.

“If you can’t run those plants because of fuel supply issues or other complication you’re essentially going to be charged twice,” Bostic said. “The coal plant you already paid for with that investment, plus the price of buying that power off the market where it can be as much as four times as expensive as what it is to make it at your own coal plant.”

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