Energy, West Virginia Legislature

Committees OK resolution urging Mon Power to buy Pleasants Power Station, bill to exempt steam coal used in WV from severance taxes

MORGANTOWN – The House Energy Committee on Thursday approved a resolution urging Mon Power to “strongly consider” buying the coal-fired Pleasants Power Station.

Across the Capitol, the Senate Energy Committee approved a bill to grant a severance tax exemption for West Virginia steam coal sold to West Virginia power plants.

The resolution is HR 12. It says Pleasants has served the mid-Ohio Valley since 1979 and employs 154 people. It supplies 9% of the state’s power generation, has a $128 million annual impact in Pleasants County and contributes $1.75 million in annual taxes to the county and school board. It contributes $400 million annually to the region.

The resolution notes that Mon Power is undertaking a feasibility study on the potential purpose.

The idea of the purchase arose during Mon Power and Potomac Energy’s ENEC – Expended Net Energy Cost – case to recover fuel, purchased power and transmission costs. The Public Service Commission ruled on the case at the beginning of January.

Back in 2017, Mon Power and Potomac Edison were trying to buy it from FirstEnergy sister Allegheny Energy Supply. At the time, large energy users and some of the same citizen groups involved in this case were concerned that the move was an effort to move Pleasants from the unregulated to the regulated market, effectively shifting the plant’s financial risks from stockholders to ratepayers. The PSC’s Consumer Advocate Division also opposed the sale.

But in the recent ENEC case, the Consumer Advocate Division reversed course and recommended the sale, saying Pleasants has better emissions control equipment than Mon Power’s Fort Martin plant, is better situated to receive coal supplies than Fort Martin, and could be acquired cheaply from current owner Energy Harbor, which plans to close it.

Members defeated an amendment posed by Delegate Kayla Young, D-Kanawha, to also urge Allegheny to consider the purchase.

The resolution has 36 sponsors and lead sponsor Delegate Trenton Barnhart, R-Pleasants, said the plant is an important local asset. “It’s going to hurt our energy production if we lose it.” And the plant is the county’s largest taxpayer. “We can’t replace that.”

Members approved the resolution in a voice vote, with only Young dissenting. It goes next to Rules before hitting the House floor.

Senate Energy passed SB 168 with no debate or dissent.

It says that starting March 1, steam coal severed within the state and sold to in-state power plants will be exempt from severance tax, except for the portion devoted to counties and municipalities.

Committee counsel pointed out two issues. One is the loss to general revenue: $3.5 million this fiscal year, $22 million in FY 2024 and $24 million thereafter.

The second issue, counsel said, is a potential conflict with federal interstate commerce laws because it discriminates between West Virginia coal sold in-state and that sold out of state.

It heads next to Finance.

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