dbeard@dominionpost.com
MORGANTOWN – The Senate Energy Committee gave its blessing on Thursday to a bill aimed at incentivizing utility companies to invest in coal, natural gas and nuclear assets over wind and solar. The committee also advanced a pro-coal resolution intending to create a West Virginia Coal Renaissance Act.
The blessing came over objections from the Public Service Commission, which said the bill does nothing except add to its paperwork burden.
SB 505 is called the Reliable and Affordable Electricity Act. The wording is convoluted and the bill is hard to understand, but testimony by Isaac Orr, vice president for research for Always On Energy Research, helps to break it down into its pieces.
It requires the PSC, when considering a utility’s request to adjust its rates, to consider the reliability of the generation asset (a power plant, windmill or solar site) it’s proposing to build, buy, scale down or shut down.
The utility and PSC must evaluate the reliability of the asset relative to the utility’s required contributions to the power grid, and how the proposed action will affect reliability and capacity demands.
The PSC would then determine if the proposed rate increase is fair, just and reasonable and deny recovery of any costs determined not to be so, and approve a rate of return based on that determination.
Orr told the committee he is the bill’s author and has presented it in several other states, including Arizona, Michigan, Arkansas and Ohio.
“We firmly believe that families and businesses should only pay for what they get,” he said.
There’s a significant difference, he said, between dispatchable power – coal, natural gas, nuclear – that’s available on demand, and intermittent wind and solar that is only available at certain times.
The regional grid operator, PJM Interconnection, gives each source a reliability rating: nuclear, 95%; coal, 84%; gas, 62-79%; wind, 35%; solar, 14%.
However, he said, a coal plant’s value will depreciate, and the utility will find more incentive to invest in more profitable intermittent generation.
The bill is designed to lessen that incentive by allowing a utility to profit from only the reliable portion of its assets. The utility could still recover the costs of construction or acquisition of wind and solar, but the profit factor would be limited. The utility would be less inclined to shut down older, dispatchable facilities.
Along with keeping ratepayer costs at affordable and reasonable levels, he said, the bill would enable utilities to reliably meet the increasing grid demands from data centers and manufacturing growth.
PSC chair Charlotte Lane also testified, saying their main job is to make sure the lights stay on. “Reliability is our number one goal.”
She said she’s sure the bill is well intentioned, but “it is very difficult to understand what it is trying to get to.”
The PSC already has the jurisdiction to do what the bill calls for. It would only add to its administrative burden by piling up more reports.
Following questioning of the witnesses, the members approved the bill in a voice vote without debate or amendments. It was unclear if any members objected.
Emmett Pepper, policy director for Energy Efficient WV, issued a statement on the bill.
He said, “The so-called Reliable and Affordable Electricity Act does nothing to address the significant reliability issues we have here (some of the worst in the nation) and will result in less affordable electricity, so it’s actually the exact opposite of what it says.
“I hope that our Legislature gets serious someday about lowering electric bills,” he said, “as well as empowering people to take control of their energy bills on their own, instead of forcing us to keep subsidizing monopoly-owned power plants. But here we are. Another bill to subsidize power plants that can’t survive on the free market, and that we have to keep subsidizing them, apparently forever.”
SB 505 goes next to the Government Organization Committee, as it affects the PSC.
Coal resolution
SCR 18, announcing the intention to create a West Virginia Coal Renaissance Act, cites the changing views about energy as the Trump administration follows the more renewable-minded Biden and Obama years. It says those years saw coal employment decline by 50% and six coal-fired plants closed.
It says the PSC has set a 69% capacity factor for optimal plant operation (Lane clarified that to say the figure is a goal, not a mandate) but utilities have ignored that in pursuit of “anti-coal climate policies.”
Gov. Patrick Morrisey’s energy views are in line with President Trump’s, the resolution says, and the state’s coal plant operators must change their behavior.
Therefore, it says, the Coal Renaissance Act, along with programs and initiatives, will encourage and foster greater coal usage, and state agencies will develop strategies to fully develop coal production and consumption, including new coal-fired plants and efforts to keep current plants open.
The resolution goes to the full Senate.
