CHARLESTON — The West Virginia Public Service Commission’s legal staff has decided the membership of a task force the commission approved to consider how to lower energy costs for electric utility customers.
The legal staff approved most of the applications from organizations to join the task force requested by the West Virginia Coal Association. The task force will consider operating the state’s coal-fired power plants at higher capacity factors.
The commission has been alarmed by rising fuel costs and persistently low capacity factors reported by those utilities. The panel has contended that operating at higher capacity factors would lower costs recoverable from customers, encouraging self-generation over paying rising PJM market prices for purchased power.
American Electric Power’s and FirstEnergy’s West Virginia-serving utilities have cited rising fuel costs in requests for rate hikes in the past year.
Capacity factor is the ratio of electrical energy produced by a generating unit for a given time to the electrical energy that could have been produced at full power during the same span. PJM is the regional transmission organization that coordinates the movement of wholesale electricity in West Virginia and 12 other states.
The commission’s staff added the West Virginia Energy Users Group, West Virginians for Energy Freedom, the Sierra Club, the West Virginia University Center for Energy and Sustainable Development, and Longview Power LLC to the task force. The latter operates a 700-megawatt coal-fired facility near Maidsville in Monongalia County.
The task force is scheduled to hold its first meeting on Aug. 12.
The commission already had ruled the task force would include Appalachian Power, Wheeling Power, Mon Power, Potomac Edison, the West Virginia Coal Association and the Consumer Advocate Division.
The membership was announced in a staff memorandum from Public Service Commission Legal Division director Wendy Braswell on Friday.
The Consumer Advocate Division is an independent arm of the Public Service Commission that represents ratepayers. West Virginians for Energy Freedom consists of the West Virginia Citizen Action Group, Solar United Neighbors and Energy Efficient West Virginia. The West Virginia Energy Users Group is an association of large industrial users.
Two of the three applications the commission’s staff rejected came from two prominent environmentalist representatives who have been vocal critics of coal.
One of those applicants was the Kanawha Forest Coalition, a volunteer group that formed to stop surface mining around the Kanawha State Forest’s perimeter.
“The Kanawha Forest Coalition is a stakeholder with an interest in phasing out the use of coal in WV due to coal’s well-documented adverse impacts on human health, terrestrial and aquatic habitat, water quality, and global climate stability,” coalition representative Chad Cordell wrote in the group’s filing requesting task force admission.
Commission legal staff rejected an application from Vernon Haltom, executive director of Raleigh County-based anti-mountaintop removal mining group Coal River Mountain Watch.
Commission legal staff also denied an application from Berkeley County Solid Waste Authority member Matthew Grove.
The commission established the task force in a June 16 order that assigned its legal staff to chair the task force and choose additional task force members from other groups expressing interest. Within six months of its initial meeting, the task force must produce a final report.
Haltom finds the composition of the task force troubling, noting the commission’s three-member panel includes longtime former West Virginia Coal Association president Bill Raney after Gov. Jim Justice, a coal magnate, appointed Raney to the commission last year.
The commissioners won’t be participating in the task force, according to Braswell.
“I’m not surprised that the coal industry, coal utilities, and fossil fuel lawyers make up the bulk of the ‘task force’,” Haltom said in an email. “With the former president of the WV Coal Association on the PSC hearing cases involving his decades-long employer, and now coal interests dominating the ‘task force,’ we shouldn’t kid ourselves that its purpose is anything other than to push the coal industry’s plans to reap more profit from ratepayers and prop up this dirty, climate-killing and health-destroying industry.”
Commission spokeswoman Susan Small said Monday that neither the commission nor its staff would comment on the staff’s decision-making process.
The Coal Association requested the task force in April, contending it was needed to examine issues keeping Appalachian Power, Wheeling Power, Mon Power and Potomac Edison from operating their plants at a 69% capacity factor.
Appalachian Power and renewable energy advocates have questioned the commission’s 69% capacity factor requirement, saying it’s uneconomic.
In September, the commission required Appalachian Power’s John Amos plant in Putnam County, Mountaineer plant in Mason County and Wheeling Power’s Mitchell plant in Marshall County to operate with a capacity factor of 69%, citing concern that Appalachian Power might not be maximizing use of the plants.
American Electric Power Service Corp.’s director of coal, transportation and reagent procurement, Jeffrey Dial, recently testified in a commission filing that supply shortages and elevated prices constraining the coal market have greatly limited the companies’ ability to secure enough coal to achieve high capacity factors on a consistent basis.
Appalachian Power and Wheeling Power asked the commission in April to approve a $297 million increase in the rate that the companies charge for buying power or fuel to generate electricity, known as an Expanded Net Energy Cost rate. The rate increase would raise the monthly bill for a residential customer using 1,000 kilowatt-hours by $18.41 starting Sept. 1.
Appalachian Power cited rising energy and fuel costs as reasons for the proposed increase, which comes six weeks after the Public Service Commission ordered a $31.4 million Expanded Net Energy Cost rate increase to reflect a recalculation by the commission of reduced purchased power costs and additional fuel-handling costs incurred by Wheeling Power.
The companies’ combined under-recovery balance for fuel costs was $283.3 million as of April, according to a recent filing with the commission.
Mon Power and Potomac Edison reported they had an under-recovery balance of $135.4 million in May.
The commission in May approved an additional $94 million in recovery for Mon Power and Potomac Edison from ratepayers after the companies said they would need that much of a rate increase between May 1 and Dec. 31 to prevent additional fuel cost under-recoveries. The companies had said that costs of fuels for power generation increased due to elevated worldwide demand.
Braswell turned down a Gazette-Mail request to observe the task force’s meetings. Braswell claimed that, because commissioners won’t be participating in the task force and that the task force won’t include commissioners convening to make or consider a decision, the task force isn’t subject to the state Open Governmental Proceeding Act.
The West Virginia Ethics Commission has held in advisory opinions that state-convened task forces are subject to the Open Governmental Proceeding Act.
The Ethics Commission held in May that the state Tobacco Use and Cessation Task Force was subject to open meetings law, finding in part the task force was a public agency because it was tasked with making recommendations to a public agency.
The Ethics Commission issued similar, nonbinding advisory opinions regarding the Unemployment Compensation Solutions Task Force formed to submit a report to the governor in 2008, and an Elk Run water quality study group making recommendations to two Jefferson County municipalities in 2007.
The Public Service Commission ordered the task force’s chair to select task force members so as to construct a task force that will “produce thoughtful and balanced recommendations for the Commission and the Companies.”
