|The House Committee on Energy and Manufacturing discussed Committee Substitute for Committee Substitute for SB542, relating generally to public electric utilities and facilities fuel supply for existing coal-fired plants.The bill provides procedures to ensure that no more coal-fired plants close, and long-term state prosperity is maintained.
Notably, the bill requires any coal-fired power plant owned by a public electric utility, in order to ensure grid resiliency and homeland security, maintain a minimum 30-day aggregate coal supply under contract for the remainder of the life of those plants.
Additionally, before any public electric utility announces the retirement, the proposed shutdown of a unit, or the proposed sale of and electricity-generating plant to another operator, the public electric utility must give notice to the West Virginia Office of Homeland Security and Emergency Management, Public Service Commission of West Virginia, and the Legislature’s Joint Committee on Government and Finance.
Delegate Young’s questions of counsel revealed several ambiguities in the language of the bill — does “shutdown” refer to both long-term and short-term maintenance shutdowns; what is adequate notice in terms of means or timing?
Sammy Grey with First Energy indicated that the energy company typically keeps 30 or more days of coal supply. First Energy has two coal-fired plants in West Virginia. The company usually has long-term coal supply contracts. It is unlikely that the bill would impact rates, but because the policy is codified, the company may make decisions to comply with the law that would result in increased costs. He also discussed First Energy recent plans to reduce greenhouse gases by 30% by 2030 and ultimately to become carbon-neutral by 2050. He also clarifies that maintenance shutdowns are referred to “outages” so the bill would not require a notice.
Charlotte Lane, Chairwoman of the PSC, indicated that the bill does not appear to create an additional burden on the PSC. She also does not believe it puts any additional burdens on ratepayer than any other legislation. But the bill does not ask the PSC to consider the impact on ratepayers. With regard to the requirement that the company having to maintain a minimum 30-day aggregate coal supply under contract, she believes that it makes good sense, but it is not currently a requirement. Currently, the PSC only insists that the company keep an adequate supply of fuel on hand.
Chris Hamilton, with the WV Coal Association is asked what might occur if plants do not have an adequate supply of coal on hand. He suggests that inclement weather may result in losses of electrical power. He does not believe the bill requires energy plants to do anything that should not already be expected, i.e., that the plants should continue operating for the full extent of their lifetimes. He notes that while the state cannot dictate national energy policy but can do something to ensure that WV resources are continued to be used in West Virginia.
Under questioning by Delegate Hansen, Mr. Hamilton agrees that First Energy’s decision to decrease their carbon emissions are the result of the desire of private investors and not public policy.
Delegate Young makes the point with Mr. Hamilton that rather than 30% of electrical power being generated by coal in WV, the number is actually 90%. Consequently, she insists, the references to what recently occurred in Texas are irrelevant.
Russ Lang, chairman of the West Virginia Energy Users Group indicated that his organization does not have any objections to the bill.
The committee reported the bill to the full House with a recommendation that it do pass.
The committee also took up HCR90, to study the commercial discrimination of producers of coal, gas, oil, carbon-based energy, and other products in the State of West Virginia.
The resolution calls for the Joint Committee on Government and Finance to study the effect of the Board of Trustees of the West Virginia Public Employees Retirement System (“Board”) identifying all restricted businesses in which the Fund has direct or indirect holdings and the effect of the Board identifying the names of all restricted businesses into a restricted business list; and the effect of the Board updating the restricted business list at least on an annual basis. The committee made a technical amendment then reported the resolution, as amended, to the full House with a recommendation that it do pass, but that it first be referred to the Committee on Rules.
Meanwhile, over in Senate Government Organization, Committee Substitute for HB2667 was passed and would promote energy savings and efficiency in state buildings by implementing an energy savings program for assessment and implementation of energy savings goals for state buildings. An annual energy audit is required. It is estimated that this could result in a savings of $2.6 million annually. The bill is 2nd referenced to Finance.