Client teams say PSC job pressure report on coal-fired energy vegetation falls brief on its mission to avoid wasting ratepayers cash

MORGANTOWN – A coalition of consumer- and energy-advocacy teams has expressed disappointment with the report issued by a job pressure appointed by the Public Service Fee to research how elevated coal utilization at West Virginia’s energy vegetation might save ratepayers cash.

“Sadly, the duty pressure turned out to be a missed alternative, with well-proven methods, resembling aggressive useful resource procurement processes and elevated funding in power effectivity, dismissed,” the coalition stated in feedback submitted to the PSC final week.

“On the similar time,” the group wrote, “steps that may merely double-down on the state’s overreliance on a single gas, resembling long term and Locational Marginal Pricing [explained below] coal contracts and elevated operation of coal vegetation, superior with little to no assist or evaluation suggesting that they’d in some way scale back power prices.”

The concept of the duty pressure originated in March 2022, when the West Virginia Coal Affiliation wrote to the PSC saying, “conventional coal provide contracting phrases provided by the state’s utilities have been inadequate to permit producers to produce the coal essential to function the facility vegetation to the utmost advantage of state ratepayers.”

WVCA adopted up with an April 2022 letter to the PSC requesting the duty pressure, noting that the PSC acknowledged the worth of the coal-fired vegetation in its directive to the state’s 4 energy corporations – Mon Energy, Potomac Edison, Appalachian Energy and Wheeling Energy – to function their coal-fired vegetation at 69% capability.

When the vegetation don’t function, WVCA stated, West Virginians pay extra for energy bought off the wholesale market (as a lot as 450% extra throughout peak demand), they usually lose the advantage of “off system” gross sales to the PJM regional market.

In June 2022, the PSC licensed the duty pressure, which finally included these members: WVCA; the 4 energy corporations; the PSC’s Client Advocate Division; PSC employees; Longview Energy; West Virginia Power Customers Group (industrial prospects utilizing excessive quantities of energy); and West Virginians for Power Freedom, which included West Virginia Citizen Motion Group, Photo voltaic United Neighbors and Power Environment friendly West Virginia; Sierra Membership; and the WVU Heart for Power and Sustainable Growth.

The duty pressure started assembly in August 2022 and issued its ultimate report Aug. 14 this 12 months.

The report listed a number of conclusions. One, a number of the considerations expressed by WVCA have been addressed by means of subsequent PSC orders to the facility corporations and improved coal market circumstances.

Two, the prospect of longer-term coal provide contracts is one thing the facility corporations is contemplating.

Three, the coal market is experiencing some volatility from components – resembling provide chain disruptions – that beforehand would have been insignificant. “That is possible associated to the weird state of affairs brought on by the battle in Ukraine and the present state of the European power market, in addition to the lingering results from the COVID-19 pandemic.” All of that makes predicting costs harder.

And fifth, PJM is going through new challenges as the combination of energy sources evolves and contains extra renewables.

All of those components result in some hedging.

“Maybe the one factor that each one Process Power members agreed on is that the power market and gas market are each altering in ways in which haven’t historically occurred. All of those points will finally impact West Virginia ratepayers. What is helpful within the short-term will not be benefcial within the long-term.”

All of this, the report stated, “make it troublesome to level to anybody factor that may scale back the prices paid by West Virginia ratepayers.”

Citing all of the constructive adjustments since April 2002, plus new federal and PJM guidelines, “the Process Power is hopeful that the mixture of those occasions will finally create a clearer path towards what must be performed to reverse the rising prices to West Virginia electrical utility ratepayers.”

Client teams’ response

WVCAG, Photo voltaic United Neighbors and Power Environment friendly West Virginia pooled their ideas of their response filed final week.

One, they are saying, is that reliance on a single gas supply, coal, is exacerbating affordability considerations within the state. From 2005-22, electrical energy charges have climbed 113%, greater than every other state. That’s pushed largely by the reliance on coal, they are saying. West Virginia’s energy provide is 90% coal, whereas the subsequent three states are all beneath 75% and the nationwide common is beneath 20%.

Two, the duty pressure missed two vital suggestions they are saying. One is aggressive useful resource procurement. This implies energy corporations soliciting all-source bids to acquire aggressive market costs. There isn’t any proof that longer-term contracts and LMP [a way for wholesale electric energy prices to reflect the value of electric energy at different locations, according to ISO New England, that region’s power grid] scale back prices.

“It’s extremely unlikely that additional locking utilities right into a pricey gas supply for years to return could be economically useful for ratepayers.” Renewables are getting cheaper, pure fuel costs have fallen to pre-2022 ranges and power costs general have declined since then.

Additionally, as evidenced in current provide points, having a coal contract doesn’t assure the coal will likely be delivered, they are saying.

The opposite advice, the coalition wrote, is investing in power effectivity. They website a report mentioned throughout the conferences: “Power effectivity is a low-risk, low-cost power useful resource that gives direct financial savings to shoppers, encourages funding throughout different sectors of the economic system, displaces the necessity for pricey investments in new power provide infrastructure, creates new employment alternatives, and reduces emissions of greenhouse gases and different dangerous pollution.”

Based mostly on that report, the coalition informed the PSC: “Now’s the time for West Virginia to develop its power effectivity investments because of the provision of an estimated $140 million in federal funding for power effectivity programming within the state. This funding, nonetheless, is essentially a one-time alternative, so it’s crucial that the Fee and utilities develop and implement packages to maximise and maintain the power price financial savings for utility prospects that such power effectivity would offer.”

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