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West Virginia Lawmakers Briefed on Power Plant Retirements



By Steven Allen Adams

May 11, 2023 - West Virginia lawmakers were briefed Tuesday on a report detailing concerns with the retirement of coal-fired plants central in the debate on whether to save the Pleasants Power plant.

Asim Haque, the vice president for State Policy and Member Services at PJM, briefed members of the Joint Standing Committee on Energy and Manufacturing on a Feb. 24 report released by PJM, titled “Energy Transition in PJM: Resource Retirements, Replacements and Risks.” Interim meetings were held at Marshall University at Huntington.

“Today, we have enough resources…we have enough watts and enough central reliability services for the grid to be completely reliable,” Haque said. “Demand is going up. We’re losing a lot of supply. Are we going to get an injection of supply so that supply and demand meet? That is something that … we are keeping a very close eye on, but that’s our mid-term concern.”

According to the report, coal-fired power plants are retiring at a rapid rate while the growth rate for electricity demand is expected to increase. While new sources of electricity – such as natural gas plants, wind, and solar farms – are coming online, they are not coming online quick enough to replace the power being lost as coal-fired plants retire.

“PJM’s interconnection queue is composed primarily of intermittent and limited-duration resources,” the February PJM report states. “Given the operating characteristics of these resources, we need multiple megawatts of these resources to replace 1 (megawatt) of thermal generation.”

According to the PJM analysis, more than 40 gigawatts of existing electric generation are at risk of retirement by 2030 due to power plant deactivations, announced retirements, and potential retirements of plants based on policy and economic considerations, representing more than 21% of PJM’s current installed capacity. Of those 40 gigawatts of retirements, 60% would come from the closure of coal-fired power plants, 30% from natural gas-fired plants, and 10% from other sources.

“The projections in this study indicate that the current pace of new entry would be insufficient to keep up with expected retirements and demand growth by 2030,” according to the report. “The completion rate (from queue to steel in the ground) would have to increase significantly to maintain required reserve margins.”

“It’s not a today issue, but we need to be thoughtful about it,” Haque said. “We have a very diverse fuel supply of thermal generators with a combination of coal, gas and (nuclear). We are going to need some combination of those in the future…as renewables continue to find their way on to the system, we’re going to have to have enough, and enough in the right places on the grid, of these thermal generators in order to continue to preserve reliability in the long run until a replacement technology is deployable at scale.”

The PJM report was heavily cited in the West Virginia Public Service Commission’s April 24 order authorizing Monongahela Power Co. and Potomac Edison Co. to continue negotiations with Texas-based Energy Transition and Environmental Management (ETEM) to finalize a letter of intent to maintain the Pleasants Power Plant and keep the plant’s 154 workers employed beginning in June and ending May 2024.

“PJM has studied the reliability quality of its near-term power supply and found that reliability is influenced by over-reliance on intermittent resources, mostly solar and wind,” the PSC wrote in its order. “The retirement of thermal sources, and likelihood of few, if any, new thermal resources is a major problem in the absence of massive build-up of storage capacity, which is highly unlikely.”

Once the companies agree on a letter of intent, they will be required to come again before the PSC for its approval and to sign off on any month-to-month reimbursement obligations. Mon Power and Potomac Edison had sought a $36 million temporary surcharge for residential, commercial, and industrial customers in North Central West Virginia and the Eastern Panhandle to cover costs and reimburse ETEM, though the companies have since admitted the costs could increase.

Several consumer advocates, clean energy and environmental groups filed a petition with the PSC on May 4 for reconsideration of its April 24 decision. As part of that petition, attorneys for the West Virginia Citizen Action Group, Solar United Neighbors, and Energy Efficient West Virginia raised concerns about the PSC citing the PJM report without those organizations getting the chance to scrutinize the report.

“The PJM report is based on a particular set of assumptions and projections about the future which may or may not be realized, and which, given the opportunity, the parties may dispute,” wrote attorney Emmett Pepper, the policy director for Energy Efficient West Virginia. “The parties should be afforded an opportunity to be heard on these disputed issues of fact.”

The petition also cites additional data from PJM showing that Pleasants Power was not considered a “Reliability Must Run” plant by PJM and its closure by the end of May had no bearing on PJM’s electricity reliability issues.

“In other words, the same entity cited so heavily in the April 24 Order – PJM – has already considered the reliability implications of Pleasants’ retirement and found no concerns,” Pepper wrote.

PJM Interconnection is a wholesale energy transmission company, also called a regional transmission organization, serving 13 states and Washington, D.C. It includes 400 member utilities and independent power producers. Founded in 1927, PJM and other regional transmission organizations allow generators of electricity and users to buy and sell power across the organization’s territory.