A panel of West Virginia senators approved a blitz of legislation Monday designed to promote fossil fuel use and expected to undercut renewable energy, signing off on measures that risk increased power bills for residential customers and public entities.
The legislation approved by the Senate Energy, Industry and Mining Committee came as its counterpart House of Delegates panel, the Energy and Public Works Committee, advanced a Gov. Patrick Morrisey-requested bill Appalachian Power representatives and community advocates also say could prove costly to ratepayers.
The Energy, Industry and Mining Committee approved legislation that:
- Is expected to effectively end solar power purchase agreements through which public entities may buy electric output, usually lower than the local utility rate
- Would determine how much utilities can profit from new electric generation based on a formula anticipated to favor fossil fuels
- Would introduce a potential penalty for those that enter into private agreements with West Virginia landowners for projects that use forestlands to decrease harmful carbon dioxide emissions.
- Would isolate coal, oil and gas minerals from storage of carbon dioxide underground
“We’ve got to either say we’re going to take advantage of our coal industry and prop it up, or we’re going to willy-nilly this thing,” Sen. Scott Allen Fuller, R-Wayne, said. “We can’t do that.”
‘Why are we having to go to green energy?’
Fuller was speaking during an Energy, Industry and Mining Committee meeting during a rare night meeting for the panel Monday in favor of Senate Bill 763.
The committee approved SB 763, which would prohibit public entities from entering into a power purchase agreement that exceeds five years in duration, though it would allow renewal at the conclusion of a previous contract term. Under SB 763, public entities would be barred from entering into a power purchase agreement unless it provides for enough on-site power storage to be a backup source of electricity that could meet facility power demands for at least 48 hours during an outage.
In power purchase agreements, the customer buys electricity from an energy project at a predetermined rate, often between 15 and 20 years. The customer buys the system’s electric output from the solar services provider for a predetermined period at a fixed rate, usually lower than the local utility’s retail rate, while the solar services provider gains tax credits and income from electricity sales.
But solar power purchase agreements wouldn’t be expected to meet SB 763’s power storage requirement.
Senate Bill 544 of 2023, which raised caps on power purchase agreements for residential and commercial customers, allowed Calhoun County Schools to save a projected $740,000 over the next 25 years with no upfront cost for planned installation of two solar arrays.
But public entities like Calhoun County Schools would have to renegotiate new power purchase agreements under SB 763. Sen. Craig Hart, R-Mingo, who sponsored the legislation, claimed rate increases built into contracts he had reviewed were excessive.
“I don’t think a school is a good place to make a political statement about your utilities,” Hart said.
Fuller argued SB 763 was an opportunity to reject renewable energy and questioned the scientific consensus that climate change is real and driven by human activity.
“Why are we having to go to green energy? And we all know that the climate change ... is not real,” Fuller said.
In a 7-3 vote, the committee rejected an amendment proposed by Sen. Ben Queen, R-Harrison, that would have removed the prohibition against public entities entering into a power purchase agreement unless it provides for enough on-site power storage to be a backup source of electricity that could meet facility power demands for at least 48 hours during an outage.
“I think the intent, in my opinion, is just to remove this section of code to make it very difficult to allow school systems to build a solar array like this,” Queen said.
“[I]f somebody wants to get rid of solar, just say you want to get rid of solar instead of trying to beat around the bush,” Assistant Minority Leader Joey Garcia, D-Marion, said.
Garcia argued SB 763 is “the exact opposite of what a free market is” and would disincentivize companies that could provide better rates for ratepayers over an extended period of time beyond the five-year increments the bill would set for revisiting power purchase agreements.
“This doesn’t make any sense whatsoever, and it’s really frustrating, because you can’t say that you want your power rates to go down for people and then do something like this, which does exactly the opposite,” Garcia said.
SB 763 is under full Senate consideration.
APCo, Energy Efficient W.Va. speak against SB 505
The Energy, Industry and Mining Committee recalled SB 505, which it previously advanced, and added to it a formula for determining a utility’s rate of return for new electric generation that would emphasize the generation resource’s capacity value, or contribution toward meeting peak energy demand.
Behind the formula was Isaac Orr, vice president of research at Always On Energy Research, a pro-fossil fuel, anti-wind energy analysis group, who previously called the legislation “my idea” in committee testimony. Orr indicated the formula hasn’t been used elsewhere and would account for what he said was increased reliability values for coal, gas and nuclear versus intermittent energy sources like wind and solar.
But Appalachian Power spokesperson Karen Wissing told the Gazette-Mail Tuesday SB 505 would discourage future investment in generation and transmission in West Virginia.
Wissing said the bill’s formula appears to reduce the allowed return on investments in new generation and transmission, meaning the allowed return would only be a percentage of what it would be under current, traditional ratemaking.
SB 505 would require an evaluation of each generation unit’s ability to meet an electric utility’s capacity contributions to system reliability during times of peak power demand for each unit an applicant proposes to remove from its generation portfolio.
SB 505 is under full Senate consideration after Government Organization Committee Chair Patricia Rucker, R-Jefferson, moved a second reference to her committee be discarded.
“Ratepayers will have higher bills if it becomes law and is operational,” Energy Efficient West Virginia policy director Emmett Pepper said of SB 505 Monday.
Governor’s Office rep calls local control ‘red tape’
The House Energy and Public Works Committee on Monday advanced to the markup stage House Bill 2014, which would allow nonrenewable energy to be generated within special business districts created by a 2022 law designed to facilitate microgrid development.
The data center-welcoming HB 2014 is a farther-reaching bill than the similar SB 552, a bill the Senate passed this month that would amend law created by 2022’s SB 4001 that established a Department of Economic Development-administered program that permitted exemption from Public Service Commission requirements for provision of renewable energy within “high impact” industrial business development districts.
- Require the PSC to establish capacity factors for existing generation, a measure renewing concerns the agency would force coal-fired plants to run at uneconomic levels
- Require generating public utilities to plan incoming and outgoing coal to maintain an average annual minimum 30-day coal supply on site at each power plant with the PSC allowed to issue corresponding rules
- Mandate all electric utilities analyze action needed to extend the life of generating units beyond their planned retirement date
- Shield certified “high impact” data centers and microgrid districts from county or municipal zoning, land use ordinances, inspection or code enforcement
“[T]hose local rules and requirements that sometimes people would just refer to generally as red tape, those are pushed out of the way,” Governor’s Office policy director Curtis Capehart told the Energy and Public Works Committee.
“As written, the bill prevents local governments from establishing any sort of oversight of data centers, whether that’s siting, land use, noise and more,” West Virginia Environmental Council vice president Quenton King told the Gazette-Mail Tuesday.
“This is at odds with the small government and local control philosophy we hear so much about.”
Farm Bureau rep calls SB carbon registry bill ‘an overreach’
The Senate Energy, Industry and Mining Committee on Monday advanced SB 730, which would create a forest carbon registry to track properties in West Virginia covered by carbon offset agreements.
SB 730 is a response to a growing number of private programs that enable the carbon sequestered by enrolled West Virginia landowners to become part of a carbon market in the form of carbon credits. Carbon credits are permits that companies use to offset the carbon dioxide they emit. Credits represent the removal of one metric ton of carbon dioxide from the atmosphere. Landowners profit from deals with companies moving toward carbon neutrality by a given date.
As approved by the Energy, Industry and Mining panel, SB 730 would impose a $1,000 penalty on purchasers for failing to record with a Division of Forestry-administered registry a carbon offset agreement. The registry would include the legal description of any property covered by such an agreement, geospatial data delineating the boundaries of those properties and names and contact information of landowners and purchasers. The Division of Forestry could establish rules that set fees to cover administrative costs, a move West Virginia Farm Bureau representative Dwayne O’Dell told the committee would constitute a “tax increase.”
“We just see that this as an overreach of government and an expansion of government we don’t see as necessary for West Virginia,” O’Dell said.
Led in sponsorship by Sen. Eric Tarr, R-Putnam, SB 730 now goes before the Senate Finance Committee.
Industry’s EQT backs an ‘oil, gas, coal bill’
The Energy, Industry and Mining Committee also advanced SB 899, which is designed to protect coal, oil and gas minerals from storage of carbon dioxide underground.
SB 899 would require that a carbon storage operator design a carbon sequestration project to isolate any existing or future production from a commercially valuable mineral, including a coal, oil or gas estate, from an underground carbon plume.
“It’s an oil, gas, coal bill that will protect from potential carbon capture issues so we can focus on our base business, which is extracting natural resources,” John Bane, government affairs director at Pittsburgh-based EQT Corp., one of the nation’s largest gas producers, told the committee.
Citing SB 505 and HB 2014, King argued West Virginia lawmakers don’t actually want to level the state’s energy playing field.
“Many say we should be an ‘all of the above’ energy state,” said King, of the West Virginia Environmental Council. “But the legislation advancing this year doesn’t reflect that.”
