CHARLESTON — The House Energy Committee spent a contentious two hours gnashing on a bill intended to draw green-minded manufacturers and high-tech firms with renewable energy portfolio goals into the state.
Supporters of HB 4562 said it could create jobs and spur economic growth. Opponents said it could raise consumer power rates with no firm promise of any companies coming and could further diminish the already ailing coal industry.
The bill is called the Renewable Energy Facilities Program and came at the request of the state Department of Commerce.
Sponsors include House leaders and committee leaders along with the House minority leader and Delegate Evan Hansen, D-Monongalia, who said the bill is a compromise alternative to his solar-program MOJO bill (HB 4172, which won’t see committee action).
The bill refers to renewable portfolio-minded companies as its reason for existence. It allows electric utilities (there are two in the state: FirstEnergy and American Electric Power) to build or buy and then own and operate a solar plant. Any single plant may produce up to 50 megawatts (MW) of power (until a certain sales threshold is reached), with a limit of 200 MW for each parent company and 400 MW statewide.
The bill provides an expedited Public Service Commission approval process.
One of the rubs for many of the delegates is the bill’s provision to allow the utilities to recover the facility’s costs by raising consumer rates until such time as a company wishing to buy the power does so. Then, at the utility company’s next rate review by the PSC, the company would absorb costs proportionate to its renewable power use and consumers would have the increases credited back.
Steven Ferguson, with AEP subsidiary Appalachian Power (APCO), tried to explain another aspect of the bill that took the delegates a long time to grasp. The companies wouldn’t be buying the solar power directly from the utilities. APCO, Mon Power and Potomac Edison all sell their power into the PJM regional grid and buy it back from PJM.
The companies would essentially be buying tokens – Renewable Energy Certificates.
Steve Stewart, also with APCO, said that the solar facility capacity limits are intentionally small, to minimize impacts on ratepayers while testing the program’s effectiveness. Other witnesses explained that a single manufacturer might use one solar plant’s entire 50 MW output.
Todd Hooker, with Commerce’s Development Office, said West Virginia’s renewables portfolio is often one of the first questions companies ask about when searching for sites. Some specifically want solar; and while West Virginia has hydro and wind, it has little existing solar capacity.
The program would serve as a marketing too, he said; there are no commitments from any companies to come here if the bill passes.
That lack of a commitment worried many delegates, such as Delegate Patrick martin, R-Lewis, and even some of the bill’s co-sponsors, such as Minority Leader Tim Miley, D-Harrison.
Distrust of the bill was bipartisan. Delegate Scott Cadle, R-Mason, worried about the effects on the coal-fired plants in his district.
So did West Virginia Coal Association Vice President Chris Hamilton, who mentioned the 562 coal plants that have shut down nationwide in the last decade, including 18 in West Virginia. Coal plants contribute $1 of every $6 generated by the state’s economy, he said.
He said of the eight coal plants still in operation: “They are truly Magic Kingdoms in the state of West Virginia.” The association won’t support the bill unless action is also taken to shore up the state’s coal-fired fleet.
Hansen responded to Hamilton by pointing out that about 90% of the state’s power is still generated by coal. So drawing green-minded companies here would in fact boost the coal industry by increasing the demand for coal power, from the companies themselves and all their workers establishing homes here, he said.
Members had more questions to ask and more witnesses to call, but after two hours another committee needed the room, so Energy chair and bill lead sponsor Bill Anderson, R-Wood, told the members they’ll resume work on it on Tuesday.
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