John Raby/AP Photo
Sen. Joe Manchin (D-WV) and Competitive Power Ventures CEO Gary Lambert, right, speak at a news conference, September 16, 2022, in Charleston, West Virginia. CPV plans to build a natural gas power plant designed to capture climate-changing carbon in West Virginia.
Facing rising electricity costs and struggling to attract companies, officials in West Virginia are warring internally over bids to diversify the state’s energy mix away from coal and to host clean-energy companies.
Much of the state’s political class continues to support the expansion of coal, and active bills this legislative session would promote faster coal development. Republican Gov. Jim Justice owns multiple coal companies, and other lawmakers, including Democratic Sen. Joe Manchin, have deep ties to the industry. (The two may square off in Manchin’s 2024 Senate re-election race.)
But the state’s hardened bloc of coal defenders is showing fissures. Several pro-coal lawmakers support clean-energy startups and alternative electricity sources. The state last year lifted a ban on nuclear energy. And earlier this month, after charged debate, the legislature approved a $115 million subsidy for a new battery plant at the site of a shuttered steel mill.
Massachusetts-based Form Energy will produce iron-air batteries, a technology that could solve shortcomings in lithium-ion batteries, which can store energy short-term but do not yet work for longer time periods. Incentives in the federal Inflation Reduction Act, as well as West Virginia’s own subsidy, helped attract the plant.
While the battery producer would not compete directly with West Virginia’s fossil fuel utilities, some lawmakers argued that it represents a shift to renewable energy, backed by out-of-state investors, that is a longer-term threat to the state’s economy and values.
“This is coal money we’re giving to a woke company,” Republican state Sen. Rupie Phillips told the Charleston Gazette-Mail. “Their main goal is to shut fossil fuel down.” Pat McGeehan, a Republican delegate whose district borders the site where the plant will be built, opposed the subsidies over the firm’s backing by Breakthrough Energy Ventures, a sustainable-energy fund started by Bill Gates. McGeehan argued that its foreign investors could threaten national security and the state’s “long-standing values and traditions.”
But the battery plant was backed by a majority of the heavily Republican legislature, including some lawmakers who continue to press for the expansion of coal. With coal looking increasingly obsolete, if for no other reason than it is no longer price-competitive with alternative forms of energy, politicians are increasingly divided over whether to welcome new renewable facilities, as well as whether the state should consume more of its own prodigious natural gas resources.
“To the degree West Virginia is trying to diversify its energy portfolio, its principal focus is on gas,” Sean O’Leary, a senior researcher at the Ohio River Valley Institute, told the Prospect. “But folks are still worried and on particular projects and bills, some are starting to wander a little ways off the coal reservation.”
WEST VIRGINIA STANDS TO RECEIVE more than $9,000 per person in investment from the Inflation Reduction Act, a bill largely sketched out by Manchin, under the “ambitious” scenario model by research group RMI. That makes it the third-highest likely per capita recipient of IRA subsidies, after Wyoming and North Dakota, which are other top producers of coal and shale oil.
Those investments could help bring renewable energy like wind and solar to the Mountain State. They could also grow existing fossil fuel production by building out carbon-intensive infrastructure, such as a proposed blue hydrogen hub that would draw on West Virginia’s stores of natural gas. Under the IRA’s technology-neutral subsidies, marginally greener fuel production is eligible for assistance, and nearly everything is greener than coal.
Coal continues to generate the overwhelming share of West Virginia’s electricity, providing 91 percent of power in 2021. That has been true even as gas production has grown. West Virginia is the nation’s fourth-largest producer of natural gas, which surpassed coal production in 2019, but gas fuels just 4 percent of its electricity.
Partly as a result of continued reliance on coal, electric rates have risen steeply over the past two decades. In 2021, the state’s industry-compliant Public Service Commission approved upgrades at three aging coal-fired power plants, which are expected to keep them operational through 2040. Neighboring Kentucky and Virginia refused to impose the costs of those upgrades on their own ratepayers, meaning West Virginia residents will shoulder the full $448 million cost of the upgrades. Coal prices also rose dramatically in 2022, driven partly by post-pandemic power demand and the war in Ukraine.
Industrial power rates are kept low, meanwhile, with commercial clients paying half the rate of residential customers. The state has long boasted about its low-cost coal power for manufacturing. But coal reliance could become a problem for attracting larger companies, which are implementing sustainability standards that can’t be met in a state where nearly all power is provided by coal.
In January, the gas lobby and the West Virginia Manufacturers Association pushed for a bill that would direct the state Department of Economic Development to seek out sites for natural gas electric generation and encourage rapid permitting and development at those sites.
“West Virginia’s natural gas producers need more local utilization, and the bill provides a much-needed signal to investors that we are open for business with power generation projects,” Gas and Oil Association of West Virginia Executive Director Charlie Burd told the Gazette-Mail. But the bill, titled the Grid Stabilization and Security Act, lost steam and last week was placed on the House’s inactive calendar.
Instead, lawmakers moved ahead with a bill instructing the department to accelerate coal power generation projects, which argues that more coal would “stabilize the price of electricity while increasing its reliability and availability.”
Meanwhile, the Office of Coalfield Community Development, which was originally set up to help West Virginia transition away from coal, is now being called in to help revive the industry. A new bill directs the office to recruit coal miners, create public programming on the benefits of coal, and identify coal-using manufacturers in order to “sustain, protect, and expand their continued operation and reliance on West Virginia coal.”
Perhaps surprisingly, however, several supporters of that legislation also voted in favor of promoting gas, subsidizing the new battery plant, and lifting the ban on nuclear.
Supporters like Democratic Delegate Evan Hansen have suggested that old coal plants could be refitted with small nuclear reactors. A September coal-to-nuclear transition report by the Department of Energy, which studied nearly 400 retired and operating coal power plants, found that 80 percent are good candidates to be retooled with an advanced nuclear reactor.
The key impetus for lifting the ban seems to have been the desire to attract companies that use clean energy. Both the West Virginia Manufacturers Association and West Virginia Chamber of Commerce supported lifting the ban, which had been in place since 1996.
In January of last year, the steelmaker Nucor announced a new sheet steel mill in West Virginia. Rather than relying on coal-fired furnaces, Nucor pioneered use of the electric-arc furnace for steelmaking, and has recently announced new sustainability commitments. Later that same month, the House and Senate voted to overturn the ban on nuclear power.
