IEEFA U.S.: West Virginia can prepare for the energy transition and revive struggling coal communities

Coal communities can thrive again through partnerships and policies that recognize changing energy economy

West Virginia has been feeling the effects of the decline of the coal economy for the past decade. Local communities and the state need to be partners to protect each other from the fallout and to create new opportunities.

The declining cost of renewable energy is eating into coal’s market share

The decline of coal is not going to reverse itself. The glut of natural gas from fracking has been the primary driver that has made our nation’s aging fleet of coal-fired power plants economically uncompetitive over the past decade. And the declining cost of renewable energy is increasingly eating into coal’s market share. Nationally, coal made up only 20% of electricity generation in 2020, down from 46% in 2010. It is projected to decline to as low as 11% over the next decade, according to financial analysts at Moody’s.

IT IS UNFORTUNATE THAT THE WEST VIRGINIA LEGISLATURE RECENTLY PASSED UP THE OPPORTUNITY to start the process of providing resources by rejecting a measure to create a Coal Community Comeback Plan, despite support from the United Mine Workers union and some coalfield legislators. The legislation would have directed the Public Service Commission to create a plan that uses West Virginia’s remaining coal assets efficiently, while bringing new opportunities and new resources to the state.

When a coal plant closes, taxes and jobs are lost. But it is not inevitable that the closure of a plant (or a coal mine) means that a community loses its spirit.

Several years ago, I worked with a labor and environmental coalition in Western New York to plan for the closure of a coal-fired power plant. The imminent plant closure spurred people into action. The state recognized the long-term commitment of the community to the state’s economy and came up with revenue to make sure property taxes were kept low, and teachers, firefighters and police kept their jobs. The time was used to put together a plan to bring in new industry.

The O’Halleran bill would set aside $1.3 billion to help coal communities

Colorado communities banded together and passed a state law in 2019 that included plans for wage replacement and other support to workers, infrastructure investment and local business retention and development in communities affected by coal plant and mine closures. Rep. Tom O’Halleran, D-Ariz., recently introduced a bill that would set aside more than $1.3 billion over the next decade to bring jobs, revenue and economic growth to communities hit by coal plant closures.

APPALACHIAN POWER IS CONSIDERING CLOSING THE MITCHELL POWER PLANT in Marshall County in 2028. Given seven years notice, the state, utility and local community would have a real opportunity to develop a plan that keeps incomes intact while creating new jobs and businesses. A good plan backed by local and state government, business, labor and community leaders is a powerful force. Together, business investment and federal resources can be combined to revive West Virginia’s economy.

West Virginia utilities have shut down six coal plants in the state over the past decade. The state’s failure to plan for these closures has not served workers or communities, and it has not brought back the West Virginia coal industry. It is past time to learn from the example of other states and begin developing the resources and partnerships needed to meet the challenges of the changing energy economy.

Tom Sanzillo, director of financial analysis at the Institute for Energy Economics and Financial Analysis, is the author of several energy-related studies and has 30 years of experience in finance, including as first deputy comptroller for New York state.

*This column appeared in the Charleston Gazette-Mail on May 18, 2021. Tom Sanzillo: A way for WV to address coal’s decline (Opinion)

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