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W.Va. coal targets policies to maintain coal burn in state legislative session

West Virginia coal producers hope to push more policies favorable to the fuel in the state's legislative session this year, including laws to encourage in-state consumption of the fuel, spark the development of alternative coal uses and lower the industry's tax burden.

The West Virginia Coal Association and the United Mine Workers of America joined together on Jan. 8 to outline policy proposals for the state legislature in Charleston. The trade association shared 16 recommendations, requesting the state to "assign the highest priority to preserving coal mining and coal-fired electricity."

"About half of the legislative body attended," West Virginia Coal Association Vice President Chris Hamilton said in an interview. "This particular makeup of the legislature — not terribly different from previous ones — have a keen interest in coal and fossil fuel industries generally within the state of West Virginia."

The group is asking lawmakers to encourage power producers to maintain 2019 levels of coal consumed by the plants while compelling power producers to file three-year plans with the West Virginia Public Service Commission indicating planned generation and distribution of electricity and how 2018 coal-fired generation levels will be maintained.

"We think that these plants are so central to the state's economy from all aspects," Hamilton said. "The whole genesis here is to save the coal jobs, save the plant jobs, save this infusion of economic activities for this state, and save these local communities where the plants are located."

The trade organization is also asking for upgrade cost recovery measures and other incentives for in-state power producers to upgrade existing coal plants to ensure optimal efficiency and operational life. The group points to the Longview Power plant near Morgantown, W.Va., a highly efficient operation compared to most U.S. coal plants, as a standard for other coal plants in the state.

One way to prevent future uncertainty, Hamilton said, would be for the state to expedite utility compliance with the Affordable Clean Energy rule rolled out by the U.S. Environmental Protection Agency under the Trump administration. Doing so could provide a legal defense against more stringent carbon dioxide regulations from new administrations.

State lawmakers should also look to compel in-state power producers to maintain a 90-day "base fuel" supply on-site, according to the recommendations. The U.S. Department of Energy under the Trump administration floated a similar measure for the U.S., but the idea generated significant backlash from multiple stakeholders across the energy market and was never adopted.

"We figure there's a good rational basis that can be debated or argued for keeping these plants open for economic purposes," Hamilton said. "When you factor in homeland security policies, anti-terrorism policies — if we want to sustain this 24/7 delivery of electricity, we think the only way to guarantee that is with coal-fired electricity."

Coal interests in the state are also targeting several legislative programs to encourage the alternative use of coal, with West Virginia Gov. Jim Justice mentioning the concept in his Jan. 8 State of the State Address. Justice announced that Ramaco Carbon LLC is planning to open a research facility to explore methods of making carbon fiber from coal in the state.

The West Virginia Coal Association will ask state lawmakers to help promote future investment opportunities in the space, authorize officials to negotiate ways to turn former coal generating facilities into alternative coal facilities and provide funding to facilitate private-public partnerships for alternative coal use projects.

"There are jobs being created today all over the world [using alternative coal technology]," Hamilton said. "We think this potentially will serve to offset the job and production losses being recorded on the generation side of the business."

Hamilton said the group also has its eye on helping the state develop a partnership with the Trump administration to establish a demonstration modular coal plant in West Virginia. The administration, through the DOE, has sought to create designs for a new style of coal-fired power plant that is smaller, more flexible and better equipped to compete with natural gas and renewable energy generation.

Hamilton said the group would also take its usual approach to try to lower the industry's tax burden in the state. Part of its goal in that regard is to extend tax rebates to thermal coal producers, eliminate personal property tax on certain assets, adjust valuations on unmined mineral taxes and reduce the business and occupation tax on coal-fired electrical generation.

"We don't expect this to be an easy lift, that's why you find those items toward the end of this platform," Hamilton said. "You know they are something we are always going to be talking about and always going to be pushing for, but we understand where they sit in the list of priorities."