Latest / Commentary - TJ Meadows / Proposed Legislative Rule Could Change Electricity in West Virginia

Transcript

Proposed Legislative Rule Could Change Electricity in West Virginia · Commentary - TJ Meadows

• 0:00
  Speaker 1: Throughout the legislative process. Bills often direct state agencies to
• 0:05
  Speaker 1: write detailed rules implementing the laws passed by the legislature.
• 0:10
  Speaker 1: That's where consequential public policy can hide in documents most
• 0:15
  Speaker 1: citizens will never read. Consider House Built twenty fourteen, the
• 0:19
  Speaker 1: Data Center legislation passed a few years back. The law
• 0:23
  Speaker 1: directs West Virginia's Public Service Commission to develop rules requiring
• 0:28
  Speaker 1: utilities to maintain thermal baseload plants so they can achieve
• 0:33
  Speaker 1: at least a sixty nine percent capacity factor. Capacity factor
• 0:39
  Speaker 1: measures how much electricity a plant generates compared with how
• 0:43
  Speaker 1: much it could generate by operating continuously. The debate is straightforward,
• 0:50
  Speaker 1: how frequently should West Virginia's power plants run and how
• 0:53
  Speaker 1: often should utilities purchase cheaper electricity from the regional market.
• 0:59
  Speaker 1: PJM normally relies on economic dispatch. Power producers submit bids,
• 1:05
  Speaker 1: and the lowest cost available plants generally run first, but
• 1:10
  Speaker 1: the PSC's proposed rule says utilities are expected to use
• 1:14
  Speaker 1: quote self scheduling. That means telling PJM a plant will
• 1:19
  Speaker 1: operate regardless of whether its bid clears the market. The
• 1:24
  Speaker 1: plant may run even when producing its electricity costs more
• 1:28
  Speaker 1: than the market price. Who pays the difference? You do?
• 1:33
  Speaker 1: The electric customer? Supporters argue that running West Virginia's coal
• 1:37
  Speaker 1: plants more frequently would preserve jobs, strengthen coal producing communities,
• 1:43
  Speaker 1: and provide dependable baseload power. Coal Association President Chris Hamilton
• 1:48
  Speaker 1: also argues pjm's dispatch system is susceptible to anti coal
• 1:54
  Speaker 1: political pressures, But natural gas advocates say the policy would
• 1:58
  Speaker 1: interfere with economic day dispatch, increase electric bills, and subsidize
• 2:03
  Speaker 1: coal at the expense of natural gas, another major West
• 2:08
  Speaker 1: Virginia industry. Gas currently produces far more of pjam's electricity
• 2:13
  Speaker 1: than coal. West Virginia sits atop the Marcellus Shale, and
• 2:17
  Speaker 1: several gas fired power plants have been proposed this year alone.
• 2:22
  Speaker 1: So should state government favor one domestic energy industry over another.
• 2:27
  Speaker 1: Delegate Kayla Young warns that mandatory self scheduling will guarantee
• 2:31
  Speaker 1: higher bills. She points to Ohio, where customers repeatedly paid
• 2:36
  Speaker 1: roughly four hundred thousand dollars a day to support uneconomic
• 2:40
  Speaker 1: power plants before the policy was repealed. The proposed rule
• 2:44
  Speaker 1: still faces public comment review by the legislature's Rulemaking Review
• 2:49
  Speaker 1: Committee and eventually a vote by the full legislature. Boiled down,
• 2:54
  Speaker 1: the question is this, should West Virginia require coal plants
• 2:59
  Speaker 1: to run even when their electricity is more expensive because
• 3:02
  Speaker 1: doing so may produce broader economic benefits? And how does
• 3:07
  Speaker 1: that square with the need for affordable electricity, especially in
• 3:11
  Speaker 1: these times. One principle seems fundamental. Government rarely produces lasting
• 3:18
  Speaker 1: public good by picking winners and losers. Citizens must now
• 3:22
  Speaker 1: weigh in before the policy becomes final, and they must
• 3:26
  Speaker 1: live with the consequences. This is the lesson, a lesson
• 3:30
  Speaker 1: in paying attention. Legislative rules carry the force of law,
• 3:34
  Speaker 1: even though most of us never read them. Then when
• 3:38
  Speaker 1: the consequences arrive, we wonder how things became the way
• 3:43
  Speaker 1: they are. This is how