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Coal-Backed Effort to Stop West Virginia Gas-Fired Power Plant Falls Short

The coal-backed Ohio Valley Jobs Alliance (OVJA) has failed in another effort to stop the construction of a proposed natural gas-fired power plant in West Virginia after the state Supreme Court affirmed the facility’s siting permit.

The OVJA, which has received legal funding from Murray Energy Corp., one of the nation’s largest coal producers, had petitioned the West Virginia Supreme Court to hear its appeal of the state Public Service Commission’s (PSC) order granting a siting permit. The permit authorized construction and operation of Energy Solutions Consortium LLC’s (ESC) 830 MW Brooke County power plant. 

ESC has also proposed another 550 MW gas-fired plant in Harrison County, WV, that it has partnered to build with Caithness Energy LLC. The company advanced another 595 MW gas-fired project in Marshall County, WV, that it sold in 2015. That project is still under development after years of planning and legal delays. OVJA has challenged regulatory approvals for all the facilities.

In the Brooke County case, the alliance argued that the PSC should have required a better analysis of the tax breaks ESC is receiving for the facility. The group also claimed that the PSC “erred in finding” that the project is in the public interest.

The nearly $1 billion plant would consume about $200 million of natural gas annually and have the ability to power about 700,000 homes. Brooke County and ESC agreed to a thirty-year deal during which the plant would be exempt from ad valorem property taxes and instead make payments that would generate a minimum of $7.3 million.

While the high court agreed that ESC should have submitted more details about the tax arrangement, it found such an analysis is “one small piece of the larger and extremely extensive” permit application process that the company “substantially” complied with. The justices also found that OVJA failed to show that the project, which is expected to create thousands of jobs during construction, is not in the public interest.

The ruling clears a path forward for ESC’s facility at a time when others like it have been proliferating in nearby Ohio and Pennsylvania as cheap shale gas supplies have made the fuel attractive to power generators.

In fact, gas is dominating the broader PJM Interconnection, which serves all or parts of 13 states and the District of Columbia, including shale-rich Ohio, Pennsylvania and  West Virginia. Gas-fired facilities are running more frequently in the PJM market, where about 25 gas-fired facilities are under construction or being upgraded, according to the grid operator’s service queue. 

West Virginia, long a leader in coal production, currently produces more than 1 Tcf of natural gas annually thanks to the Marcellus and Utica shales. But the state has so far lost out on the gas-fired power building boom. There are just three older peaking plants in the state that use smaller amounts of natural gas to generate electricity, but they rarely operate, according to the West Virginia Department of Environmental Protection.

While ESC said in a statement that it was pleased with the Supreme Court’s ruling, it remains unclear when construction might start on the Brooke County facility.

While it was the first time a challenge involving the new gas-fired facilities reached the Supreme Court, OVJA also lost a similar permit challenge in a lower court against the Moundsville Power project in Marshall County, which is now being developed by Quantum Utility Generation, but has yet to break ground. 

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