PSC approves renewable energy projects for AEP's WV utilities

The PSC approved the wind project and seven solar projects totaling nearly 350 megawatts in Ohio and Virginia in an order Friday that supported accommodating the needs of customers that have shown interest in receiving power from renewable sources, with Nucor chief among them. Nucor plans to build and operate a roughly $3 billion arc furnace sheet steel mill in Mason County.

Appalachian Power and Wheeling Power have said the projects will provide West Virginia customer benefits that exceed estimated costs by $44.5 million.

The renewable facilities have different projected in-service dates, but the companies estimate that rates would climb by roughly $3.7 million for all customers under their proposal during a hypothetical first year that assumes all eight facilities are in service. A residential customer using 1,000 kilowatt-hours per month would experience a net monthly hike of 29 cents.

Appalachian Power and Wheeling Power witnesses said at a September evidentiary hearing the companies’ proposal would attract and retain industrial customers and lower the companies’ exposure to volatile fuel costs. The PSC approved an $88.8 million rate hike in September for the American Electric Power-controlled utilities to cover fuel costs.

PSC goes against staff in Grover Hill ruling

The largest project approved by the PSC in its Friday order is a planned 142.6-megawatt wind facility expected to be built by a third party in Paulding County, Ohio. The PSC approved a purchase and sale agreement for the site. Appalachian Power and Wheeling Power have said the project is being developed by Lotus Infrastructure Partners and is expected to begin service in the third quarter of 2025.

In its order, the PSC cited company testimony that Nucor needs 20% of its usage to consist of renewable energy for it to operate in West Virginia. The PSC said additional testimony that the utilities have customers other than Nucor waitlisted for the program led it to conclude the Ohio wind facility, called Grover Hill, should be approved.

Lloyd Stemple, CEO of Constellium Rolled Products Ravenswood LLC, a Ravenwood rolled products facility within the corporate umbrella of global aluminum producer and recycler Constellium, submitted a letter to the PSC in September supporting the utilities’ renewable energy proposal.

Terry Eads, an independent contractor providing consulting services to the PSC’s Utilities Division, testified the agency should deny cost recovery approval for the Grover Hill wind project and approve cost recovery for the seven solar projects in the proposal. Eads told the PSC he recommended denial of Grover Hill wind project cost recovery mainly because he found it that would have a negative net present value of $15.6 million over its lifetime. Net present value measures how much an investment is worth during its lifespan.

Virginia ratepayers will share in the cost and benefits of the projects in conjunction with the Virginia Clean Economy Act. The law established the state’s mandatory renewable portfolio standard program requiring Appalachian Power to deliver electricity from 100% renewable sources by 2050.

In 2015, West Virginia repealed its renewable portfolio standard, becoming the first state to do so. West Virginia had established the standard in 2009.

The Virginia State Corporation Commission approved the utilities’ eight proposed energy projects last week.

Virginia’s jurisdiction applies when its ratepayers are asked to pay their portion of operation, maintenance and electric output costs of facilities to serve customers.

Solar projects approved

The renewable energy projects other than the Grover Hill wind project are to be supported by purchased power agreements through which Appalachian Power will buy renewable energy products from the facilities. The utilities will recover costs of purchased power through annual fuel cost recovery proceedings. The solar projects approved are:

• the 19-megawatt Shifting Sands project in Henry County, Virginia, pegged to start service in May 2024 under a 20-year purchased power agreement with developer Energix
• the 20-megawatt Sunny Rock project in Henry County, Virginia, scheduled to start service in July 2024 under a 20-year agreement with Energix
• the 20-megawatt River Trail project in Carroll County, Virginia, that was slated to begin service in Aug. 2024 under a 20-year agreement with Energix
• the 20-megawatt Mountain Brook project in Franklin County, Virginia, slated to begin service in Aug. 2024 and governed by a 20-year agreement with Energix
• the 5-megawatt Green Acres project in Henry County, Virginia, scheduled to start service in Dec. 2024 and be governed by a 30-year agreement with developer Madison Solar
• the 20-megawatt Horsepen project in Louisa County, Virginia, slated to begin service in Dec. 2025 and governed by a 30-year agreement with developer Clenera
• the 100-megawatt Pleasant Prairie project in Franklin County, Ohio, scheduled to start service in March 2026 under a 20-year agreement with developer Invenergy

PSC Commission member and former longtime West Virginia Coal Association President Bill Raney asked during the case’s evidentiary hearing why the companies couldn’t get renewable projects in West Virginia.

Randall Short, Appalachian Power director of West Virginia regulatory services, said the company hasn’t received favorable responses from developers to requests for proposals that would result in West Virginia-based projects.

In January, Appalachian Power, Wheeling Power and renewable utility-scale energy project developer D.E. Shaw Renewable Investments (DESRI) terminated the purchase and sales agreement supporting what was planned to be a 50-megawatt solar facility in Berkeley County.

Moye said the developer lost access to some of the leased land on which the development was planned, which would have reduced the facility’s generating capacity by 30%, from 50 megawatts to 35 megawatts.

West Virginia’s clip of coal-fired generation, 91%, is easily the highest in the country.

American Electric Power has set a goal of achieving net carbon dioxide emissions by 2045, with an interim goal of cutting emissions 80% from 2005 levels by 2030.