WV Coal Member Meeting 2024 1240x200 1 1

OP ED: West Virginia relies heavily on coal based electric generation

By: Chris Hamilton, President & CEO WV Coal Association

West Virginia historically has enjoyed among the lowest cost electric rates in the country, a trend which continues today despite universal higher energy costs.

The fact that West Virginia relies heavily on coal based electric generation is the primary reason West Virginians have a lower base rate than the majority of Americans.

Generation from existing coal assets in West Virginia can be as much as 50% less expensive than buying power in the wholesale electricity market or the power produced by generating sources other than coal.

For example, generation costs from our state’s existing coal fired power plants is over $9 cheaper per kilowatt hour than power purchases from the wholesale PJM energy market, $12 less expensive than natural gas-powered generation, $14 cheaper than solar sources and a full $42 less expensive than wind generation.  

The cost of coal generation has also been remarkably stable as domestic fuel costs have skyrocketed in response to a global energy crisis.  Since January 2021, the average cost of natural gas to produce electricity has increased just shy of 150%, with costs per MMBtu climbing almost $5 since January 2021.  In contrast, the average cost of coal delivered to U.S. utilities has increased only 10%, or about 22 cents per MMBtu. 

Rapidly increasing natural gas prices have fueled a corresponding dramatic increase in electric rates around the country.  Since January 2021, average U.S. electric rates have gone up almost 25%.  The same is true in the nation’s largest electric grid management system, PJM, where prices have increased 27 percent.

Thanks to its coal industry and dependence on coal fired electricity, West Virginia’s electric customers have been protected from these price shocks.  Prices have gone up in the Mountain State as well, but only by about 14 percent and electricity in West Virginia is almost $3 cheaper than the average national power cost and those of our surrounding states and the PJM grid operator.

In addition to its low cost, coal-fire electricity offers superior advantages over other forms of base fuel for electric generation in terms of reliability, grid integrity and overall security.

Coal had been our fuel of choice since West Virginia first became a state and it has powered us through two world wars, the industrial age and is responsible for the electrification of America and our extraordinary quality of life.