W.Va. Public Service Commission releases proposed rules for power plant capacity
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CHARLESTON - Reaction to new proposed rules by utility regulators in West Virginia required by the state's data center law that would determine how coal-fired power plants operate received both praise and criticism.
The West Virginia Public Service Commission issued an order Thursday approved modified legislative rules governing capacity requirements and consumer economic dispatch for coal-fired power plants in the state.
Among other things, the rule expects electric utility companies in West Virginia - Columbus-based American Electric Power (Appalachian Power and Wheeling Power) and Akron-based FirstEnergy (Mon Power and Potomac Edison) - to maintain its coal-fired power units and schedule maintenance on its units to limit the amount of downtime.
A key provision includes requiring coal-fired power plants to achieve a minimum net capacity factor of 69% based on a 12-month rolling average beginning each January, but only if doing so does not require increases in electric rates for residential or industrial customers.
The proposed rule also including reporting requirements for management of coal supplies and contracts, quarterly dispatch reports detailing how utility companies are improving the efficiency and reducing costs at coal-fired power plants so that PJM Interconnection, the 13-state regional transmission consortium that West Virginia is a part of, will use more coal-fired power to meet electrical demand.
The proposed rules, which will now go before the Legislative Rule-Making Review Committee, are required by House Bill 2014, the Power Generation and Consumption Act, introduced on behalf of Gov. Patrick Morrisey and passed by the Legislature in 2025. HB 2014 deals primarily with the creation of data center districts and the rules for microgrids that some data center projects could be powered by.
The PSC held a public comment hearing at the end of September for its proposed HB 2014 rules, as well as solicited public comments from multiple groups. The PSC's order stated that their proposed rule was based in part of joint proposed amendments offered by Appalachian Power/Wheeling Power and Mon Power/Potomac Edison. These amendments aligned the rule text directly with statutory language, resolved jurisdictional concerns with PJM and the Federal Energy Regulatory Commission (FERC), and streamlined reporting obligations.
"Based upon all of the above, the Commission determines that the Joint Proposed Amendments as filed by (the electric utilities) resolve the most substantive objections raised by the power companies, and at the same time resolve most of the substantive comments made by other parties," the PSC stated in its order.
"Appalachian Power appreciates the Public Service Commission's consideration of the company's comments," said a spokesperson for AEP. "We support maximizing generation from our West Virginia power plants when doing so benefits customers and helps keep their energy costs as low as possible ... We will continue evaluating the approved language and any potential effects as the rules move through the legislative rulemaking process."
"Mon Power and Potomac Edison are supportive of the PSC rules concerning HB 2014," said Dan Rossero, vice president of West Virginia Generation for FirstEnergy.
The PSC issued an order several years ago that set an expectation that coal-fired power plants need to achieve at least a 69% capacity factor in order for in-state electric companies to self-generate power and reduce reliance on purchased power, though that capacity factor was never mandated.
Some Republican members of the state Senate attempted during the most recent legislative session to make this a mandate, though the GOP-led House of Delegates rejected these efforts. Both the West Virginia Coal Association (WVCA) and the United Mine Workers of America (UMWA) expressed support during the crafting of these rules for a mandatory 69% capacity factor requirement, though the PSC said HB 2014 never required a hard mandate.
"Both the WVCA and the UMWA argued that the Proposed Rules do not, in essence, go far enough to maximize the use of West Virginia coal resources for electric generating utilities," the PSC wrote in its order.
"The Commission never proposed requiring any specific actions by the utilities that would disregard or violate the statutory requirement that utility actions must be designed to protect ratepayers against higher than necessary rates ... neither the original proposed rules nor the revised final proposed rules require, imply favor for, induce, or reward utility actions designed solely to increase utilization of the power plants that may cause higher customer rates."
A request for comment from the UMWA went unreturned as of Monday afternoon. WVPA President Chris Hamilton said the PSC's proposed rules run counter to previous orders supporting a 69% capacity factor.
"We're very disappointed in the PSC's decision to modify 'their' proposed rule which was intended to ensure adequate oversight of the operation of instate electric generating plants which is critical to ensure optimum performance and the lowest cost possible for consumers," Hamilton said.
The proposed rules were applauded by groups representing consumers, who were concerned that mandating a 69% capacity factor could force ratepayers to bear the burden of the costs of generating coal-fired power when not needed by the PJM regional grid.
“West Virginians are already struggling with some of the highest electricity burdens in the country, and they cannot afford policies that put additional costs on their monthly bills,” said Caity Coyne, coalition manager for West Virginians for Energy Freedom. “We appreciate that the Commission listened to the concerns raised by residents and organizations across the state."
"While we expect to have suggestions for the Legislature as it reviews these rules, from a ratepayer perspective, the final rules are much improved from the initial draft," said Emmett Pepper, policy director for Energy Efficient West Virginia. "Nearly all parties raised similar ratepayer impact concerns and this draft addresses many of those concerns."
The Gas and Oil Association of West Virginia (GO-WV) also praised the PSC proposed rules as reasonable, even though the PSC rejected proposed amendments offered by GO-WV to recognize the importance of natural gas along with coal for electric generation.
"GO-WV appreciates the revisions clarifying that utilities are not required to operate at a 69% capacity factor when doing so would increase customer charges," said GO-WV President Rebecca McPhail. "The change addresses an affordability concern raised by us and other West Virginians as rising costs are impacting us all."
PJM dispatches the power it needs on the regional grid from the least costly sources, often beginning with nuclear, then natural gas, and then coal. According to a 2025 analysis by financial firm Lazard, coal-fired power costs consumers $122 per megawatt hour compared to $78 per megawatt power or natural gas.
"Our primary focus remains providing the fuel to deliver reliable electricity for the lowest cost to customers. That means allowing the free market, not government mandates, to drive fuel choice. The revised proposal makes progress on that front. We will continue to monitor this issue through the legislative process."
If the Legislative Rule-Making Review Committee approves of the final draft rule, the rule will be voted on in a rule bundle early next year during the 2027 legislative session.
"As these rules move to the Legislature, we urge lawmakers to put ratepayers first," Coyne said. "Every decision about how we generate electricity should begin with a simple question: Will this help keep electricity affordable for West Virginia families?”