During the last week of the session, West Virginia lawmakers are racing to pass tax breaks and loosen regulations on the ailing coal industry.
The legislative push comes even as coal production continues to decline.
For years, energy experts have warned that coal’s role in the U.S. energy mix is shrinking.
In West Virginia, the signs are already visible: coal production has steadily decreased, and hundreds of coal miners in southern West Virginia are bracing for layoffs as President Trump’s trade war hurts what is still one of the state’s largest exports.
But for staunch coal supporters like State Sen. Chris Rose, R-Monongalia, the measures to protect the industry are necessary.
“We would argue their industry is still needing some wins and needing some help, and it’s not so much a handout. They just want an even playing field,” he said.
A mandate for coal-fired power plants
Sen. Brian Helton, R-Fayette, sponsored a bill he said would help grow the coal industry by creating more jobs.
It requires utilities to prioritize using electricity produced by in-state coal plants instead of purchasing power from regional markets. It also requires plants to operate at a minimum capacity of 69%.
State regulators at the Public Service Commission attempted a similar policy in 2021, directing utilities to run coal plants at a much higher capacity.
But it was challenged in federal court, where a lawsuit claimed the move would directly hurt ratepayers who would absorb the higher costs to operate.
If the mandate is implemented again, it could again lead to higher costs for ratepayers.
Appalachian Power is one of the largest utilities in West Virginia. The company owns and operates three coal-fired power plants with operating capacities at a financial loss and well below the proposed threshold.
During a Senate committee discussion, PSC Chair Charlotte Lane told lawmakers she recognized that West Virginians are struggling with high utility bills.
She asked Helton about the impact on ratepayers for more power generation.
“If it costs more to run the coal-fired plants than buying off the market, do you want those plants to run and pass those costs to ratepayers?” she asked.
Helton didn’t answer. Instead, he explained that his focus was on long-term reliability with coal.
The committee sent the bill to the Senate floor, where it passed, after a lengthy debate.
Sen. Tom Takubo, R-Kanawha, was one of nine Republicans who voted against the bill. He said he was concerned the bill would hurt ratepayers who are already struggling with their power bills.
“Regardless of whether we need the energy or not, it’s going to run up rates on the electric bills,” he said. “The unintended consequences are too expensive for us.”
The bill is now in the House, where it will be taken up in the Energy and Public Works Committee.
Tax cuts for coal companies
The House of Delegates voted 92-1 to cut the state’s severance tax on metallurgical coal, which is used to fire blast furnaces in steel plants.
The bill will reduce the 5% tax per ton on coal by a half-percent a year until it hits 3.5%.
But the tax cut will cost the state $180 million over the next five years and will not do much to increase coal production, according to The West Virginia Center on Budget and Policy. Additionally, metallurgical coal already receives a tax break that totaled $86 million in 2022.
Del. Vernon Criss, R-Wood, is the chair of finance and the lead sponsor of the bill. He said the measure is supposed to be temporary to deal with market conditions.
During floor debate on the bill, lawmakers brought up some of those market conditions.
Del. Shawn Fluharty, D-Ohio, said President Donald Trump’s tariffs have caused China to retaliate by taxing West Virginia coal.
“There’s been a war on met coal and it’s from tariffs. That’s a fact,” Fluharty said.
Del. Mark Zatezalo, R-Hancock, said West Virginia can’t compete with Australia’s cheaper coal.
“The price of metallurgical coal is set by Australia. They control the market,” Zatezalo said. “It’s not about tariffs, it’s about competition and the competition comes from Australia.”
Initially, Criss’ bill proposed a temporary cut, but Del. Marty Gearheart, R-Mercer, added an amendment in House Finance that would make it permanent. Criss said he believes lawmakers can look at it again once the market rebounds.
“We’ll see the coal prices go back up, and we’ll be able to entertain looking at that again at some other point,” Criss said.
But Del. Adam Vance, R-Wyoming, is a coal miner. He said he’d vote for it to help his industry, but he didn’t think lowering the severance tax would do anything.
“Do I think this will get the jobs back? Probably not,” Vance said.
The severance tax reduction isn’t the only giveaway. Sen. Rupie Phillips, R-Logan, has a bill pending before House Finance that would give tax credits to coal companies that use equipment to clean up after a natural disaster.
Dismantling the Coalfield Development Office
Lawmakers are advancing legislation to reshape West Virginia’s energy policy as requested by Gov. Patrick Morrisey.
Their bill dismantles the Coalfield Development Office, which was created to help counties dominated by the coal industry diversify their economies and workforces.
The office would be closed and turned into a new program within the state’s Office of Energy, tasked with developing a comprehensive energy policy.
Lars Dalseide, communications director for Morrisey, said the program will continue to function the same as it does today, as both offices support energy development.
Nick Preservati, director of the Office of Energy, said the restructuring was for efficiency.
“A lot of the duties are the same as those of the Office of Energy, promoting the development of the coalfields,” he said. “It’s a lot of redundancy there.”
For years, state officials have talked about ways to help struggling southern coalfield counties jumpstart their economies, but haven’t provided funding or proposals to help.
The House passed the bill, with majority support except for three Republicans. It is now in the Senate, where it passed the Energy, Industry and Mining Committee.
Weakening mineral owners’ rights
The State Senate also weakened mineral and surface owners’ rights with a unanimous vote on crossover day.
Sen. Chris Rose, R-Monongalia, sponsored a bill to prohibit a part-owner of land from vetoing mining operations on the land if 75% of the other owners agreed to it.
The owners not in agreement — either because they’re against it or simply because they cannot be found — will still get paid or have their royalties kept in a trust.
The West Virginia Environmental Council warned the bill, called the “Coal Co-Tenancy Modernization and Miners Protection Act,” would lead to mining on land without the owner’s permission. The mines, particularly long wall mines, can crack house foundations, drain water wells and depreciate land values.
Rose said the concerns are unfounded.
“It does not just diminish surface owners’ rights whatsoever, does not diminish the federal and state laws we have for mine subsidence and landowner protections,” he said.
Rose said the change in ownership decision-making is important to keeping coal production flowing in the state.
“In a group of 10,000 people, you can’t allow one to shut down our coal mines. That’s too important to our state,” Rose said.
But Dave McMahon, attorney with the West Virginia Surface Owner’s Rights Organization, said everyday West Virginians are being left out of the conversation.
Under the legislation, if mining causes damage to property, the owners would only get reimbursed for the appraised value, not the cost to fix the actual damage caused by mining.
McMahon said, “It will cause subsidence under tracts that would not otherwise be mined, and when those people’s houses are destroyed, it won’t reimburse them with the replacement costs.”