On August 20, 2024, Sierra Club and two Appalachian Power customers jointly filed a lawsuit in the Southern District of West Virginia against the West Virginia Public Service Commission (PSC) for their 2021 directive to utility company, Appalachian Power, to run their coal plants at a 69% capacity factor (how consistently a power plant operates at its maximum potential)–higher than the regional average capacity factor of 42% implemented over the last decade. Sierra Club’s lawsuit argues that this directive interferes with the jurisdiction of the Federal Energy Regulatory Commission’s (FERC) by undermining laws and safeguards that protect the public from unjust rate increases and higher electricity bills across the region.
In the past 7 years, Appalachian Power has never hit this 69% capacity factor, because it would be uneconomic to do so. This new directive forces their coal plants to bid and clear in a wholesale energy market (even if it means operating uneconomically), an area that is exclusively within FERC’s jurisdiction. If it made economic sense for these coal plants to run as much as the PSC’s directive required, they would have been doing so already. Instead, Appalachian Power now has to pay more to keep their coal plants open, locking in costly long-term coal contracts and spending hundreds of millions to try to comply with public health and environmental regulations when more affordable and cleaner energy solutions are available. Appalachian Power doesn’t internalize these costs, instead it passes them onto ratepayers whose bills are up 20% since the directive was implemented.
The people of West Virginia are picking up the tab for this polluting energy directive that harms residents’ quality of life and stymies a just and clean energy transition. Under this regulation, West Virginians will continue to face more air and water pollution leading to health impacts, like cancer and asthma. Moreover, West Virginia families and businesses can’t afford these ongoing rate hikes–nearly 30% of households in West Virginia said they’ve had to forgo essential expenses for at least one month to pay their energy bills. Through legal action, Sierra Club hopes to throw out the PSC’s directive and ensure that the public is protected from unreasonable rate hikes that subsidize uneconomic coal plants.
Sierra Club is represented in this lawsuit by Appalachian Mountain Advocates. Sierra Club Environmental Law Program Attorneys Casey Roberts, Dori Jaffe, and Megan Wachspress were instrumental in developing the lawsuit.