Residents in West Virginia are likely to be saddled with $36 million in losses due to "poor coal economics," the Institute for Energy Economics and Financial Analysis (IEEFA) warned, and an expert analyst suggested coal plants don't intend to change this practice.
What's happening?
As Americans in many states reeled from shockingly high utility bills, IEEFA published a report quantifying the economic impact of coal company losses on consumers in West Virginia.
West Virginia rate payers who receive service from Appalachian Power and Wheeling Power, subsidiaries of American Electric Power, will pay tens of millions of dollars to subsidize coal losses, according to the Institute.
Sustained "economic losses" at three plants, where coal burning equipment is between 45 and 54 years old, are the cause of multi-million dollar costs being passed on to West Virginians.
IEEFA indicated that this was "the second consecutive year that AEP has found itself in the situation of having contracted for significantly more coal than needed to operate the plants economically."
As a result, the facilities continued burning coal "at times when it did not make economic sense," ostensibly to avoid exceeding physical storage limits for coal. In an 11-month period between March 2024 and February 2025, the coal plants racked up an estimated $66 million in losses.
Those losses represented the "difference between the revenue earned from selling electricity into the regional market and the cost of operating the units" amid insufficient demand.
"In part, this reflects the ongoing poor economics of coal plants," IEEFA observed, noting that the economics of coal plants have long followed an extremely predictable pattern.
Why is this a problem?
IEEFA has repeatedly addressed a "longstanding trend" making coal not only a major contributor to an overheating planet, but also an economically weak source of energy.
Coal plants around the world are aging, and over time, the facilities become less reliable and prone to equipment failures.
TCD Picks » Upway Spotlight
💡Upway makes it easy to find discounts of up to 60% on premium e-bike brands
|
Do you worry about the quality of the air inside your home?
Click your choice to see results and speak your mind. |
Yes — often 😬 At the same time, excess coal inventories have been an ongoing factor in the broader energy market, and Americans are facing catastrophic increases in energy costs. Recent estimates indicated by the end of 2025, Americans would pay an extra $38 billion for utility bills.
IEEFA Energy Consultant Catherine Kunkel testified about these losses in July, and explained "Must Run" contract provisions guaranteed the continued burning of excess coal at rate payers' expense.
Kunkel added that the companies planned to commit to "additional large amounts of coal for 2026," virtually guaranteeing further unnecessary costs are passed on to consumers facing separate price hikes on necessities like food and housing.
"This [commitment for 2026] is concerning given that the Companies have already incurred more than $150 million of operating losses over a two-year period from such uneconomic operation of their coal units," Kunkel testified.
What can be done about it?
IEEFA maintains investing in clean energy sources is the only viable economic path forward.
As energy costs surge, contacting lawmakers ensures representatives remain focused on out-of-control utility bills.
From a consumer standpoint, installing solar panels is one way to avoid energy market fluctuations.
Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Cool Picks
