The power plant that buys coal from Sen. Joe Manchin’s family business won’t have a second life powering cryptocurrency mining.
The Public Service Commission of West Virginia rejected a proposal late last week by the owners of the Grant Town power plant to buy out of a power purchase contract with a subsidiary of utility giant FirstEnergy.
E&E News first reported on the cryptocurrency plan in November (Climatewire, Nov. 17, 2021). The plan to convert the plant to a source of power for energy-intensive cryptocurrency mining carried the risk of permanent closure, FirstEnergy claimed in PSC filings.
If the plant closes, it would affect Manchin’s personal finances. A company Manchin founded in 1988, now called Enersystems, has sold Grant Town the bulk of its coal for decades. Manchin earned $500,000 from Enersystems in 2020, according to Senate disclosure records.
Manchin says Enersystems is in a blind trust and is controlled by his son, Joseph Manchin IV.
In 2020, almost all of the coal burned by Grant Town came from Enersystems, according to the most recent filings from the U.S. Energy Information Administration.
The tiny 80-megawatt plant has struggled financially for years, costing FirstEnergy customers more than $100 million in higher rates over the last few years alone.
The plant’s owner, American Bituminous Power Partners, was seeking a $200 million buyout of its power contract with FirstEnergy so that it could convert the plant into a cryptocurrency mining operation. It was also seeking to sell its coal ash for use as a cement substitute in concrete. Coal ash is the toxic material that’s left when waste coal is burned.
Under the rejected proposal, the plant’s electricity would have been used to power high-speed computers for online cryptocurrency mining — the energy-intensive practice of competing for newly minted virtual coins.
The plant is the only facility left in West Virginia that burns waste coal, which is coal mixed with clay, slate and mud left over from defunct mining operations. For decades, the plant has largely relied on waste coal trucked to the site from the Manchin family business.
Over the years, Grant Town has received favorable treatment from the West Virginia PSC. In 2006, when Manchin was governor, the commission approved a rate increase and a longer power contract for the plant.
Since his election to the Senate in 2010, Manchin has earned more than $5 million from Enersystems, and his stake in the company is worth up to another $5 million, according to Senate disclosure records.
Manchin and American Bituminous Partners did not respond to requests for comment. FirstEnergy declined to comment.
Leading up to the PSC decision late last week, FirstEnergy balked at the proposal to buy out its power contract with the plant’s owner. A buyout might result in the plant’s closure, the utility argued.
After months of deliberation, the Public Service Commission agreed that the $200 million buyout proposed by American Bituminous Partners was too high. The PSC, which has a history of helping coal-fired power plants, also noted that FirstEnergy would need to replace the lost capacity if Grant Town closed.
“Any buyout likely will require a significant up front cost that the Companies will expect existing customers to pay,” the Public Service Commission wrote in its decision. “Even if there is a net present value benefit of a buyout, in the form of no purchased power costs from Grant Town in the future, the net impact is highly speculative and dependent on the availability and prices of replacement capacity and energy.”
The PSC acknowledged that the decision may further increase rates, but stated that they are a negligible cost compared to the lost coal jobs that might result from the plant’s closure.
“The environmental and financial benefits accruing to the State’s economy from the Grant Town facility are benefits that must be considered as offsets to some relatively small increased purchased power costs to current and future ratepayers,” the PSC noted.