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Maloney writes Tomblin on energy

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With the final weeks of the campaign season closing in, Republican gubernatorial candidate Bill Maloney is pushing energy issues back to the front in West Virginia.

In an open letter to Gov. Earl Ray Tomblin, Maloney promises to repeal a former Gov. Joe Manchin initiative to encourage development of alternative and renewable energy sources in West Virginia. The campaign followed up with similar criticisms Oct. 18.

Maloney said the bill hurts West Virginia's coal and natural gas industry.

"As governor, I will support the use of our own West Virginia natural resources like coal and natural gas to grow jobs again," Maloney said in a news release accompanying the letter. "We need to promote our own energy sources to ensure low-cost power that encourages new jobs in West Virginia. Instead of begging for subsidies for alternative energy sources like wind, I will fight for coal and natural gas and the West Virginians that work to power America."

Tomblin's campaign stood firmly against criticism of the bill, reiterating its support of the coal industry.

"Bill Maloney either continues to show a staggering lack of understanding of issues, or he's just lying," said Chris Stadelman, a Tomblin representative. "The Energy Portfolio bill was supported by the West Virginia Coal Association and does not inhibit our state's ability to mine coal or use coal in the production of power. The Longview power plant right in Morgantown qualifies under the Energy Portfolio bill and is a great example of how West Virginia can continue to provide clean, low-cost power to our residents. Governor Tomblin always has supported our coal and natural gas industries, and he always will."

The West Virginia Coal Association confirmed in earlier questions from The State Journal the bill does not threaten the industry. A spokeswoman from AEP said the bill did not affect their generation plans either.

The Public Service Commission completed a report on the impacts of the bill, finding "minimal" effect on the coal industry. Looking at 2015 requirements, the first year with interim requirements under the Act, no new generation is needed to meet the plan.

"In 2015, eligible electric generation sources identified in the Portfolio Act will be responsible for 10 percent of the utility's retail sales," the assessment states. "Assuming the aforementioned ratios remain constant, the 10 percent portfolio standard requirement in 2015 should only impact 4 percent of the electricity generated and approximately 0.5 percent of the coal produced in West Virginia. Inversely, 96 percent of the electricity generated and 99.5 percent of the coal produced in West Virginia will not be subject to the Portfolio Act's 2015 standards."

The GOP has criticized the bill, claiming it would raise rates, though Jeff Herholdt, director of the Department of Energy has said the PSC would not allow sources that meet the act to be used unless they were economically feasible.

The bulk of Maloney's letter focuses on an attack of the Alternative and Renewable Energy Portfolio Act. The bill has been called the "West Virginia cap and trade bill," by the WVGOP, though it differs in structure from the federal bill.

Kent Sholars, a Maloney spokesman, said both the West Virginia bill and the failed cap and trade bill sought to restrict fossil fuel sources.  

"At the end of the day, this bill requires 25 percent of our electricity generation here in the state, all of the retail customers, 25 percent of that is going to have come from alternative sources," Sholars said in a phone interview regarding the bill. "There's no way to argue that doesn't hurt coal and natural gas, the sources of most of our electricity here in West Virginia at this point. To say otherwise is just not accurate."

An important note, and one of the likely reasons the energy industry has not made a big show of fighting House Bill 103, is what it does not affect. West Virginia coal used for export, power generation outside of the state and metallurgical coal are unaffected by the bill. Natural gas drillers are not restricted in any way from selling gas to buyers outside of the state — where most of it now goes anyway.

The bill caps how much natural gas generation can be used to qualify for alternative credits, but at current capacity, gas generation is not near that cap.

Natural gas currently provides about 1 percent of the electricity generated in West Virginia. Hydroelectricity sources currently generate more West Virginia power than natural gas.

While there has been a boom in natural gas production, much of that gas is not used for electricity generation within the state.

Sholars pointed toward lobbyists when asked to explain why coal industry representatives had defended the bill.

"We would say that clearly the coal lobbyists and the unions are supporting Earl Ray Tomblin, while the coal miner is supporting Bill Maloney," Kent Sholars said. "When you call their lobbyists, you're going to get their lobbyists' response. Their lobbyist response is going to be what helps the lobbyists the most. It's just to get Earl Ray Tomblin elected."

The policy, Sholars said, affects more than just the environment and the coal industry.

"Businesses don't want to come here because of Earl Ray Tomblin's policies, specifically, the cap-and-trade bill, which causes the price of electricity generation to go up, which discourages jobs creation," Sholars said.

According to the EIA, West Virginia's industrial electricity prices are about 11 percent lower than the U.S. average, and more than 18 percent lower for residential and commercial electricity. The state's average retail electricity prices in July were lower than all but seven states, including neighboring Kentucky.

Maloney also goes after Tomblin's support of the wind energy industry. Wind has made some steady gains in West Virginia, but still maintains a very modest footprint and is dwarfed by coal generation.

"Earl Ray Tomblin signed a letter from an organization whose stated purpose is to decrease the use of our traditional sources of energy like natural gas by 50 percent," Maloney wrote in a follow-up statement. "While Earl Ray writes letters to Washington bureaucrats pleading with them to stop their job-killing policies, he's also sending letters to Washington politicians asking them for taxpayer subsides for alternative sources. Coal and natural gas create thousands of jobs in West Virginia.  As governor, I will stand up for West Virginia-based energy and West Virginia jobs."