CHARLESTON, W.Va. — Mon Power wants the state Public Service Commission to approve its plan to pay the owners of a downtown Morgantown waste coal power plant millions of dollars to terminate an electricity producing contract. If approved, the owners plan to switch the plant to natural gas.

The proposal, which is now part of a proposed settlement, was before the PSC for an evidentiary hearing Wednesday in Charleston.

Mon Power says it no longer needs the power generated by the Morgantown Energy Associates (MEA) plant located on Beechurst Avenue. The company said Wednesday it can save ratepayers $17 million a year by terminating a contract with the plant that is set to expire in 2027. It’s offered MEA a $60 million buyout.

MEA owners, Connecticut-based Starwood Enterprises, said it believes the buyout offer is “fair and equitable.” MEA Managing Director Jeffrey Delgado testified that if the PSC allows for the termination, the plant would stay open, with a reduction in staff, and continue to produce steam heat for the WVU campus. It would continue to use waste coal this winter and then switch to natural gas.

“We would meet WVU’s peak steam needs (this winter) and then transition to the existing gas boilers that are on site,” Delgado said.

He also testified MEA plans to install two more natural gas boilers next year to totally transition the plant away from waste coal.

West Virginia Coal Association President Bill Raney urged the PSC at the beginning of Wednesday’s hearing to reject the deal. Raney told MetroNews he doesn’t believe Mon Power and MEA have considered the full economic impact of making the switch.

“We believe there will be 60 jobs affected,” Raney said. “They are taxpaying people that live in Monongalia and Marion county. They want to stay there.”

MEA currently contracts with LP Minerals which provides the waste coal for the plant. Savage Trucking hauls the material from the former Humphrey mining operation to the plant and takes the ash product back to the old mining site. The ash is used in restoration efforts. The plant also uses limestone from Greer Limestone for its production which is trucked to the plant.

LP Minerals President James Laurita testified Wednesday the jobs lost through the contract termination would cost the economy $17 million a year, the same amount Mon Power says terminating the deal would save ratepayers. Laurita believes as many as 40 jobs could be cut at the plant.

“I’m saying $17 million, just those three vendors and the 40 employees, the value is $17 million a year that’s going to be lost just to the community of Morgantown,” Laurita said. “That’s $300 million over (the remainder of the contract). So there’s $300 million that’s lost to the community.”

Though asked several times, Delgado would not commit on how many jobs would be eliminated at the plant.

“We’re still reviewing that. There will be personnel affected by this transition but I do not have a specific number,” Delgado said.

He also failed to provide specifics on how much it would cost to add two additional natural gas boilers. Delgado also wouldn’t provide information on MEA’s steam deal with WVU, calling the information “confidential.”

Delgado said much of the $60 million from Mon Power would be used to pay off the plant’s debt along with “making capital investments into the facility.” He said it would be cost prohibitive to continue operating the plant with coal waste without the Mon Power contract.

“If we would continue to operate we would lose money at current energy and capacity rates with the electric portion of the plant,” he said.

Raney believes MEA’s parent company, Connecticut-based Starwood Energy Group, is being pressured to get out of the coal business. Raney said it’s time for West Virginia to take a stand.

“The country can’t do without coal. So the last thing we need to be doing is shutting down another one of our coal-fired plants just so we can send a check to Connecticut,” Raney said.

Delgado said MEA is changing the plant but it’s not going anywhere.

“We’re going to be a member of the Morgantown business community. We will still be employing personnel at the facility. We will also be paying various vendors to maintain the plant, the boilers that will be in place, the steam system,” he said.

MEA has already signed a contract with Dominion Energy to provide the additional natural gas for the plant. It is also talking with a vendor to provide diesel fuel as a back up energy source.

It’s anticipated the PSC will make a decision on the proposed settlement soon. Mon Power wants the contract to end on Dec. 31. Raney said he’s confident commission will take a serious look at the case.

“There’s three things they look at; the ratepayer, the utility and it’s balancing that against the overall impact on the state’s economy and I think they are very conscientious about that,” he said.

The MEA plant has been operating along the banks of the Monongahela River between WVU’s downtown and Evansdale campuses for 30 years. The plant was created under the Public Utility Regulatory Policies Act (PURPA). The 1978 act “was meant to promote energy conservation (reduce demand) and promote greater use of domestic energy and renewable energy (increase supply).”