Cryptocurrency plan fails for Manchin-connected coal plant

The power plant that buys coal from Senator Joe Manchin’s family business will not have a second life driving cryptocurrency mining.

The West Virginia Public Utilities Commission rejected a proposal late last week from the owners of the Grant Town power plant to purchase a power purchase contract with a subsidiary of utility giant FirstEnergy.

E&E News first reported on the cryptocurrency scheme in November (Climatewire, November 17, 2021). The plan to turn the plant into a power source for energy-intensive cryptocurrency mining carried the risk of a permanent shutdown, FirstEnergy claimed in PSC filings.

If the plant closes, it would affect Manchin’s personal finances. A company founded by Manchin in 1988, now called Enersystems, has sold most of its coal to Grant Town for decades. Manchin earned $ 500,000 from Enersystems in 2020, according to Senate disclosure records.

Manchin says that Enersystems is in a blind trust and is controlled by his son, Joseph Manchin IV.

In 2020, nearly 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 small 80-megawatt plant has struggled financially for years, costing FirstEnergy customers more than $ 100 million in higher rates in the past few years alone.

The plant’s owner, American Bituminous Power Partners, was seeking a $ 200 million purchase of its energy contract with FirstEnergy in order to convert the plant into a cryptocurrency mining operation. He was also trying to sell his coal ash for use as a substitute for cement in concrete. Coal ash is the toxic material that remains when residual 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-consuming practice of competing for freshly minted virtual currencies.

The plant is the only remaining facility in West Virginia that burns residual coal, which is coal mixed with clay, shale and sludge left over from defunct mining operations. For decades, the plant has relied heavily 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.

Before PSC’s decision late last week, FirstEnergy opposed the proposal to buy its power contract with the plant owner. A purchase could result in the plant’s closure, the utility company argued.

After months of deliberation, the Public Service Commission agreed that the $ 200 million purchase 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 lost capacity if Grant Town were to close.

“Any purchase will likely require a significant upfront 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 from a purchase, in the form of non-purchased energy costs from Grant Town going forward, the net impact is highly speculative and depends on the availability and prices of replacement capacity and the Energy”.

The PSC acknowledged that the decision may further increase rates, but said they are a negligible cost compared to the lost coal jobs that could result from the plant’s closure.

“The environmental and financial benefits accruing to the state economy from the Grant Town facility are benefits that should be viewed as offsets for some relatively small purchased energy costs to current and future taxpayers,” the PSC noted.

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