West Virginia faces a challenging future. Given the resource acquisition decisions that have been made during “the lost decade” by the two utilities operating in the state – and with the approval (unwisely) of the Public Service Commission (PSC) – the state’s electricity supply is still 88 percent coal-fired as of 2020, and electricity rates will likely continue to increase because of the failure to diversify into cleaner, more economical ways of generating electricity. The job creators – large employers thinking about locating or expanding their operations – are not attracted to a state where access to renewable energy is difficult and the prospect of continuing price increases is certain. Energy supplies that are both high-cost and carbon-intensive put the state at an extreme competitive disadvantage compared to surrounding states that have adopted progressive energy polices and fully embraced the benefits of low-cost renewables.

In November 2008, when Barack Obama was elected as President of the United States, the focus of environmental policies turned to climate change and the reduction of greenhouse gases (GHGs), the heat-trapping pollutants that are produced by the burning of fossil fuels. Given coal’s prominence as the source of nearly 80 percent of the GHGs in the electricity industry at the time, the focus on achieving GHG reductions necessarily had implications for the coal industry. Moreover, it was clear from some of the early initiatives at Obama’s Environmental Protection Agency (EPA) that the administration had some hostility toward mountaintop removal in particular as a means of extracting coal. Other actions by the EPA had impacts on West Virginia – adoption of the Mercury and Air Toxics Standard (MATS) in late 2011, for example, resulted in the closure of several coal plants, as utilities determined that the cost of compliance was too great to justify additional investment in emission reduction measures.

Between 1996 – the first year that Joe Manchin ran for statewide office in West Virginia – and 2020, West Virginia changed from a reliably “blue” state, with Democratic registrations outnumbering Republican by 2 to 1, to a state captured by the Republican nominee in every presidential election beginning in 2000, capped by Donald Trump’s 42- and 39-point margins in 2016 and 2020, respectively. As noted by Politico, “few spots in America have shifted politically faster and more decisively than this state, swinging from nearly entirely blue to almost totally red over the last 20 years.”1 In February 2021, party registrations in West Virginia actually edged in favor of Republicans for the first time.

Throughout “the lost decade,” two trends dominated the landscape of the electric utility industry in the United States: decarbonization, or a dramatic reduction in the “carbon footprint” of the typical electric utility, and decentralization, the movement away from the historic, large, centralized generating station model toward greater reliance on smaller, dispersed generating resources – rooftop solar, for example – throughout a utility’s service territory. For the most part, these trends were driven by economics or market forces rather than specific government policies.

With respect to decarbonization, as discussed in Chapter 2, the displacement of coal-fired generation with natural gas-fired combustion turbines throughout “the lost decade” – largely as a result of cheap, plentiful “fracked” gas and improvements in combined-cycle combustion turbine technology – produced significant reductions in greenhouse gas (GHG) emissions from the electric utility industry. Natural gas is twice as clean as coal in terms of carbon emissions when combusted to generate electricity.

When coal prices rose in 2009–10 due to increased demand for coal exports – primarily as a result of the industrialization of developing nations (China and India in particular) – the response in the coal industry was a series of consolidations and acquisitions by coal companies at staggering prices. These transactions were highly leveraged (i.e., largely funded through heavy use of debt), which put the coal companies in a precarious position financially once coal prices resumed their inevitable decline as US electric utilities reduced their use of coal, and exports decreased as the world began to consider the climate change impacts of continuing to burn coal. As a result, several large coal companies went bankrupt and, since 2012, more than sixty mine operators have filed for bankruptcy.

While the impact of the shale gas revolution was the biggest driver of the decline of the coal industry in West Virginia, the increasing cost competitiveness of renewable generating sources – primarily solar photovoltaic (PV) and wind – also played a role, albeit a much smaller one, in West Virginia than on the national stage. The April 2017 study by the Columbia Center on Global Energy Policy1 found that growth in renewable energy across the United States was responsible for about 18 percent of the decline in domestic coal production between 2011 and 2017, a distant third to the role of natural gas (49 percent) and lower than expected demand for electricity (26 percent).

Beginning in 2007, shale gas development began to expand in a big way in West Virginia, due to advancements in hydraulic fracturing and horizontal drilling. As it turned out, parts of West Virginia are located atop what is now the nation’s largest shale gas play, the Marcellus. Shale gas development has often been referred to as a “game changer” in the domestic energy industry, particularly as making natural gas the fuel of choice for generating electricity at baseload power plants (i.e., generating plants that are the cheapest and generally run around the clock). Within six years, natural gas would surpass coal as the leading source of fuel for electricity generation, due to its lower cost and the high efficiency of new natural gas fired combined cycle combustion turbines, especially compared with the economics of the region’s aging fleet of coal plants, many of which were over forty years old.

No politician dominates “the lost decade” in West Virginia more than Joe Manchin III, who, at the time of writing, is currently serving his second term in the US Senate. With the Democrats taking control of the Senate in January 2021, Manchin is now chairman of the Senate Energy and Natural Resources Committee, through which all energy-related legislation must pass, and thus has ascended to become the point person on energy and climate legislation.1 Moreover, as the most conservative Democrat in the Senate, Manchin has outsized influence on the scope of virtually all elements of President Biden’s spending agenda under the current Senate rules shaped by his predecessor, Robert C. Byrd.

Manchin has held office at the state and federal level almost continuously since 1982, when he was elected to the West Virginia House of Delegates at the age of thirty-five. After two terms in the House, he served ten years in the state Senate.

This book examines the impact of developments in the energy industry, and the associated political dynamics, in Central Appalachia – primarily West Virginia – over the ten years from 2009 to 2019, a period I refer to as “the lost decade.” At the outset, it is worth answering the questions that are raised by the scope of this book: Why the energy industry? Why West Virginia? Why the years 2009 to 2019? And what does the “coal trap” mean? This introduction answers those questions, and provides a preview of what I will cover in the remainder of the book.

West Virginia’s legislature has done more than its share in contributing to the failed energy policies during “the lost decade.” This chapter explores several measures considered during this period that illustrate the collective mindset of lawmakers on energy issues. First, in 2009 West Virginia adopted a worthless “alternative and renewable energy portfolio standard” that deceptively suggested by its title that it was promoting renewable energy when, in fact, it did nothing to encourage renewable energy resources. Instead, it sanctioned many forms of fossil fuel-fired generation as “alternative energy” and therefore failed to produce any incentives to promote the development of renewable energy resources in the state.

Two energy policies in particular contributed to the disastrous results for ratepayers that became apparent at the end of “the lost decade.” First, there was the failure of energy utilities during most of that period to engage in long-term planning known as “least cost planning” or “integrated resource planning.” Integrated resource planning is a rigorous process that examines the full range of options – including both supply-side (generating resources) and demand-side (energy efficiency and conservation) – available to a utility to meet its resource needs at the lowest reasonable cost to its customers. Had integrated resource planning been in place prior to the “lost decade,” the risk associated with nearly exclusive reliance on coal-fired generation would have been apparent, and the massive rate increases that followed when coal prices soared could have been avoided. Moreover, the opportunity to diversify into natural gas-fired generation as the shale gas revolution was unfolding could have been thoroughly explored.

Throughout “the lost decade,” West Virginia’s Congressional delegation largely joined in the “war on coal” rhetoric, and the narrative was one that both parties could enthusiastically join. Whether Republican or Democrat, the problem was the Obama administration’s “job-killing EPA.” Legislative efforts were directed at funding for “clean coal technology” – a mythical remedy – stripping the Environmental Protection Agency (EPA) of its regulatory authority to regulate greenhouse gas (GHG) emissions, and generally doing the bidding of the large coal companies.

The upper chamber, however, is worth a closer look. At the beginning of “the lost decade,” West Virginia was represented in the US Senate by Robert C. Byrd and John Davison “Jay” Rockefeller IV, both of whom seemed to have a change of heart regarding their loyalty to the coal industry once they were in a position where they didn’t have to face the voters again.

In 2008, West Virginia had the lowest electricity prices in the country. By 2020, eleven other states had lower prices. In fact, over this period, electricity prices in West Virginia increased faster than in any other state in the nation. For the reasons described in Chapter 8, the blame for this development can be laid almost entirely at the failure of the West Virginia Public Service Commission (PSC) to adopt policies that protected the interests of electric utility ratepayers.

But apart from the systemic failure, four decisions of the PSC during “the lost decade” stand out as being particularly irresponsible and costly for ratepayers: approval for West Virginia electric utilities to acquire four aging, inefficient coal plants that formerly were owned by their affiliated unregulated subsidiaries.