Customers of Appalachian Power and Wheeling Power in West Virginia are set to absorb tens of millions of dollars in additional costs due to financial losses from coal-fired power plants. The utilities, both subsidiaries of American Electric Power (AEP), operated three aging facilities—John Amos, Mitchell, and Mountaineer—despite unfavorable market conditions. These plants, with combined capacities of 5,759 megawatts and operational histories between 45 and 54 years, ran at a loss primarily to use up excess coal supplies and avoid exceeding on-site storage limits.
From March 2024 to February 2025, the plants incurred $66 million in losses, calculated as the gap between electricity sales revenue and operating expenses. Of this, West Virginia residents will cover $36 million, as the utilities serve customers across multiple states. This marks the second consecutive year AEP has over-purchased coal, reflecting poor planning amid a long-term decline in coal’s economic viability.
Natural gas plants have consistently outperformed coal in cost efficiency. During the reporting period, coal-generated electricity costs exceeded market prices in all months except January and February, when extreme winter weather temporarily boosted energy prices. Data from PJM, the regional grid operator covering West Virginia and 12 other states plus Washington, D.C., shows a steady drop in coal utilization since 2014.
The Institute for Energy Economics and Financial Analysis (IEEFA) highlighted these issues in testimony before the West Virginia Public Service Commission. Cumulative losses from March 2023 to February 2025 surpassed $150 million, underscoring the financial burden of clinging to outdated energy infrastructure. Experts warn that continued reliance on uneconomical coal operations risks imposing unnecessary costs on consumers while delaying the transition to more sustainable and affordable energy sources.
— news from Institute for Energy Economics and Financial Analysis
— News Original —
Poor coal economics to cost West Virginia electricity consumers
West Virginia customers of Appalachian Power and Wheeling Power (American Electric Power’s subsidiaries in the state) will pay tens of millions of dollars more in electric rates because of economic losses at the companies’ coal-fired power plants. n nThe coal plants in question are John Amos, Mitchell and Mountaineer. The three-unit Amos plant has 2,900 megawatts (MW) of net summer capacity; the two-unit Mitchell plant has 1,560MW of capacity; and the single-unit Mountaineer plant has 1,299MW of capacity. The age range of the six units ranges from 45 to 54 years. n nWhy did these utilities run their coal plants at a loss? To burn coal. This is the second consecutive year that AEP has found itself in the situation of having contracted for significantly more coal than needed to operate the plants economically. To avoid exceeding the physical limits for its coal stockpiles at the plants, the utility ran them even at times when it did not make economic sense. n nBetween March 2024 and February 2025, the three coal plants incurred $66 million in losses from the difference between the revenue earned from selling electricity into the regional market and the cost of operating the units. As IEEFA testified to the West Virginia Public Service Commission, West Virginia electricity customers will pick up the tab for $36 million (the utility also has customers in other states). n nIn part, this reflects the ongoing poor economics of coal plants. Natural gas plants continue to out-compete coal on an economic basis. During the year from March 2024 to February 2025, the coal plants’ costs averaged more than market prices for all months except January and February, when cold winter temperatures (including a polar vortex) drove up energy market prices. n nThe losses also reflect poor foresight on the part of AEP, given that the declining economics of coal generation is a longstanding trend. Utilization of coal units in PJM (the regional electricity market covering D.C. and parts of 13 states, including all of West Virginia) has been on a downward trajectory since 2014, as shown in the following graph. Yet this is the second year in a row that Appalachian Power and Wheeling Power have found themselves in the position of having bought too much coal. Between March 2023 and February 2025, the losses at the coal units totaled more than $150 million.