Energy

This bill reduces the severance tax rate on metallurgical coal produced in West Virginia, affecting coal mining companies that extract this type of coal. The new rates will take effect in stages starting July 1, 2026, lowering the tax from 5% to 4.5% for the first year, then to 4% the following year, and finally to 3.5% beginning July 1, 2028. Metallurgical coal is defined as coal used for making steel and other metals, distinct from thermal coal used for electricity generation. The tax reduction applies to the gross value of coal produced and includes additional local taxes that are normally part of the total severance tax.

SB 420, the West Virginia First Energy Act, requires regulated utilities to maintain minimum operational standards for coal and natural-gas power plants. It mandates a 69% annual utilization rate for coal-fired facilities, a 30-day on-site coal inventory, and firm natural-gas supply contracts for gas plants. The bill prohibits retiring or reducing coal/gas capacity without Public Service Commission approval (unless an in-state replacement is available) and bans cost recovery for new wind or solar projects in utility rate bases. These provisions directly affect utilities operating in-state coal and natural-gas generation, aiming to preserve reliable, dispatchable power sources and limit reliance on intermittent renewables.