The Sierra Club urged the Virginia State Corporation Commission Thursday to reject Appalachian Power’s (APCo) petition to recover $31.6 million in environmental compliance costs for its 2,900-MW John E. Amos and 1,299-MW Mountaineer coal-fired plants, saying the company should shutter them by 2028.

“The question for the commission today is whether it is reasonable and prudent to continue to invest millions of dollars into uneconomic, less competitive coal plants when all the signs, the market and the industry trends, are pointing towards retirement,” Sierra Club attorney Dori Jaffe said in her closing argument at the end of a two-day hearing Thursday (PUR-2020-00258).

“A carbon price is coming, and the company’s customers shouldn’t be left holding the bag when it does,” she added.

James Martin, regulatory case manager for APCo parent American Electric Power (NASDAQ:AEP), acknowledged, “our basic position is that carbon costs are coming. It’s just a question of when and how much.”

It was the “when and how much” that were at issue.

In his closing argument for APCo, attorney Daniel Summerlin III, of Woods Rogers, said that allowing the two coal-fired plants to stay open until 2040 would offer “maximum flexibility” for customers. Mandating their replacement by 2028 would impose a “tremendous risk” and costs on customers, he said.

Testifying on behalf of the Sierra Club, Rachel Wilson, an energy policy and economics analyst with Synapse Energy Economics, said it would be uneconomic to invest in both coal combustion residuals (CCR) standards and effluent limitations guidelines (ELGs) and continue to run Amos through 2040, even assuming no price on carbon emissions by then. Investing in only CCR costs at the Amos plant and retiring it in 2028 would save ratepayers $200 million, she said. Assuming a carbon price increases ratepayer savings to $1.1 billion if the plant is replaced with a combination of renewable and battery storage resources, she said.

APCo said that denial of the CCR investments would result in the immediate shutdown of Amos and Mountaineer.

Agreeing with neither side wholly were representatives of the Attorney General’s Consumer Counsel. In closing arguments, Assistant Attorney General C. Mitch Burton, Jr. said the Consumer Counsel opposes Appalachian Power’s recovering the ELG costs.

The proceedings were largely cordial in tone, though occasional dramatic statements lit up the highly technical back-and-forth, in which attorneys for both sides quizzed witnesses on their prior testimony.

D. Scott Norwood of the Attorney General’s Office accused APCo of “flagrant inconsistency” in its cost estimates in this case as compared to those in a prior docket, and said the company’s petition should not be approved. An attorney for the company tried to coax Norwood into saying it would not be “reasonable nor prudent” to close both coal-fired plants by 2028, but he demurred, saying that a detailed analysis would have to be done.

In his closing argument, Summerlin took issue with Wilson’s report for the Sierra Club. To replace Amos and Mountaineer by 2028, he said, Wilson assumes that APCo could bring online 6,300 MW of solar generation and storage. But that would require 66 square miles of acreage, Summerlin argued, or approximately the size of the Richmond metropolitan area. “Even if it were economically possible  which it’s not … it’s too much, too fast,” Summerlin said.

In response to Martin’s criticism for not carrying her analysis further forward, Wilson testified Wednesday that “the savings associated with early retirement of coal plants becomes greater the longer a period is modeled.” She said the company’s own analysis shows a very slim margin between retiring the coal plants in 2028 or 2040, such that just adjusting one variable “makes the 2028 retirement the least-cost option.”

No recommendations were issued at the conclusion of proceedings. In several weeks’ time, Ann Berkebile, the senior hearing examiner for the commission, will issue a report that will serve as a recommendation to the full commission on whether to accept APCo’s petition.