Energy Czar Leads Charge for Coal Plant

May 23 - Charleston Daily Mail

Gov. Joe Manchin has made several big coal-related promises over the past year. Now he has tapped Paul Hardesty to help turn those promises into reality.

"My charge, as I see it, is to put real, working deals together and make a commercially viable project happen in West Virginia," Hardesty said.

Last month, Manchin named Hardesty executive director of the West Virginia Public Energy Authority - a new position.

The authority was created in the 1980s under the administration of Gov. Arch Moore to build coal-fired power plants, but that effort eventually fizzled. At Manchin's request, the West Virginia Legislature reconstituted the authority during a special session last year.

The authority has held several meetings but has not gotten much further than collecting information.

Still, as the agency has gotten underway and started gathering information, someone needed to step in to coordinate the efforts and keep the governor informed, said Manchin spokeswoman Lara Ramsburg.

"Paul was good enough to agree to add this duty to his responsibilities," Ramsburg said.

Until Hardesty's appointment, the authority had been directed by state Environmental Protection Secretary Stephanie Timmermeyer. She will continue as vice chairwoman.

Timmermeyer said the authority's big task is to come up with an energy plan for the state. "Paul's going to be a great person to lead that charge," she said.

But Hardesty said landing big energy projects is the ultimate goal.

Hardesty does not bring technical know-how to the job. He does not have a college degree. But he does know the West Virginia coal industry. His previous jobs include mining equipment sales, purchasing agent and mine manager. He also has political experience. He has served as Logan County administrator and served two terms on the Logan County Board of Education.

As head of the energy authority, it is his job to bring the players together to hammer out real projects, he said.

"I intend on being a deal maker," he said.

In 2001, Hardesty was named director of the Office of Coalfield Community Development, a unit of the West Virginia Development Office, by then-Gov. Bob Wise. The office was established in 1999 by the Legislature to figure out how to create a sustainable economy in southern West Virginia after the coal is mined.

Hardesty will continue to run that office. He said he is unsure how much time he will spend on the Public Energy Authority job.

If state Commerce Secretary Tom Bulla and development office Executive Director Steve Spence agree, Hardesty said he will recruit some people from various divisions of the development office to help the Public Energy Authority.

"We feel there's a wealth of knowledge in the development office," he said. "We will all pull together, try to make this thing work, and further West Virginia with the existing people we have."

Hardesty said he is looking at possibly moving the coalfield development office and its four employees closer to the office of Jeff Herholdt, manager of the development office's Energy Efficiency Office.

Herholdt has played a leading behind-the-scenes role in West Virginia's bid to attract the federal government's $1 billion, next- generation coal-fired power plant, called FutureGen.

Herholdt's office is on the 6th floor of Building 6 at the Capitol Complex. Hardesty's coalfield development office is on the 5th floor.

Hardesty said he is taking on the Public Energy Authority job at no increase to his $75,120 annual salary.

"Nothing is going to change in the fact that I go out and deal with coal companies and utility companies," he said. "The only difference now is, we've mined coal for years to put it in power plants and burn it. The governor is cognizant that there's a greater value to coal than just burning it and sending it up the smokestack. We're going to try to gasify it, liquefy it, make ammonium nitrate fertilizer and blasting agents that can be derived from coal gasification."

In February 2005, Manchin vowed that he would "leave no stone unturned" to convince American Electric Power that it should build a next-generation coal-fired power plant in West Virginia. The utility has applied to the state for permission to build a plant in Mason County, but has not yet made a definite decision on a site.

Hardesty said Manchin and Michael Morris, American Electric Power's chairman, president and chief executive officer, talk weekly. "They have a fantastic relationship, a mutual admiration," Hardesty said. "The governor has that project squarely on his radar screen."

Last December, Manchin vowed that West Virginia will become home to at least one plant that converts coal into liquid fuel by late 2008. No plan has yet been announced to locate a liquefaction plant in West Virginia.

Meanwhile, an alliance of companies and the federal Department of Energy are moving toward construction of FutureGen, a billion- dollar, next-generation, coal-fired power plant. Earlier this month Manchin announced West Virginia has proposed a 397-acre site for the plant at Lakin, north of Point Pleasant. That site is competing against 11 sites in six other states. The FutureGen Industrial Alliance's selection of a final site is scheduled to be announced in September 2007.

Hardesty said the projects represent an opportunity for West Virginia to lead instead of follow when it comes to energy efficiency and independence.

"We're uniquely situated to bring one of these type projects to a commercial standalone status," he said.

"A lot of states have chased after federal subsidies and tax dollars. Where I think West Virginia holds a better hand is, we have six or seven coal companies that are traded on public exchanges that are very strong financially and highly capitalized and can provide a feedstock of coal for a 20-year time frame - which is what is going to be needed to take a proposal to Wall Street."

Bill Raney, president of the West Virginia Coal Association, said Hardesty's position is significant because it represents a state commitment.

"Heretofore, it was an all-volunteer board," Raney said. "Now it's Paul's job.

"That's desperately needed to establish aggressive consistency, the momentum toward gaining these projects."

Contact writer George Hohmann at business@dailymail.com or 348- 4836.