Earth Protect Blog

 

By Christopher Flavelle, Julie Tate and Erin Schaff

© The New York Times Co.

GRANT TOWN, W.VA. » On a hilltop overlooking Paw Paw Creek, 15 miles south of the Pennsylvania border, looms a fortresslike structure with a single smokestack, the only viable business in a dying Appalachian town.

The Grant Town power plant is also the link between the coal industry and the personal finances of Joe Manchin, the Democrat who rose through state politics to reach the U.S. Senate, where, through the vagaries of electoral politics, he may now be the most important figure shaping the nation’s energy and climate policy.

Manchin’s ties to the Grant Town plant date to 1987, when he had just been elected to the West Virginia Senate, a parttime job with base pay of $6,500. His family’s carpet business was struggling.

Opportunity arrived in the form of two developers who wanted to build a power plant in Grant Town, just outside Manchin’s district. Manchin, whose grandfather went to work in the mines at age 9 and whose uncle died in a mining accident, helped the developers clear bureaucratic hurdles.

Then he did something beyond routine constituent services. He went into business with the Grant Town power plant.

Manchin supplied a type of low-grade coal mixed with rock and clay known as “gob” that is typically cast aside as junk by mining companies but can be burned to produce electricity. In addition, he arranged to receive a slice of the revenue from electricity generated by the plant — electric bills paid by his constituents.

The deal inked decades ago has made Manchin, now 74, a rich man.

Although the fact that Manchin owns a coal business is well known, an examination by The New York Times offers a more detailed portrait of the degree to which Manchin’s business has been interwoven with his official actions. He created his business while a state lawmaker in anticipation of the Grant Town plant, which has been the sole customer for his gob for the past 20 years, according to federal data.

At key moments over the years, Manchin used his political influence to benefit the plant. He urged a state official to approve its air pollution permit, pushed fellow lawmakers to support a tax credit that helped the plant, and worked behind the scenes to facilitate a rate increase that drove up revenue for the plant — and electricity costs for West Virginians.

As the pivotal vote in an evenly split Senate, Manchin has blocked legislation that would speed the country’s transition to wind, solar and other clean energy and away from coal, oil and gas, the burning of which is dangerously heating the planet.

But as the Grant Town plant continues to burn coal and pay dividends to Manchin, it has harmed West Virginians economically, costing them hundreds of millions of dollars in excess electricity fees. That’s because gob is a less efficient power source than regular coal.

Manchin declined an interview request. His spokesperson, Sam Runyon, did not respond to detailed questions about his business interests or about whether those interests affected his actions as a public official. Senate ethics rules forbid members from acting on legislation to further their financial interests or those of immediate family members. There is no indication that Manchin broke any laws.

The private company behind Manchin’s millions

Manchin and his wife owned assets worth between $4.5 million and $12.8 million in 2020, according to Senate financial disclosure forms, which provide only a range with few specifics. Manchin reported dozens of assets, including bank accounts, mutual funds, real estate and ownership stakes in more than a dozen companies.

But the bulk of Manchin’s reported income since entering the Senate has come from one company: Enersystems, which he founded with his brother Roch in 1988, the year before the Grant Town plant got a permit from the state of West Virginia.

Enersystems is now run by Manchin’s son, Joseph Manchin IV. In 2020, it paid the elder Manchin $491,949, according to his filings, almost three times his salary as a U.S. senator. From 2010 through 2020, Manchin reported a total of $5.6 million from the company.

Data from the U.S. Energy Information Administration shows that Enersystems supplies a specific type of coal burned to generate electricity. And since 2002 — as far back as that data goes — Manchin’s company has had just one customer: The Grant Town power plant.

Mountains of gob

The community of Grant Town was built around one of the largest underground coal mines in the world. But since the mine closed in 1985, every other business has shuttered, along with the school. Many of the buildings have been condemned.

Despite its struggles, the community had something valuable to outsiders: mountains and mountains of gob.

Gob, an acronym for “garbage of bituminous,” is waste coal — low-quality material dug from a mine that is mixed with rock and clay, making it harder and less efficient to burn. For decades, dark gray gob piled up on the ground outside coal mines in West Virginia, barren heaps often reaching several stories high.

But in 1978, worried about the country’s dependence on foreign oil, Congress passed a law to encourage alternative energy sources. That led to the opening of several gob-burning plants, including Grant Town.

The developers who planned the Grant Town plant created American Bituminous Power Partners, or AmBit, to build the plant. AmBit signed a long-term contract with the local utility, Monongahela Power, to buy the electricity it produced from gob.

But before AmBit could start construction, federal agencies raised environmental concerns. The company got help from Manchin.

The Environmental Protection Agency was concerned the Grant Town plant would be too close to an existing coal-burning plant, resulting in excessive levels of sulfur dioxide, a threat to human health and plant life, according to documents obtained through a public records request.

Dale Farley, the West Virginia state official in charge of issuing air pollution permits at the time, recalled in an interview that Manchin approached him about approving the Grant Town plant. “He was pretty smooth about it,” said Farley, now 72 and retired. “But he let it be known that he was definitely interested in the project going forward.”

Farley struck an agreement with Monongahela Power, also called Mon Power, to limit emissions from the nearby plant, allowing the Grant Town plant to proceed. He informed the EPA, copying Manchin on the letter, and issued the permit for Grant Town. (Manchin’s intervention was reported by the Charleston Gazette in 1996.)

Had he known at the time that Manchin planned to have a financial relationship with the plant, “it would have bothered me,” Farley said.

After helping to win the permit for the plant, Manchin began to profit from it.

On Oct. 5, 1989, one of Manchin’s companies, Transcon, bought an old coal mine in Barrackville, 5 miles south of Grant Town, for $380,000, according to records in the Marion County Courthouse. That same day, he sold the property and its gob piles to Am-Bit for $500,000 — a profit of $120,000.

But Manchin was not only a supplier of fuel to the Grant Town plant. He also got a share of its revenue.

As the Grant Town plant continued to buy Manchin’s gob, his political ambitions grew. He was elected secretary of state, in 2000. Four years later, Manchin rode a landslide into the governor’s mansion in Charleston. From that position, he helped the power plant win an even more coveted prize.

Shortly after the Grant Town plant began burning gob, AmBit said the operating costs were higher than expected, and the company was going to need more money for the electricity it was supplying to Manchin’s constituents.

Company executives sought approval from the West Virginia Public Service Commission, which balked, in part because the utility, Mon Power, opposed the request.

In 2006, with Manchin now occupying the governor’s office, AmBit again sought a rate increase. But this time, Mon Power supported its request.

The Public Service Commission, led by a Manchin appointee, approved it.

The extra costs were passed on to residents, burdening ratepayers in one of the poorest states in the nation.

In 2020, Manchin’s power reached new heights.

Joe Biden was elected president in part on a promise to address climate change. Making good on that pledge hinges on moving legislation through a Senate that is split 50 Republicans to 48 Democrats and their two Independent allies. With Republicans unanimously opposed to most legislation introduced by Senate Democrats, any single Democrat can stop a bill by withholding support.

Last summer and fall, Manchin blocked the spending bill that contained Biden’s climate proposals, which had included penalties for power companies that did not reduce their coal use.

Among the reasons Manchin gave at the time was the bill’s effect on the power sector.