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Some utilities may have reached reliability deal

CHARLESTON, W.Va. -- FirstEnergy and several smaller utilities have apparently reached a deal with state regulators on West Virginia's first electrical reliability standards.

The standards, mandated by the state Public Service Commission, would basically set targets for how utilities should minimize power outages and quickly get electricity back on for their customers.

PSC hearings had been scheduled to start today to consider utility proposals for the targets. PSC staff and consumer advocates had said the utility's proposals were far too lax and would do little to improve the reliability of West Virginia's electrical system.

On Monday, the commission issued an order revealing that a "joint stipulation" had been reached among all of the parties, except for one of West Virginia's major electrical utilities, American Electric Power.

Commissioners called off today's hearing and ordered copies of the settlement to be provided to the PSC by Friday. Commissioners said they would schedule a later hearing to review the settlement and hear testimony about why AEP isn't a party to it.

Jeri Matheney, a spokeswoman for AEP's Appalachian Power unit, said parties in the case were "still working on some of the details of the settlement. We intend to file something later this week."

Asked if that means AEP is likely to eventually sign on to the settlement, Matheney said, "This was not the final stipulation. We're still working on the stipulation."

Todd Meyers, a spokesman for FirstEnergy companies Monongahela Power and Potomac Edison, said that terms of the settlement "are still being negotiated."

Byron Harris, chief of the PSC consumer advocate division, said commission rules prohibit the parties from discussing settlement negotiations and said details of the deal would be made public with the stipulation is filed with the commission later this week.

Since January, utilities, PSC staff and other parties have been debating in commission filings proposals for power companies to comply with new agency rules aimed at setting electrical system reliability targets.

The targets are based on three indices that grade how frequently electrical systems go down, how long those systems are down, and how long customers themselves go without power.

West Virginia was one of only 12 states listed in a 2005 Edison Electric Institute study as having no targets for utility reliability as well as no requirement for power companies to report reliability data to the PSC.

The lack of reliability standards came to light in 2010, when the commission investigated widespread blackouts across West Virginia following a winter storm in mid-December 2009.

As a result of that investigation, the PSC in July 2011 rewrote its statewide rules to require new reliability targets. The commission is considering utility proposals for what those targets would look like.

The issue arose again this summer, after a series of late-June thunderstorms left thousands of state residents without power, some for a week or more.

Commissioners have been conducting a separate investigation of power outages related to those storms, and on Monday announced plans for a public hearing in that probe. The hearing was scheduled for 9:30 a.m. on Oct. 22 at the PSC headquarters in Charleston.

Setting electrical system reliability targets involves complicated formulas that include averaging power outage frequency and duration, and accounting for acceptable deviations from those averages.

The matter appeared headed for a contentious hearing, with PSC staff and consumer advocates saying utility proposals would allow more frequent and longer duration outages than the staff and consumer advocates believed were appropriate.

PSC staff had warned that utility proposals would simply require companies "to complete work which was neglected for the past 10 years."

"Very little, if any, improvement over the current issues causing outages will change and the infrastructure will continue to deteriorate," wrote Donald E. Walker, a technical analyst with the PSC staff's engineering division.

Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.


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