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Utilities agree to tougher reliability rules

CHARLESTON, W.Va. -- West Virginia's two largest electricity suppliers have agreed to meet more stringent reliability standards being pushed by staff and consumer advocates at the state Public Service Commission, according to a deal made public Thursday.

Subsidiaries of FirstEnergy and American Electric Power had originally proposed much weaker versions of the first-ever electrical system reliability targets for how utilities should minimize power outages and quickly get electricity back on for their customers.

Under a proposed settlement, though, West Virginia utilities would have more time -- until 2014 -- to comply with the standards. PSC staff and consumer advocates had wanted the rules to apply immediately, and utilities had wanted then deferred until 2016 or 2018.

"In a settlement, you never get everything you'd like to achieve," said Byron Harris, chief of the PSC's consumer advocate division. "But it's a good outcome. This settlement should cause utilities to improve their reliability."

The settlement still needs PSC approval, and commissioners have indicated they plan to schedule a hearing on the matter.

Todd Meyers, a spokesman for FirstEnergy, said his company believes "the targets we've committed to achieve are reasonable, and that the 2014 timeline to meet the targets is achievable."

"We believe the agreement balances the interests of ratepayers, and should yield improved service reliability at a reasonable expense," Meyers said. "Increased reliability standards typically lead to increased costs. If you want to improve reliability, you need to spend more money on right-of-way maintenance. That said, neither Mon Power nor Potomac Edison have plans to request any rate increases in the near term to achieve the targets."

AEP officials could not be reached for comment.

Earlier this week, on the eve of scheduled PSC hearings Tuesday on the utility proposals, the commission revealed that FirstEnergy subsidiaries Monongahela Power and Potomac Edison had reached a deal with commission staff and consumer advocates.

At the time, American Electric Power's Appalachian Power and Wheeling Power had not yet formally signed onto the deal. Thursday's filing indicates Appalachian and Wheeling eventually signed on, as did several much smaller electrical utilities.

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. A study by the U.S. Department of Energy found power outages in West Virginia take nearly four times longer to fix than the national average.

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. After that, the PSC in July 2011 rewrote its statewide rules to require new reliability targets.

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.

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

Under the new standards, for example, Appalachian Power's target is to have no more than 2.5 power outages per customer per year. And the average duration of all outages for all customers is supposed to meet a minimum target of no more than 230 minutes long.

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


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