Customer surcharge attracts challenge to Mon Power plant purchase
MORGANTOWN, W.Va. -- A utilities watchdog coalition says Mon Power's proposed purchase of a coal-fired power plant in north-central West Virginia would unfairly pass costs on to consumers when the utility should be investing in plans to make its operations and its customers more energy-efficient.
Energy Efficient West Virginia is hosting what it calls a "Power Hour" in Morgantown on Wednesday to educate people about energy efficiency and to build opposition to the utility's $1.1 billion deal with a sister company, Allegheny Energy Supply. Both are subsidiaries of Ohio-based FirstEnergy. Energy Efficient West Virginia is a coalition of 14 companies and civic and environmental groups, including the Ohio Valley Environmental Coalition.
Last fall, the utilities submitted a plan to the West Virginia Public Service Commission that would transfer full ownership of the Harrison Power Station in Haywood to Mon Power, which currently owns only 20 percent.
In exchange, Mon Power would sell its 8 percent share of the Pleasants Power station at Willow Island to AE Supply, giving that subsidiary 100 percent ownership.
The PSC has scheduled hearings in Charleston for May 29-31 on the transaction, which would also require the approval of the Federal Energy Regulatory Commission.
The utilities are seeking a temporary transaction surcharge to cover the costs of the deal, and those surcharges would eventually become part of their new base rates.
A typical residential customer using 1,000 kilowatt-hours per month would pay less than $1 more than last year's monthly bill, said Mon Power spokesman Todd Meyers. Mon Power has said it won't proceed with the purchase if the surcharge is denied.
Chris Shepherd of the Ohio Valley Environmental Coalition said Monday that utilities are trying to shift the costs of old, inefficient coal-fired plants onto consumers rather than investing in system-wide energy efficiency plans for "their captive ratepayers."
"Most utilities in the region are shedding their exposure to increasingly expensive coal," he said, "not doubling down on it."
Rather than grow capacity, he said, utilities should focus on reducing demand -- as pending legislation in West Virginia would require.
The Energy Efficiency Resource Standard bill proposes that utilities reduce both electricity sales and demand by 15 percent by 2025.
Energy Efficient West Virginia, a coalition that includes the Ohio Valley group, says the bill also would require that utilities help customers save money by making their homes and businesses more efficient.
The bill could be administered either by the utilities themselves or a third-party agency. Advocates say the program has already been successful in neighboring Ohio and Pennsylvania, though both states are in the early stages of implementation.
Mon Power, however, says energy-efficiency programs and reduced demand aren't practical solutions to the significant capacity shortfall it faces.
Buying the Harrison Power Station is much more cost-efficient than buying electricity on the spot market, Meyers said. And with consumer demand expected to grow 1.4 percent per year in West Virginia, that shortfall will only grow.
Relying on market sources also creates "significant risk" for Mon Power's 385,500 customers in the northern half of West Virginia and 132,000 Potomac Edison customers in the Eastern Panhandle, the utility says.
"Our proposed generation transaction ensures a continued supply of reliable, low-cost electricity for our West Virginia customers for years to come," Meyers said in an email. "This is an affordable plan designed to create greater rate stability for our customers."
The Harrison Power Station employs more than 200 workers and supports mining jobs.
Mon Power also calls it "one of the largest and cleanest coal-fired plants in the nation," with nearly $1 billion invested in scrubbers that now remove 98 percent of the sulfur dioxide emissions and other systems that remove at least 90 percent of nitrogen oxide from flue gases.