Stephen Baron, a consultant for the West Virginia Energy Users Group, said FirstEnergy's valuation is "unreasonable." Baron said the move violates the company's agreement -- in a case where the PSC approved its merger with Allegheny Power -- not to seek rate increases for the "premium" value for the Harrison plant used for the purposes of that merger.
Baron also joined other critics of the deal in questioning why FirstEnergy didn't issue a "request for proposal" to try to find the best way to make up any generation deficits the company faces.
Byron Harris, chief of the PSC's Consumer Advocate Division, said in his written testimony that 40 percent of the nation's utility regulatory bodies require or encourage companies to seek competitive bids when they need more power.
"The terms and conditions of resources procured under an RFP would be more likely to be reasonable because the terms are set by market forces," Harris said.
David Schlissel, an energy consultant testifying on behalf of the West Virginia Citizen Action Group and the Sierra Club, said the proposal "would lock West Virginia ratepayers into decades of paying for an expensive large central station generating facility for at least 10 years" and provide Mon Power with more capacity than it really needs.
Schlissel testified that Mon Power would end up relying on two 40-year-old coal plants for more than 90 percent of its internally generated power.
"There will be almost no fuel diversity," he said. "Nothing in the company's portfolio provides a hedge against the risks associated with this near total dependence on a single fuel source."
Catherine Kunkel, another energy consultant testifying for WV-CAG, said that Mon Power could save the equivalent of one-quarter of its stated generation shortfall by improving its programs for demand-side efficiency programs for customers.
"Although efficiency and demand response cannot meet all of the company's shortfall, the inclusion of energy efficiency and demand response would result in a lower cost and less risky portfolio," Kunkel testified.
Previously, FirstEnergy officials had touted their Harrison plant proposal as a way for the company to deal with ongoing debt problems. But last week, the company said other financial moves have helped with those problems, and that the Harrison deal is "no longer critical to the successful completion of our financial plan."
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.