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PSC starts hearing on FirstEnergy plant transfer

CHARLESTON, W.Va. -- As the state Public Service Commission began formal hearings on the case, senior citizens, consumer advocates and clean-energy activists turned out Wednesday to oppose FirstEnergy's effort to transfer ownership of a major coal-fired power plant to its West Virginia subsidiary.

Representatives of AARP joined officials from the Sierra Club, West Virginia-Citizen Action and other groups to question the proposal, which has also drawn strong criticism from PSC staff and the agency's Consumer Advocate Division.

Gary Lynne Shearer, an AARP member from Weston, said that a rate increase FirstEnergy hopes would fund the transaction "paints a bleak picture for West Virginia ratepayers, particularly those who are older and living on fixed incomes across our state."

"The transfer of the Harrison Power Station ... is a costly proposition for more than a half million First Energy ratepayers in the Mountain State," said Richardo Stith of Martinsburg, another AARP member who addressed the commission prior to the official start of the hearing.

Hearings are scheduled to run through at least Friday, and the PSC hearing room in Charleston was initially packed Wednesday morning with lawyers, witnesses and spectators.

PSC Chairman Michael Albert said the commission expects to hear from more than two-dozen witnesses over three days as it tries to sort out the proposed $1.1 billion transaction.

"This is not an easy decision," Albert said. "There are a host of novel and conflicting issues in this case."

Albert said the PSC had received about 1,100 public comments opposing the transaction and roughly 500 in favor of it.

But in lengthy opening remarks, Albert, a former utility company lawyer whose firm represents FirstEnergy, criticized what he said were inaccurate comments submitted to the PSC and reported by the media about the case. Albert did not provide any specific examples.

At issue before the PSC is Akron, Ohio-based FirstEnergy's proposal to transfer to its West Virginia subsidiary, Monongahela Power, the 80 percent of the Harrison Power Station that Mon Power doesn't already own.

The FirstEnergy case is one of two such proposals pending at the PSC.

Columbus, Ohio-based American Electric Power wants to transfer its John Amos plant near St. Albans and its Mitchell facility near Moundsville to its Charleston-based Appalachian Power subsidiary. A hearing on the AEP case is set for mid-July.

The power companies say their proposals will help them deal with upcoming deficits in electricity needed to serve Mon Power customers in northern West Virginia and Appalachian Power customers in the southern part of the state.

"There really are real benefits to Mon Power to control their own destiny and own this asset," Michael Delmar, FirstEnergy's director of regulated generation dispatch, told commissioners in testimony Wednesday.

Critics say FirstEnergy is proposing excessive rate increases to fund an overvalued transaction, ignoring the potential gains from better demand-side energy efficiency programs, and locking the Mon Power subsidiary into a generation mix that is too narrowly focused on coal.

FirstEnergy wants to value the Harrison plant at roughly $1.1 billion, about twice what critics say it is worth. The company says the deal would be funded through an annual "surcharge" on Mon Power customers of $63.4 million, which translates into a 6 percent rate hike for residential and commercial customers, PSC documents show.

In PSC cases, most of the evidence comes through prepared testimony that is filed prior to the in-person hearing. At the hearings themselves, lawyers for various sides focus on cross-examining other parties' witnesses.

For example, PSC consumer advocate lawyer Jacqueline Lake Roberts on Wednesday questioned Delmar repeatedly about his assertion in prepared testimony that improved energy efficiency and demand reduction programs aren't reasonable alternatives for Mon Power to deal with its projected generation deficit.

Commissioners did not schedule a public hearing to allow citizens to speak out on the FirstEnergy proposal, but agreed to allow several speakers who showed up for this week's formal, evidentiary hearing, to deliver brief statements.

Among the speakers was Stephen Smith, director of the West Virginia Healthy Kids and Families Coalition, who told commissioners that average West Virginia families would be hurt by the FirstEnergy proposal.

"We believe a transaction that includes more efficiency programs will create more jobs and allow more families to get back on their feet," Smith told the PSC.

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


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