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Harrison plant costs too high, consumer group says

CHARLESTON, W.Va. -- West Virginia electricity customers are being asked to pay far too much to allow Monongahela Power to recoup the cost of buying the Harrison Power Station from its corporate parent, the West Virginia-Citizen Action Group says in a new state Public Service Commission filing.

Bill DePaulo, a lawyer for WV-CAG, outlined concerns about the cost and other objections his group has to a proposed settlement that would allow FirstEnergy to transfer the plant to its West Virginia subsidiary.

WV-CAG says it would be wrong, and illegal, for commissioners to approve a settlement to allow Mon Power to recover $858 million from customers for the purchase of a plant that has a book value of just $554 million.

DePaulo said his group opposes that price, even though it's less than the more than $1.1 billion that FirstEnergy and Mon Power had initially asked the PSC to approve.

"Reducing the improper markup by some $200 or $300 million in no way alters the markup's illegality," DePaulo said in a 22-page objection document filed Friday.

WV-CAG filed its objection notice two days after FirstEnergy announced it had reached a deal with PSC staff, the agency's consumer advocate and various industry groups.

FirstEnergy is seeking PSC approval to sell its Harrison Power Station near Shinnston to subsidiary Mon Power. The company says the move is the best option to deal with deficits in electricity needed to serve Mon Power customers in West Virginia.

Critics say FirstEnergy proposed 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 said the agreement includes a commitment to "bring more jobs" to West Virginia, and provides financial contributions for economic development, weatherization programs, low-income utility payment assistance and an education program to promote energy efficiency initiatives in the state's public schools.

But WV-CAG says the settlement "while sprinkling a mix of parsley relating to energy efficiency and other do-gooder actions throughout its text, takes a complete dive on the overriding issue: If approved, West Virginia will be doomed to a future of near-total dependence on coal."

"Plainly, the overriding need of the ratepayers of West Virginia is to diversify the fuels on which it depends for electricity in the most aggressive manner possible," the group's objection said. "The acquisition of Harrison ... is the exact opposite of diversification; it is doubling down when the house odds are stacked resolutely against coal."

The Sierra Club, which had also intervened in the case, said it tentatively approved, but was still reviewing details of the proposed settlement.

Under the settlement, FirstEnergy would have to double Mon Power's goals for programs aimed at saving electricity through energy efficiency, but even those improvements would leave West Virginia far behind what other states are achieving.

Sierra Club President Michael Brune, answering questions posed via Twitter, said that his group is still reviewing the settlement, "but we do know that WV is last in the nation" in energy efficiency and "should be a leader." Brune said his group plans to push FirstEnergy to do more and that energy efficiency creates jobs and saves customers money.Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.


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