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Buying power cheaper than Harrison plant, group says

CHARLESTON, W.Va. -- Monongahela Power could purchase power from the regional electricity market at least the next eight years for less than the cost of buying the Harrison Power Station from its FirstEnergy parent company, a consumer group argues in new testimony filed with the state Public Service Commission.

The West Virginia-Citizen Action Group submitted its new analysis on Tuesday, in advance of a Friday hearing where the PSC will consider a proposed settlement that would allow FirstEnergy to transfer the Harrison plant to Mon Power.

Cathy Kunkel, an energy expert working for WV-CAG on the case, said that purchasing power through the market would be cheaper through 2021 and that ratepayers would only see a possible net benefit of the Harrison deal starting in 2030 at the earliest.

"WV-CAG also argued that the very high energy market prices underlying this analysis overstate the benefit from purchasing Harrison and that, under a more reasonable forecast, Harrison may prove to be a long-term financial burden for ratepayers," the group said in a statement.

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, ignored the potential gains from better demand-side energy efficiency programs and locked the Mon Power subsidiary into a generation mix that is too narrowly focused on coal.

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. WV-CAG 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.

"Mon Power and [sister company] Potomac Edison want to bet more than $500 million of their West Virginia customers' money on the hope that this plant will provide a financial return by 2030," said WVCAG Executive Director Gary Zuckett. "Clearly this deal is not in the public interest but is simply a way for Mon Power to bail out its out-of-state affiliate."

Other parties to the PSC case, including the company, the PSC staff, the agency's consumer advocate, and various industry groups -- as well as the Sierra Club -- have signed off on the settlement.

The PSC hearing is scheduled to start at 9:30 a.m. Friday at the commission office in Charleston.

A witness list for the hearing, released Wednesday, included officials from the PSC staff, the consumer advocate, WV-CAG, Mon Power and the West Virginia Energy Users Group.

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


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