FirstEnergy accepts PSC plant sale conditions
CHARLESTON, W.Va. -- FirstEnergy Corp. said Wednesday it would accept new conditions that the state Public Service Commission attached to the company's plans for transferring ownership of the Harrison Power Station to its Monongahela Power subsidiary.
"This has been a long and complex proceeding," said Holly Kauffman, president of FirstEnergy's West Virginia operations. "We appreciate the support of the parties in negotiating a reasonable settlement, and are pleased that the Public Service Commission has allowed us to move forward with implementing our cost-effective plan to provide our customers with electricity generated in the heart of our West Virginia service territory.
FirstEnergy issued a statement two days after the PSC issued a ruling in a $1.1 billion case that has drawn protests from environmental organizations and consumer groups, and focused attention on issues like energy efficiency and the future of coal-fired power.
Commission Chairman Michael Albert and Commissioner Jon McKinney voted to approve a settlement agreed to previously by FirstEnergy and by the PSC's staff and Consumer Advocate Division and by the Sierra Club.
But Commissioner Ryan Palmer issued a 10-page dissenting opinion that criticized the settlement, saying it allowed an inflated price for the plant and ignored the electricity industry's move toward more diverse generation portfolios.
Albert and McKinney actually concluded in their ruling that FirstEnergy had not met the legal requirements of showing that a $257 million portion of the transaction listed as an "acquisition adjustment" to the company's rate base "is reasonable and will not adversely affect the public." Albert and McKinney noted, among other things, the potential risks to ratepayers associated with potential future greenhouse gas limits for coal-fired power plants, and uncertainties about future electricity market prices.
So, Albert and McKinney came up with several "conditions" they tacked onto the deal, saying the steps would "protect the interest of ratepayers." Those included providing for a refund to ratepayers if federal authorities conclude the transaction was overvalued, limiting rate recovery if wholesale power sales from Harrison aren't as lucrative as the company expects, and limiting future dividends that Mon Power may pay under certain conditions.
On Wednesday, FirstEnergy lawyers filed documents in which company officials said they would go along with the PSC's conditions.
The West Virginia-Citizen Action Group, which opposed the settlement, has said it will appeal the PSC ruling to the state Supreme Court.
Reach Ken Ward Jr. at email@example.com or 304-348-1702.