John Amos plant transfer OK'd
CHARLESTON, W.Va. -- The state Public Service Commission on Friday approved American Electric Power's plan to transfer complete ownership of its John Amos power plant near St. Albans to the company's West Virginia subsidiary, Appalachian Power.
Commissioners declined, though, to approve the transfer of half of the ownership of the Mitchell power plant in Moundsville to Appalachian Power or to allow the merger of AEP's Wheeling Power into ApCo, deferring rulings on those two issues.
Commissioners issued their ruling in the second of two closely watched cases in which large power companies were seeking to transfer ownership of coal-fired power plants to their West Virginia affiliates.
In October, the PSC approved the transfer by FirstEnergy of its Harrison power station near Shinnston to its Monongahela Power subsidiary.
FirstEnergy and AEP said the proposals would help their regulated utilities 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.
Critics of both proposals, including environmental and consumer groups, worried about potential impacts on customer rates, said the utilities were ignoring potential gains from better energy-efficiency programs and complained that the transactions locked West Virginia into a generation mix too narrowly focused on coal.
ApCo proposed acquiring from AEP the last 867 megawatts of the 2,900-megawatt Amos plant that ApCo doesn't already own.
In a 50-page ruling announced Friday afternoon, Commissioners Michael Albert, Jon McKinney and Ryan Palmer dismissed such concerns, at least regarding the Amos transaction.
"The Amos acquisition has a great deal of merit and few, if any drawbacks," the commission said.
Jeri Matheney, spokeswoman for Appalachian Power, said in an email that the company is "glad to see that the commission recognized customers will benefit from the low-cost electricity that the Amos plant provides and approved the transfer of Amos to Appalachian."
"Further, we fully understand the reasons that the Commission deferred approval of the transfer of the Mitchell Plant and the merger of Wheeling Power into Appalachian, and we're glad we'll have the opportunity to address the benefits of both the Mitchell Plant and the merger for all our West Virginia customers," Matheney said.
In a news release, the PSC said it deferred ruling on the Mitchell plant transaction because regulators in neighboring Virginia already had rejected the deal.
"Reliance on a transaction that is critical to an overall long-term capacity plan, but which cannot go forward because of regulatory roadblocks in other jurisdictions, is not realistic or reasonable at this time," the commission said.
The PSC said it deferred ruling on the ApCo-Wheeling Power merger because the Amos transaction alone will resolve Appalachian's generation capacity deficit until at least 2015.
Jackie Roberts, director of the PSC's Consumer Advocate Division, said she is pleased that the commission followed her division's recommendation that it approve only one of Appalachian Power's two proposed plant acquisitions. However, Roberts said, not all of her concerns were addressed by the PSC ruling.
"We were very concerned that there were no arm's-length negotiations," Roberts said. "There were discussions among the operating companies, but there were no negotiations. We thought the market should be tested to see if that was the best opportunity for them or if they could diversify their portfolio."
The West Virginia-Citizen Action Group is appealing the PSC's FirstEnergy ruling to the state Supreme Court. WV-CAG spokeswoman Cathy Kunkel said Friday that the commission didn't address all of her group's concerns -- such as liabilities for toxic coal-ash impoundments and not having a more diverse generation portfolio.
"It's disappointing that the commission does not consider demand-side resources -- energy efficiency -- as resources that our utilities should be investing in over the long term to help reduce the magnitude of future capacity additions," Kunkel said.
Reach Ken Ward Jr. at email@example.com or 304-348-1702.