The group Energy Efficient West Virginia noted that utilities around the country are moving to inexpensive and less-polluting natural gas, especially in deregulated electricity markets, while the FirstEnergy and AEP proposals would transfer coal-fired generation to West Virginia's captive, regulated market, where ratepayers would foot the bill.
Consumer advocates and environmental groups agree that FirstEnergy and AEP should be made to consider buying inexpensive gas-fired power or renewable energy on the open market to meet their future shortfalls in electricity.
Byron Harris, chief of the PSC's consumer advocate division, said his office believes the power companies should have issued requests for proposals to explore all possible alternatives for meeting any shortfalls in electricity generation for their customers.
"Companies must explore all options for satisfying their energy and capacity requirements, not just through the narrow view of affiliate transactions," the consumer advocate said in comments filed in a related PSC case.
Citizen groups and the consumer advocate also agree that the power companies wrongly did not consider efficiency efforts that would decrease the demand for electricity in the first place.
"The PSC needs to make energy-efficiency investment a priority when evaluating these kinds of projects," Energy Efficient West Virginia said. "It's just common sense that we should try to reduce our energy needs first, before we require West Virginia ratepayers to pay for any new power plant efficiency."
In an interview Friday, Appalachian Power President Charles Patton said his company wouldn't be able to fully respond to criticism of the company's proposal until organizations that intervened in the case filed formal testimony. Patton did say that, while he wants to expand Appalachian Power's efficiency programs, doing that isn't the answer to its upcoming power deficit.
"Using energy efficiency to replace 1,700 megawatts of coal capacity is absurd," Patton said. "It just doesn't work."
Patton also defended Appalachian Power's efforts to explore alternatives.
"We did a detailed analysis looking at new gas plants and at all of the options," Patton said. "The least-cost option for my company and for our customers is the transfer of these coal plants."
However, James Van Nostrand, director of the Center for Energy and Sustainable Development at the West Virginia University College of Law, said PSC rules don't really require complete long-term planning by utilities, and the power plant transfer cases are a perfect opportunity to start that process.
"West Virginians have not been well-served in recent years by the heavy dependence of local utilities on coal for electricity generation," Van Nostrand said in a December 2012 report.
As coal prices have gone up, electricity prices of the four major utilities serving West Virginia "have similarly soared," Van Nostrand wrote. From 2000 to 2011, AEP's residential electricity prices increased by 68 percent, he wrote, and FirstEnergy's by 39 percent.
The power companies' proposals would further tie West Virginia utilities to coal, Van Nostrand noted, "without a thorough evaluation of alternatives that may indeed be cheaper for West Virginians.
"The need for integrated resource planning cannot be made more clear than through the obvious inadequacies of the [FirstEnergy proposal], with its self-serving 'analysis' that concludes how 'fortunate' West Virginia ratepayers are to be able to take these uncompetitive plants off the hands of the FirstEnergy affiliates," Van Nostrand wrote.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.