CHARLESTON, W.Va. -- FirstEnergy officials on Thursday continued to defend their proposal to transfer ownership of a Harrison County coal-fired power plant to a West Virginia subsidiary, in the face of widespread opposition to the $1.1 billion deal.
Witnesses for the Akron, Ohio-based company told the state Public Service Commission that selling its Harrison Power Station near Shinnston to subsidiary Monongahela Power was the best option to deal with deficits in electricity needed to serve Mon Power customers in West Virginia.
Michael Delmar, FirstEnergy's director of regulated generation and dispatch, rejected a proposal from PSC consumer advocates, agency staff and others that his company should have used a "request for proposals" to seek competitive bids for the needed generation.
"We don't believe an RFP would produce anything comparable," Delmar told commissioners. "We're very concerned that an RFP would just spend time."
Delmar continued to testify Thursday in the second day of the PSC's formal evidentiary hearing in the case. Commission Chairman Mike Albert and Commissioners Jon McKinney and Ryan Palmer will decide if FirstEnergy can transfer to Mon Power the 80 percent of the Harrison plant that Mon Power doesn't already own.
The FirstEnergy case is one of two such proposals pending at the PSC.
Columbus, Ohio-based American Electric Power wants to transfer its John Amos plant near St. Albans and its Mitchell facility near Moundsville to its Charleston-based Appalachian Power subsidiary.
A hearing on the AEP case is set for mid-July, and FirstEnergy is hoping for a commission ruling on its request by Sept. 1.
In PSC cases, most of the evidence comes through prepared testimony that is filed prior to the in-person hearing. At the hearings themselves, lawyers for various sides focus on cross-examining other parties' witnesses.
The power companies say their proposals will help them 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 say FirstEnergy is proposing excessive rate increases to fund 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.
Among the critics are advocates for West Virginia seniors and children, who worry about the impact of FirstEnergy's proposal to fund the deal through an annual "surcharge" on Mon Power customers of $63.4 million. That amount translates into a 6 percent rate hike for residential and commercial customers.
Delmar repeated a common argument about coal's importance to West Virginia, telling commissioners that the coal-fired Harrison plant provides state residents and businesses with low-cost electricity.