"It's low cost," Delmar said. "I really don't have to say much more than that. I think what's best for West Virginia is low energy costs. We could diversify, but it's going to cost."
But James Van Nostrand, a West Virginia University law professor who specializes in utility law, has pointed out that the state's dependence on coal-generated power has not recently served the state well, with rates for AEP increasing by 68 percent between 2000 and 2011 and for FirstEnergy by 39 percent over the same period.
In a report about state utility policies, Van Nostrand has argued that the FirstEnergy and AEP proposals would further tie state utilities to coal "without a thorough evaluation of alternatives that may indeed be cheaper for West Virginians."
During this week's hearing, FirstEnergy officials have defended valuing the deal at $590 million, a price that includes a $590 million "acquisition adjustment" for the Harrison plant related to FirstEnergy's 2011 merger with Allegheny Energy.
FirstEnergy's assistant treasurer, Steven Staub, testified that the deal would not work if the PSC cut the $590 million out of the $1.1 billion his company set as a value for the transaction.
"Mon Power can't sustain that," Staub said. "It wouldn't work for Mon Power. Five hundred and ninety million dollars is something we have to have recovery for."
PSC consumer advocate Byron Harris has argued that including the $590 million in this proposal violates a commission order that the figure would not be included in future rate hike proposals from FirstEnergy.
FirstEnergy has tried to suggest that if the PSC doesn't approve the deal, the result might be less use of West Virginia coal -- mostly from CONSOL Energy's nearby Robinson Run Mine -- to fuel the Harrison plant.
During Wednesday's PSC session, Commissioner Palmer questioned West Virginia Coal Association Chairman James L. Laurita Jr. at length about what the industry calls the Obama administration's "war on coal." In prepared testimony, Laurita had said that, "combined, locally produced coal and the Harrison station produce a reliable, sustainable and low-cost energy source, and have a huge positive economic impact to the region."
But when cross-examined by Jackie Roberts, a lawyer for the PSC Consumer Advocate Division, Laurita said no one from FirstEnergy has told him that rejection of the plant transfer would mean the Harrison facility would close or cut back on operations.
"They've not said anything like that to me," Laurita said.
Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.