PSC: FirstEnergy can seek higher capacity without bids

The Public Service Commission has ruled that FirstEnergy, the parent company of MonPower and Potomac Edison, does not need to accept bids for other energy sources before asking the PSC for additional power plant capacity.

The ruling clears the path for FirstEnergy to request approval for MonPower purchasing the Pleasants coal-fired power plant near St. Marys from Potomac Edison. The transfer of the plant would shift its cost and risk from FirstEnergy’s shareholders to ratepayers by placing it in a regulated market.

At least 19 organizations pushed for the PSC to require MonPower to issue a request for proposals for additional power plant capacity, along with the mayors of Morgantown and Lewisburg. Opponents of the PSC’s decision said that the transfer of the plant would harm customers with increased rates.

“We’ve known for months of FirstEnergy’s intention to have West Virginia ratepayers bail out the company by purchasing the struggling Pleasants plant,” said Karan Ireland, program director for the solar advocacy group West Virginia SUN, in a news release. “It’s shocking that the Public Service Commission appears to be blindly falling in line with FirstEnergy’s plan.”

The PSC denied the petition from the Consumer Advocate Division and the independent PSC staff, which asked MonPower and Potomac Edison to show why they shouldn’t have to accept bids for other energy sources. The PSC ruled that the petition was “premature” and the MonPower had not yet filed a request for a plant acquisition, according to the commission order filed Monday.

MonPower and Potomac Edison believe the ruling was appropriate, according to Todd Meyers, a spokesman for both companies.

“It is premature to address questions concerning the Pleasants plant,” Meyers said. “At the time we would ask the commission to rule on any specific course of action to resolve a capacity shortfall, it would be in a separate docket supported by exhaustive testimony, data and evidence.”

FirstEnergy, which supplies power to the northern half of West Virginia, has not formally proposed a transfer of the Pleasants power plant. However, CEO Charles Jones said in an earnings call earlier this year that the company would look to move plants to regulated energy markets, where a profit from customer rates is guaranteed.

Jones suggested the Pleasants plant would be sold to subsidiaries and a request would be filed later this year. Meyers said the companies have no timetable for any filings of this sort.

Opponents of the potential deal say it would be modeled after MonPower’s purchase of the Harrison power plant in Haywood from Allegheny Energy Supply in 2013, which relieved shareholders of the plant’s financial risk. The transfer cost ratepayers more than $160 million, according to an IEEFA report. Meyers said the transfer was a positive, with the hiring of an additional 50 employees and introducing benefits to assist low-income customers.

“The PSC should protect ratepayers and take the simple, common-sense measure to require all utilities to use a competitive process for purchasing new electricity capacity,” said Emmett Pepper, Energy Efficient West Virginia’s executive director. “Our electric utilities need to shop around before buying an expensive plant that will cause rates to go up.”

In its integrated resource plan filed at the end of last year, FirstEnergy said it would consider acquiring another coal-fired power plant to provide additional electric power in the future. This ran opposite of Appalachian Power’s plan, which looked to invest in alternative energy options like wind and solar power.

FirstEnergy’s approach raised questions from the PSC staff about why it would stick with coal instead of moving toward lower-priced energy sources like natural gas. FirstEnergy said coal would be the cheapest option for consumers and that it did not factor in carbon regulations in its plan because federal rules have not yet been implemented.

Reach Max Garland at max.garland@wvgazettemail.com, 304-348-4886 or follow @MaxGarlandTypes on Twitter.

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