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Analysis: Pleasants deal would cost WV manufacturers, schools and hospitals

Pleasants Power Station

The Pleasants Power Station in Pleasants County.

As Mon Power and Potomac Edison await approval to buy a Pleasants County power plant, an analysis backed by opposition parties says manufacturers, schools and hospitals in West Virginia will have to pay about $230 million more on their utility bills over 15 years if the deal goes through.

Technical consultant RunnerStone conducted the analysis for Solar United Neighborhoods of West Virginia, a group opposed to the deal.

According to the analysis, manufacturers serviced by the companies could pay $181 million more in utility bills over 15 years. The average medium-sized manufacturing facility would see a $15,642 bump in its bill yearly, the analysis says.

“Increasing the burden on West Virginian manufacturers could reduce the competitiveness of their businesses when compared to other regions,” the analysis says.

Pleasants Power Station, a coal-fired plant, is owned by FirstEnergy, parent company of Mon Power and Potomac Edison. If the $195 million deal goes through, the plant would become part of the regulated West Virginia market, where it is guaranteed a profit.

The transaction requires approval from the state Public Service Commission, which has yet to make a ruling.

A frequent criticism of the Pleasants deal is that it mirrors Mon Power’s purchase of the Harrison power plant in Haywood, Harrison County. A report from the Institute for Energy Economics and Financial Analysis said that deal could cost customers more than $160 million. In August, an energy and environmental consultant who filed testimony on behalf of opposition groups said the deal could cost customers $470 million over 15 years.

RunnerStone’s cost estimates were “based on an additional energy charge of $0.0021 per [kilowatt hour]” derived from the consultant’s testimony, according to the analysis of the Pleasants plant deal.

Opponents, such as West Virginians for Energy Freedom and West Virginia Citizen Action Group, say maintaining the plant would be costly, and utility customers would have to foot the bill via rate hikes.

Primary and secondary schools and universities could pay an additional $42.8 million over 15 years, while hospitals could pay $7.5 million more during that time, the analysis says. Both of those cost estimates factor in “median energy intensity” measurements from the 2012 Commercial Buildings Energy Consumption Survey.

The companies maintain that the deal will lead to a 1.6 percent net decrease in customer rates and that the purchase is necessary so they don’t have an energy shortfall. Other supporters, such as the Pleasants Area Chamber of Commerce, say the plant is a pillar of the local economy and the transaction is needed to keep it from shutting down.

“While customers are expected to realize the transactions market hedging benefits, the state and surrounding communities should also gain the security of knowing that Pleasants is a reliable utility asset and a proven contributor to the economy and well-being of West Virginia for years to come,” Mon Power and Potomac Edison said in a filing last March with the PSC.

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

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