Federal Energy Regulatory Commission denies FirstEnergy’s request to transfer Pleasants plant ownership

A federal decision put an end to FirstEnergy Corp.’s bad deal for its West Virginia customers, thousands of whom had protested the company’s plan.

On Jan. 12, the Federal Energy Regulatory Commission (FERC) denied Ohio-based FirstEnergy’s request to transfer ownership of the Pleasants power plant to Mon Power, one of FirstEnergy’s regulated West Virginia utilities.

Under FirstEnergy’s proposal, customers of Mon Power and Potomac Edison, another FirstEnergy-owned utility in West Virginia, would have assumed all of the plant’s costs and financial risks, while FirstEnergy and its shareholders would receive a guaranteed revenue stream.

The Pleasants deal needed approval from both FERC and the Public Service Commission (PSC) of West Virginia. Solar United Neighbors of West Virginia and West Virginia Citizen Action Group, represented by Earthjustice, challenged FirstEnergy’s proposal before FERC and the PSC. At FERC, SUN-WV and WVCAG argued that customers would be forced to cross-subsidize FirstEnergy’s corporate affiliates.

In its decision, FERC denied FirstEnergy’s proposal because of cross-subsidy concerns. In particular, FERC found that Mon Power’s December 2016 request for proposals for additional power plant capacity – which SUN-WV and WVCAG argued was biased in favor of the Pleasants plant – failed to meet federal standards.

“FERC rejected the Pleasants sale because of the risk that it would result in improper cross-subsidization among subsidiaries of FirstEnergy,” said Cathy Kunkel, an energy analyst with the Institute for Energy Economics and Financial Analysis. “Indeed, FirstEnergy clearly orchestrated the sale of the Pleasants plant in order to shift costs and risk from a deregulated subsidiary onto the customers of Mon Power and Potomac Edison.” 

Under this ruling, Mon Power would need to conduct a new RFP process if still seeks to acquire additional power generation capacity.

"In this decision, the FERC commissioners – four of whom were appointed by the current president – unanimously rejected a brazen attempt to force Mon Power and Potomac Edison customers to guarantee profits for FirstEnergy and its shareholders. This is a major victory for West Virginia customers, who would have likely paid hundreds of millions of dollars if FirstEnergy's scheme had succeeded,” said Michael Soules, an Earthjustice attorney representing SUN-WV and WVCAG.

The Pleasants deal would have cost the average residential household approximately $69 each year for the next 15 years, according to expert testimony in the case before the PSC. In total that’s a net present value loss of $470 million that 530,000 Mon Power and Potomac Edison customers would be forced to bear.

FirstEnergy had expressed confidence to investors that the Pleasants sale would close in the first quarter of 2018. However, earlier this week, a lawyer for FirstEnergy, concerned that FERC might rule against the company, made an improper ex parte communication with one of the FERC commissioners in an attempt to influence the Commission's decision.

“From its past history with the Harrison Plant sale to its sham RFP and misleading claims in the FERC and PSC cases on Pleasants, FirstEnergy has repeatedly demonstrated it prioritizes its bottom line and stockholders over consumers in West Virginia. This time, thankfully FERC stopped FirstEnergy in its tracks,” said Karan Ireland of West Virginians For Energy Freedom.

Read the FERC decision.

Analysis: FirstEnergy deal may cause spike in electric bills for schools, hospitals, and manufacturers

Schools, hospitals, and manufacturers in West Virginia could expect Mon Power and Potomac Edison electric bills to increase more than $230 million over the next 15 years if the FirstEnergy Corp.’s plan to transfer ownership of Pleasants Power Station near Parkersburg is approved, according to analysis briefs.

The Public Service Commission of West Virginia is currently weighing whether to approve the deal between the FirstEnergy subsidiaries. If approved by the PSC, Mon Power and Potomac Edison customers in West Virginia will pay for the operation and upkeep of Pleasants power plant.

Solar United Neighborhoods of West Virginia, one of the parties intervening in the case before the PSC, contracted consultants RunnerStone, LLC to provide estimated impacts of the FirstEnergy deal for schools (primary, secondary and colleges and universities), inpatient and outpatient hospitals, and manufacturers.

The $230 million cited in RunnerStone’s briefs is more than half of the nearly $470 million that an analyst cited to PSC on the potential cost of the FirstEnergy deal to consumers.

“The briefs provide eye-opening context to the potential price we’ll have to pay for FirstEnergy’s bad deal for West Virginians,” said Karan Ireland, campaign director for Solar United Neighborhoods of West Virginia.

Here’s the breakdown of the possible impact for the next 15 years, based on RunnerStone’s analysis:

  • Manufacturers could face an increase of $181 million. A medium-size manufacturing facility spending around $600,00 annually would pay about $234,000 in added costs; a large manufacturing facility could pay an additional $3.1 million. Click here to read the full brief on manufacturing.
  • 53% of WV schools are served by Mon Power and Potomac Edison and could pay $42.8 million more on electric bills. A district with three elementary schools would pay about $235,000. The Morgan County school district, for example, would fall into this category. Click here to read the full brief on schools and universities.
  • Hospitals — many in rural areas already struggling to keep doors open — may see around $7.5 million increase in energy budgets. A 425,500-square-foot inpatient hospital would pay about $450,000 in added costs. For comparison, Ruby Memorial Hospital at West Virginia University is a 500,000-square-foot building. Click here to read the full brief on healthcare.

“Not only are you hitting folks in the wallet at their homes, the FirstEnergy deal could affect the budgets of where they work, where their kids go to school, and the hospitals that serve their families,” said Ireland. “All of this because an Ohio-based corporation wants to move ownership of a plant to benefit its shareholders and its bottom line.”

West Virginians For Energy Freedom is a coalition of economic and ratepayer advocacy groups, faith-based organizations, businesses, and elected officials who oppose FirstEnergy’s bailout attempt. Since January, the coalition has been raising awareness about FirstEnergy’s bad deal for Mon Power and Potomac Edison customers.

Lewisburg resolution opposes FirstEnergy sale of Pleasants power plant

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On Tuesday (Nov. 28), Lewisburg Mayor John Manchester and the City Council passed a resolution opposing FirstEnergy's proposed sale of Pleasants power plant from one subsidiary to two other subsidiaries, Mon Power and Potomac Edison. Manchester and the council submitted the resolution to the Public Service Commission of West Virginia.

The Lewisburg resolution, like the City of Morgantown's earlier this fall, urges the PSC not to approve the deal without a thorough investigation of Mon Power’s actual capacity needs, the cast of other resource options, and the financial risks of purchasing another large, aging power plant. Click here to read the Lewisburg resolution.

Mayor Manchester was one of the first elected officials to join our coalition.

Op/Ed by Jeremy Richardson: Pleasants Power deal would stick WV ratepayers with uneconomic plant

West Virginia native Jeremy Richardson of the Union of Concerned Scientists wrote an Op/Ed commentary about the FirstEnergy/Pleasants power plant deal in The Charleston Gazette-Mail. 

Excerpt: There’s an old saying that goes, “Fool me once, shame on you. Fool me twice, shame on me.”

The West Virginia Public Service Commission will soon make a decision that reveals whether it has learned that lesson. If not, hardworking West Virginians are in danger of footing the bill.

At issue is FirstEnergy’s proposal to transfer ownership of one of its coal-fired power plants, the Pleasants Power Plant, from one of its subsidiaries to another. While that might not sound like a big deal, it turns out that, if approved, it could cost West Virginians dearly on their monthly electricity bills.

The current owner, Allegheny Energy Supply Co., is a merchant generator in an unregulated market — meaning that it must sell the power it generates to the competitive wholesale market and compete with other resources, like natural gas power plants, to earn profits. On the other hand, Mon Power and Potomac Edison Power, the proposed new owners, are in West Virginia’s regulated market — meaning they get a guaranteed rate of return on their assets — paid for by ratepayers.

If this sounds familiar to you, it should. FirstEnergy just did the same thing in 2013, when it transferred full ownership of the Harrison Power Plant over to Mon Power. At the time, utility executives claimed the plant was needed to meet future demand, and that it had the “potential to significantly reduce customer rates.”

How has that panned out?

Click here to read the rest of Richardson's commentary.

Let the commissioners and your lawmakers know that you oppose FirstEnergy's bad deal for West Virginia! 

News report: Timing of Pleasants Power Station transfer decision still unknown

In case you've been wondering when a decision might be coming in FirstEnergy's bad deal for West Virginia, Jim Ross of The State Journal has an update: 

CHARLESTON — The Public Service Commission of West Virginia has yet to decide whether to allow the transfer of ownership of the Pleasants Power Station, and it does not have a schedule for doing so.

“The parties have asked for a decision to be made in a timely manner, but there is no deadline,” PSC spokeswoman Karen Hall said recently, adding that there is no statutory deadline for a decision.

FirstEnergy Corp. subsidiaries Mon Power and Potomac Edison filed a request with the PSC on March 7 to purchase the coal-fired Pleasants Power Station at Willow Island from fellow FirstEnergy subsidiary Allegheny Energy Supply for $195 million.

Click here to read the full report.

We think no news is good news! You've still got time to protest FirstEnergy's latest attempt at a corporate bailout. Click here to visit TAKE ACTION page!

#NoWVBailoutForFirstEnergy

 

 

Action alert: Email your lawmakers and ask them to oppose FirstEnergy's bad deal

As the Public Service Commission weighs FirstEnergy's proposed sale of the Pleasants Power Station, there's another group of leaders who might be able to affect the decision.

Members of the West Virginia Senate and House of Representatives don't have a vote on the case but they do represent YOU! Ask your lawmakers to join the more than 2,500 people who have registered their opposition with the PSC.

Click here to send an email to the legislators who represent you in Charleston.

There's a pre-written email but we encourage you to edit the message to add your own concerns. Got a question or suggestion? Click here to send us an email.

Action Alert: Thank the CAD for standing up for ratepayers

Join us in recognizing the hard work of another intervenor in FirstEnergy Corp.'s bad deal for West Virginians before the Public Service Commission of West Virginia.

The Consumer Advocate Division, created by statute in 1981, is an independent division of the PSC that primarily advocates for residential customers. The CAD will almost always intervene in cases before the PSC for customers, striving to keep utility rates as low as possible.

In the FirstEnergy case, the CAD's witnesses submitted strong testimony to commissioners. Here are some highlights:

  • "The primary risks to ratepayers are the capacity is not needed and the costs are too high. These are the same risks FE shareholders no longer want to bear."
     
  • "The Mon Power and Potomac Edison Petition for approval of the acquisition filed in West Virginia Public Service Commission Case No. 17- 0296-E-PC itself states on page 6 that 'AE Supply will likely either sell Pleasants to another party or retire it... .' If retirement is the highest value option, Pleasants is not worth $150 per kW. In fact, AE Supply would be better off paying a third party to accept the Pleasants’ liability rather than to shutter it.”

Click here for to read the CAD’s full testimony.

Please take a moment to send a note to the CAD to thank them for their strong work on behalf of ratepayers! Remember: they are here for YOU!

Click here to send the CAD staff a "Thank You" fax.

Brief: Mon Power and Potomac Edison do not need to purchase a large power plant

Lawyers filed their initial briefs today (Thursday, Oct. 19) with the Public Service Commission of West Virginia in FirstEnergy Corp.’s proposed sale of the Pleasants Power Station from Allegheny Energy Supply (“AE Supply”) to Monongahela Power and Potomac Edison. All three companies are subsidiaries of FirstEnergy, which is based in Akron, Ohio.

Attorneys representing West Virginia Solar United Neighborhoods (WV SUN) and West Virginia Citizen Action Group (WV CAG), founding members of West Virginians For Energy Freedom are Emmett Pepper of WV CAG and Michael Soules of Earthjustice.

Highlights from the brief

  • Mon Power and Potomac Edison (the Companies) do not need to purchase a large power plant.
     
  • Although the Companies have tried to obscure it with a panoply of unsupported rationales, the record shows that the proposed transaction is being driven by FirstEnergy’s stated desire to reduce its exposure to market risks by shedding its merchant operations – at the expense of West Virginia customers.
     
  • If approved, the transaction would shift the costs and market risks of the Pleasants Power Station onto 530,000 West Virginia customers, while FirstEnergy – and its shareholders – enjoy full cost recovery and a steady rate of return on the plant’s regulated rate base.

Click here to read the full brief.

And FYI
According to PSC's website at 5 p.m. today, in Case #17-0296-E-PC, the number of letters from the public: 
Total In Protest:  2511
Total In Support:    51

Action alert! Join the protest against FirstEnergy's bailout attempt

More than 2,000 people have registered written protests with the PSC against the sale of Pleasants Power Station by FirstEnergy Corp. to two of its subsidiaries, Mon Power and Potomac Edison.

So far, protests outweigh support 40-to-1. Testimony in the PSC hearing on the deal resumes Tuesday, Oct. 10.

Before Oct. 10, let’s double that show of opposition! Ask ONE friend or family member to send a Fax to the PSC or sign our petition at EnergyFreedomWV.org/take-action.

Need inspiration? More than 100 West Virginia residents testified at the PSC's Public Hearings in Parkersburg, Martinsburg and Morgantown. Of those, 71 spoke out against FirstEnergy's bid for corporate welfare. Read the transcripts:

Evidentiary hearing: Witnesses detail how bad FirstEnergy deal could be for WV

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In the first week of the evidentiary hearing on FirstEnergy Corp.’s bailout attempt before the Public Service Commission of West Virginia, witness after witness didn’t support the Ohio-based company’s claims of capacity and savings for Mon Power and Potomac Edison ratepayers.

On Sept. 26, neither of FirstEnergy’s witnesses submitted testimony before the hearing that the plant would definitely close, and neither witness would say it on the stand when asked under oath during the hearing. FirstEnergy's own experts contradict the doom-and-gloom message that the utility company is peddling.

Bradley Eberts, a witness for FirstEnergy on Sept. 27, says that even based on his projections, Mon Power and Potomac Edison will have a surplus of energy for every hour until 2021, except 3 hours in 2020 and 24 hours in 2021. And that's all WITHOUT buying the Pleasants plant.

Stephen Gabel testifying on behalf of Longview Power, an intervening party, on Sept. 28: “(Mon Power) overestimated their need by many hundreds of megawatts… The whole premise of this case is that they need capacity. They don't need capacity."

Also on Sept. 28, WV Consumer Advocate Division's witness Emily Medine when asked if Pleasants’ closure would break her heart: “Yes. But that doesn't mean a regulated utility should own that plant... I just joined the National Coal Council and I'm very supportive of coal ... That doesn't mean a regulated utility needs to be the owner of that plant."

Wrapping up scheduled testimony on Sept. 29, PSC Utilities Division Director Terry Eads, who is historically pro-utility, said he is concerned that if the energy prices aren't as high as FirstEnergy forecasts, then it isn't as good of a deal. Eads, however, says he is mostly worried about what he called "externalities." Example: How PJM deals with subsidies in other states for nuclear power plants and the potential of carbon pricing.

He closed by saying that if it is a good deal the companies should be willing to bear some of the risk.

Testimony in the evidentiary hearing resumes Oct. 10.