News reports

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.

Evidentiary Hearing: Day 1 recap

 The Energy Freedom Fighter delivered important message for the commissioners and legal teams as they entered the PSC headquarters in Charleston.

The Energy Freedom Fighter delivered important message for the commissioners and legal teams as they entered the PSC headquarters in Charleston.

Lawyers spent most of Tuesday cross-examining Mon Power's lead witness, Jay Ruberto, FirstEnergy's Director of Regulated Generation. He was questioned on a wide range of topics, from Mon Power's claims that it needs additional capacity, to the details of Mon Power's request for proposals for new capacity, to the risks and costs associated with purchasing the coal ash impoundment associated with Pleasants.

Near the end of the day, Dr. John Deskins, WVU's Director of the Bureau of Business & Economic Research, testified in support of the transaction. Mon Power hired him last year to evaluate the economic impact of the operation of the Pleasants plant. However, Deskins admitted he had not evaluated whether the transaction would result in higher electric rates and what the economic impact of higher rates would be across northern WV.

BIG TAKEAWAY: Contrary to FirstEnergy's doom-and-gloom narrative, neither witness testified that the plant will close, and neither witness would say it would today when asked.

ABOUT THAT SETTLEMENT BREAK: It's not uncommon for the PSC Chairman to invite parties to try to settle the case, as he did this morning. Typically if cases settle, they settle before the hearing. So it is less likely now that the case will settle, though certainly not impossible.

TODAY: Expect more cross-examination of the company's witnesses, hopefully finishing the remainder of the company's witnesses (who shouldn't take as long because Mon Power's lead witness went today) and leaving the other parties' witnesses on Thursday. The PSC streams the hearings online. Watch here. The hearings, however, are not archived.

 There's time to get involved...

Public Hearings: Talking points, expert testimony & more

Governor appoints new commissioner to PSC

Renee A. Larrick

Gov. Jim Justice has appointed Renee A. Larrick of Daniels to the Public Service Commission of West Virginia. Larrick replaces Kara Cunningham Williams whose term expired June 30, 2017.

The PSC will decide FirstEnergy Corp.'s proposed sale of the Pleasants Power Plant to two FirstEnergy subsidiaries operating in West Virginia. 

Under FirstEnergy’s proposal, Mon Power and Potomac Energy would buy the aging Pleasants power plant from another FirstEnergy subsidiary. The move would shift the financial burden of the plant from FirstEnergy shareholders to Mon Power and Potomac Edison’s customers. These customers would be forced to cover all of the plant’s costs, assume the plant’s financial risks, and pay FirstEnergy a guaranteed profit.

CLICK HERE FOR THE PSC PRESS RELEASE ON THE APPOINTMENT.

CLICK HERE FOR THE REPORT IN THE CHARLESTON GAZETTE.

CLICK HERE TO LEARN MORE ABOUT THE COMMISSIONERS.

FERC tells FirstEnergy to submit more info on Pleasants plant deal

FERC logo

FirstEnergy Corp.'s attempted bailout faces approval on state and federal levels. On June 26, the Federal Energy Regulatory Commission (FERC) sent a deficiency letter to FirstEnergy and requested more information. We are encouraged since "specific deficiencies identified in the letter correspond to deficiencies we've been highlighting in our briefs to FERC," Benjamin Locke, an attorney for WV SUN and WV Citizen Action Group said in an interview with Linda Harris of The State Journal.

CLICK HERE TO READ THE FULL STORY IN THE STATE JOURNAL.

CLICK HERE TO READ THE FERC LETTER.

Possible FirstEnergy move: Will it cost you more or less?

MORGANTOWN, W.Va. (WDTV) - Tuesday evening in Morgantown a public forum was held to assist and inform residents about FirstEnergy's proposed transfer of the Pleasants Power Plant to Mon Power and Potomac.

First Energy Corp subsidiaries Mon Power and Potomac Edison are looking to get regulatory approval to acquire Pleasants Power Station to meet the increasing capacity shortfall in the companies' West Virginia service areas.

Those against this proposal say this would impose higher costs and have health impacts on West Virginians and that's some of what folks explained at the forum. 

 WDTV 5 News

WDTV 5 News

"They (residents) should be worried about their electric bills to go up over the next 15 years," said Cathy Kunkel of West Virginians for Energy Freedom. "If this was such a good asset and really competitive, it should be profitable in the deregulatory market and should make money for FirstEnergy shareholders and the fact that it's not and they want to offload it onto Mon Power customers, it's not going to be very good for us."

READ THE FULL REPORT.

West Virginians for Energy Freedom Host Forum on Pleasants Power Station

 Allen Clayton of WBOY TV interviews Karan Ireland of WV SUN about why FirstEnergy's deal is so bad for West Virginians on Tuesday at The Caperton Center in Clarksburg. Click the photo to watch the report.

Allen Clayton of WBOY TV interviews Karan Ireland of WV SUN about why FirstEnergy's deal is so bad for West Virginians on Tuesday at The Caperton Center in Clarksburg. Click the photo to watch the report.

WBOY-TV recaps our first Community Conversation in Clarksburg to talk with residents, business owners and elected officials about FirstEnergy's bad deal for Mon Power and Potomac Edison customers. Click here to watch WBOY's video.

Thanks to Sierra Club of West Virginia for their presentation and North Central WV Democracy for America for hosting the meeting.

Coming up: Our Community Conversation in Morgantown on Tuesday, March 28! Click here for details.

Purchase request for Pleasants Power Station submitted to WV PSC

MonPower and Potomac Edison insist their request to purchase the Pleasants Power Station from fellow FirstEnergy subsidiary Allegheny Energy Supply is the best option for the companies and their ratepayers, citing low cost, a better chance to avoid costly penalties and local economic benefits.

In the utility companies’ long-expected, 432-page filing to the state Public Service Commission last week, they elaborated on why they chose Pleasants specifically to address their capacity shortfall and the measures they took to make the bid process fair and open.

“It is a well-known asset, a high performer, and lacks the uncertainty and risks of a development project,” said Holly Kauffman, FirstEnergy’s president of West Virginia operations, in prepared testimony.

However, advocacy groups such as West Virginians for Energy Freedom have said the purchase would shift the financial risk of the coal-fired power plant from investors to West Virginia customers, who already have experienced several rate increases in recent years. They argue using a coal-fired power plant would be costlier than relying on the region’s cheaper supply of natural gas.

READ THE FULL REPORT IN THE CHARLESTON GAZETTE-MAIL.

FirstEnergy subsidiaries submit plan to acquire Pleasants station

MonPower and Potomac Edison submitted their plan to the state Public Service Commission Tuesday to acquire the Pleasants Power Station, owned by their parent company FirstEnergy, in Pleasants County, according to reporter Max Garland in The Charleston Gazette-Mail.

 MICHAEL WILLIAMSON | Washington Post file photo. The Pleasants Power Station near St. Marys in Pleasants County

MICHAEL WILLIAMSON | Washington Post file photo. The Pleasants Power Station near St. Marys in Pleasants County

FirstEnergy said in a news release on the long-anticipated move that the plant would be “the least-cost source” to address the companies’ increasing capacity shortfall in West Virginia.

That shortfall is expected to exceed 1,400 megawatts by 2027, the release said. The capacity of the Pleasants plant is about 1,300 megawatts.

The move has been hinted at for about a year from FirstEnergy, as CEO Charles Jones has said in earnings calls that the company wants to move away from competitive energy markets to fully regulated ones like West Virginia’s, where it is guaranteed a profit.

Opponents of the move have warned the transfer would protect the company’s investors at the expense of West Virginia customers. The coalition West Virginians for Energy Freedom formed earlier this year specifically to oppose the acquisition.

“One of the issues here is that energy efficiency and other sources of energy, like natural gas, is much more cost competitive,” said member Emmett Pepper, who is also Energy Efficient West Virginia’s executive director, in a press conference in February. “Instead of using market forces and market values for what works best for customers, we’re being asked to accept what is best for [FirstEnergy].”

READ THE FULL REPORT IN THE CHARLESTON GAZETTE-MAIL.

 

Energy Freedom opposes Mon Power plan

Debbie Dooley
[FirstEnergy] want(s) the average utility customers that have no choice about what they do — where they purchase their power from — they want to force them to bail out the bad decisions of their CEOs.
— Debbie Dooley, co-founder of the Tea Party and Conservatives for Energy Freedom

By David Beard
The Dominion Post
CHARLESTON — An unusual coalition of left and right trod the marble halls of the Capitol last week to lobby against Mon Power’s possible purchase of the Pleasants Power Station from a sister company.
 
Debbie Dooley, the Georgia-based co-founder of the Tea Party and Conservatives for Energy Freedom, joined with Emmett Pepper and Karan Ireland, of West Virginians for Energy Freedom, to speak to legislators about Mon Power’s RFP (request for proposals) to buy a plant to fill a capacity shortfall.
 
West Virginians for Energy Freedom is itself a coalition of various progressive groups, public officials and the League of Women Voters, formed to fight the possible purchase.
 
The coalition believes that Mon Power’s RFP is a disguised effort to buy the coal-fired Station from a FirstEnergy sister and shift the plant’s financial risks from stockholders to ratepayers.
 
Dooley explained why conservatives and progressives are working together on this. “Conservatives are interested in individual liberty and freedom,” she said.
 
She got involved in the energy field because of a fight with Georgia Power in her home state. The utility is building nuclear reactors, experiencing massive cost overruns and is still guaranteed a profit, she said.
 
She started researching ways to give them competition. “Solar clean energy was a natural fit.”  She emphasizes that she’s not against any form of energy. She’s against this kind of approach to energy business and is working in several states, including her neighbor, Florida.
 
“I think the monopoly business model is outdated. Their utility customers are shackled to them,” she said. Their business model allows them to make bad mistakes and bad investments. “They force their utility customers to bail them out.” Stockholders should pay the price for bad decisions, not customers.
 
As previously reported, Mon Power issued its RFP in December, to acquire a 1,300 megawatt (MW) plant and an additional 100 MW of demand resources. Proposals were due by Feb. 3. Mon Power and Allegheny Energy Supply, which owns Pleasants Power Station, are FirstEnergy subsidiaries.
 
In the RFP, Mon Power projects a 1,045 MW shortfall by 2020, rising to 1,400 MW by 2027. Part of that will be due to the sale of its partial interest in a Dominion power facility in Virginia.

Mon Power sells its energy into the PJM market. PJM is the 13-state regional transmission organization. It said it wants whatever plant it buys to lie within the Allegheny Power Systems (APS) zone within the PJM region. The APS zone covers Mon Power’s footprint in West Virginia plus portions of western Maryland, western and central Pennsylvania, and a small piece of Virginia served by other companies.
 
Two members of the West Virginia coalition — WV SUN, devoted to solar power advocacy, and Energy Efficient West Virginia — said previously that they believe the RFP “is a sham that is rigged to get the parent company’s preferred outcome.”
 
Which brings Dooley to why she came to the Capitol. “How is what FirstEnergy is trying to do any different than the bailouts we saw during the Bush administration and the Obama administration? They want the average utility customers that have no choice about what they do — where they purchase their power from — they want to force them to bail out the bad decisions of their CEOs.”

We feel like the Public Service Commission, if they look at it fairly, they’re going to see this isn’t a good decision for ratepayers; this doesn’t make any sense.
— Emmett Pepper, executive director of Energy Efficient West Virginia

Displaced coal miners could see a rate increase if this goes through, she said.
 
Under the government-created monopoly system, she said, every capital investment leads to a guaranteed profit, even a bad investment. “We are incentivizing failure.”
 
The monopoly system needs to evolve, Dooley said. States should remove regulatory barriers, allow third-party sales and leasing “and more of a free market aspect. … You should have the right to generate power on your private property and be able to sell it to your neighbor.”
 
Ireland, program director of WV SUN, said they believe Mon Power will come before the Public Service Commission with its plan in March, so they came to the Capitol hoping to educate legislators before that.
 
The coalition hopes the PSC will hold public hearings about the purchase across Mon Power territory, not just in Charleston, she said.
 
Pepper, executive director of Energy Efficient West Virginia, said, “We feel like the Public Service Commission, if they look at it fairly, they’re going to see this isn’t a good decision for ratepayers; this doesn’t make any sense.”
 
Ireland said that West Virginians for Energy Freedom is planning several public meetings about the possible deal across north-central West Virginia and the Eastern Panhandle.
 
Mon Power responds
Mon Power spokesman Todd Meyers offered these comments via email.
 
“The independent consultant continues to evaluate the responses to the RFPs received earlier this month. When that evaluation is complete, the firm will offer its recommendation to Mon Power as to which option would best resolve a projected capacity shortfall. At this point, there is no new development.”
 
Repeating some earlier comments, he said, “It comes as no surprise that different groups and individuals with different perspectives hold varying points of view on this critical and complex issue. Mon Power’s goal through the RFP process is to help identify possible resources necessary to meet future generation supply and capacity obligations in a cost-effective, prudent and reliable manner.”
 
He added, “We believe that our RFP process is competitive, and we are confident that the results will show that. Rather than speculate on outcomes, we will let the RFP process play itself out.
 
“Mon Power will need to seek state and federal regulatory approval for whatever proposal or proposals are identified through the RFP process as best to resolve Mon Power’s projected capacity shortfall,” he concluded. “The recommended option or options would be subject to thorough scrutiny during public regulatory proceedings conducted by both the Public Service Commission of West Virginia and the Federal Energy Regulatory Commission.”

(Reprinted with permission from The Dominion Post; published Feb. 27, 2017)