Press release

FirstEnergy Corp. drops bid to sell Pleasants plant

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In a notice filed Monday (Feb. 5) with the Public Service Commission of West Virginia, FirstEnergy Corp. stated that it will stop fighting to transfer ownership of the Pleasants power plant to Monongahela Power and Potomac Edison, FirstEnergy’s West Virginia utilities. This ends a hotly contested case where numerous groups and customers lined up in opposition to the deal.

This is a major win for the 530,000 Mon Power and Potomac Edison consumers in West Virginia.”
— Emmett Pepper of Energy Efficient West Virginia

For more than a year, Ohio-based FirstEnergy has been trying to transfer the Pleasants plant near Parkersburg, owned by FirstEnergy’s unregulated subsidiary Allegheny Energy Supply, to Mon Power and Potomac Edison. FirstEnergy pursued the transfer even though its West Virginia subsidiaries, which are regulated, did not need the plant to meet the needs of customers. If this scheme had succeeded, Mon Power and Potomac Edison customers would have assumed all of the plant’s costs and financial risks, while FirstEnergy and its shareholders would receive a guaranteed revenue stream.

“This is a major win for the 530,000 Mon Power and Potomac Edison consumers in West Virginia,” said Emmett Pepper, executive director of Energy Efficient West Virginia. “This deal was bad from the beginning and the extensive evidence presented at the PSC proceeding made clear that the proposed transfer would benefit FirstEnergy and hurt West Virginians struggling to survive in today’s economy.”

FirstEnergy’s announcement followed setbacks at both the Federal Energy Regulatory Commission (FERC) and the West Virginia PSC. On Jan. 12, FERC denied FirstEnergy’s request because of concerns that West Virginia customers would be forced to subsidize FirstEnergy’s unregulated business. And on Jan. 26, the PSC established several conditions aimed at protecting customers from financial and legal risks that FirstEnergy would have to meet if the transfer went forward. Solar United Neighbors of West Virginia and West Virginia Citizen Action Group, represented by Earthjustice, challenged FirstEnergy’s proposal at both FERC and the PSC.

This is proof that the average person can stand up to a corporation and make a difference.”
— Karan Ireland of Solar United Neighbors of West Virginia

In its letter Monday, FirstEnergy said it would not appeal FERC’s decision. FirstEnergy also said in the letter it would not agree to the PSC’s conditions because it would expose the company to unacceptable risks – the very risks FirstEnergy tried to force on customers through its proposal. “We were heartened by FERC’s decision and are thrilled to see FirstEnergy bail on its attempt to get corporate welfare from hard-working West Virginians,” said Karan Ireland of Solar United Neighbors of West Virginia. “This is proof that the average person can stand up to a corporation and make a difference.”

More than 2,500 people, businesses, nonprofits, and cities opposed the Pleasants sale by speaking at the PSC’s three public hearings, passing municipal resolutions, filing letters of protest with the PSC, writing letters to the editor, and signing petitions. West Virginians For Energy Freedom, a coalition of community members, local businesses, and public officials, have vigorously opposed the Pleasants deal from the beginning.

The Pleasants "sale" 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 Mon Power and Potomac Edison customers would have been forced to bear.

Schools, hospitals, and manufacturers in West Virginia would have expected Mon Power and Potomac Edison electric bills to increase more than $230 million over the next 15 years, according to a report by consultants RunnerStone, LLC in December. Solar United Neighbors of West Virginia asked RunnerStone to provide estimated impacts of the Pleasants transfer on schools (primary, secondary and colleges and universities), inpatient and outpatient hospitals, and manufacturers.

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.

FirstEnergy’s proposed Pleasants sale likely to cost WV ratepayers more than $400 million through 2032, expert says

Unless FirstEnergy Corp. agrees to bear the risks for losses, the Public Service Commission of West Virginia should reject the utility monopoly’s proposed sale of the Pleasants Power Station to FirstEnergy subsidiaries Monongahela Power and Potomac Edison, said David A. Schlissel, president of Schlissel Technical Consulting, in expert testimony submitted Friday, Aug. 25, 2017.

CLICK HERE TO READ THE TESTIMONY IN THE PUBLIC DOCKET.

Schlissel’s research concludes if the FirstEnergy subsidiaries acquire Pleasants, the purchase will likely cost ratepayers more than $400 million through 2032.

Mon Power and Potomac Edison’s analysis is driven by the extremely optimistic, unreasonable assumption that the future of energy market prices and production will be very different from the recent past, he testified.

Schlissel provided expert testimony on behalf of WV SUN and West Virginia Citizen Action Group, members of the West Virginians For Energy Freedom coalition.

The PSC’s proceedings are similar to a legal trial. Today, Aug. 25, is the deadline for WV SUN, WVCAG, and other intervening parties to submit testimony. There will be a hearing in late September at which witnesses will be cross-examined. Commissioners are expected to decide the case in mid-October.

“We are eager to share Schlissel’s findings and testimony with the consumers who will have to foot the bill for FirstEnergy’s corporate welfare if PSC Chairman Mike Albert and Commissioners Brooks McCabe and Renee Larrick approve the deal,” said Emmett Pepper, executive director of Energy Efficient West Virginia.

For nearly 45 years, Schlissel has served as a consultant, expert witness, and attorney on engineering and economic issues in the fields of energy and the environment.

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.

Other intervening parties include the Consumer Advocate Division of the PSC, the West Virginia Energy Users Group, Longview Power (owner of the Longview coal-fired power plant), the Sierra Club, Harrison County Power and Brooke County Power (owners of two planned natural gas-fired power plants).

Key conclusions from Schlissel’s expert testimony

  • Mon Power and Potomac Edison’s estimate of the economic impact of the purchase on ratepayers is flawed. Mon Power and Potomac Edison’s analysis is driven by the extremely optimistic, unreasonable assumption that the future will be very different (and much more favorable to the economics of coal-fired generation) than the recent past. If their assumptions were realistic, FirstEnergy subsidiary Allegheny Energy Supply wouldn’t be trying to sell the plant.
     
  • The proposed purchase of Pleasants would likely cost ratepayers over $400 million over the next 15 years. That is because the revenues that will be earned from selling Pleasants’ electricity on the regional electricity market will not be sufficient to cover the costs of owning and operating Pleasants, including a profit to FirstEnergy.
     
  • Mon Power and Potomac Edison do not need to buy another power plant. The companies have used a methodology that overstates their purported capacity shortfall by over 400 MW (more than a third of their alleged 2027 shortfall). There are only a few peak hours out of the year when customer demand is projected to exceed the amount of energy that can be produced at Mon Power’s plants, and Mon Power and Potomac Edison could rely on market purchases during those hours.
     
  • If Mon Power and Potomac Edison acquire Pleasants, they will generate 45% to 78% more electricity than their customers actually need over the next 15 years. This will leave customers exposed to the risk the companies will not be able to profitably sell this surplus energy on the market.
     
  • Schlissel recommends that the Public Service Commission reject the proposed transaction. If the Commission decides to approve the transaction, FirstEnergy – not Mon Power and Potomac Edison customers – should be required to bear the risk that the Pleasants acquisition turns out to be unprofitable.

 

Next steps in the PSC case: Public Hearings

The next major deadline is Sept. 6, the last day to serve discovery requests. Also on Sept. 6, the PSC will be in Parkersburg the first of three Public Comment Hearings around the state. West Virginians For Energy Freedom will host a pre-hearing rally outside the Parkersburg Municipal Building.

Public Hearings and pre-hearing rallies will be held Sept. 11 in Martinsburg and Sept. 12 in Morgantown. Click here for more information on the hearings and rallies.

“It is critical for Mon Power and Potomac Edison consumers to attend or speak at the Public Hearings so commissioners and FirstEnergy know that West Virginians are tired of out-of-state corporations pillaging the Mountain State,” said Karan Ireland, program director for WV SUN.

More key dates
Sept 18: Rebuttal testimony of companies to the direct testimony of other parties and rebuttal testimony of other parties to the direct testimony filed on Aug. 25, with work papers.
Sept. 26-28: Evidentiary hearing.
Oct. 12: Initial briefs.
Oct 19: Reply briefs.

PSC receives nearly 1,000 petitions against FirstEnergy’s Pleasants plan

The Energy Freedom Fighter, who stands up for West Virginians and battles corporate welfare, is making a special delivery to the PSC!

Posted by West Virginians For Energy Freedom on Tuesday, August 15, 2017

On Tuesday, Aug. 15, West Virginians For Energy Freedom members – along with a new superhero – delivered to the Public Service Commission of West Virginia nearly 1,000 petitions protesting FirstEnergy Corp.’s Pleasants Power Station sale.

The delivery was made to the PSC office in Charleston. Watch the Facebook Live video at right.

FirstEnergy, the Ohio-based parent company of Mon Power and Potomac Edison, seeks to transfer the Pleasants Plant to its Mon Power subsidiary from another FirstEnergy subsidiary. If approved by the PSC, costs will be passed on to Mon Power and Potomac Edison's West Virginia customers.

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.

The Energy Freedom Fighter, a superhero who stands up for West Virginians against out-of-state utility companies, presented petitions along with WV4EFcoalition members. The caped, masked crusader chose to remain silent during the delivery. “The signatures of hundreds and hundreds of West Virginians speaks volumes about opposition to the proposed sale,” said Karan Ireland, program director for WV Solar United Neighborhoods (WV SUN), a founding member of the coalition.

“West Virginians For Energy Freedom want to make sure Chairman Mike Albert and Commissioners Brooks McCabe and Renee Larrick are aware of the number of people who do not support FirstEnergy’s tactics,” said Ireland.

On March 15, WV SUN and West Virginia Citizen Action Group (WVCAG) filed a motion to intervene with the PSC over FirstEnergy’s proposed sale of the Pleasants plant. In early May, the groups also filed a protest against FirstEnergy with the Federal Energy Regulatory Commission (FERC). The Federal Power Act prohibits such transfers if they would result in a public utility inappropriately cross-subsidizing a corporate affiliate.

“The proposed Pleasants sale is purely a business maneuver to transfer ownership from a deregulated state like Ohio to a regulated state,” said Emmett Pepper, executive director of Energy Efficiency West Virginia, another founding member of the coalition. “And it’s a bad deal for consumers that is familiar to Mon Power and Potomac Edison consumers.”

In 2013, WV Public Service Commissioners Albert and Jon McKinney, approved FirstEnergy’s transfer of ownership of the Harrison power plant in Haywood to Mon Power. Commissioner Ryan Palmer was the lone vote against that transfer.

The Harrison sale has cost Mon Power and Potomac Edison customers more than $160 million, so far, according to industry analysts. “That FirstEnergy deal is fresh in people’s minds since they see it every month when they go to pay their power bill,” Pepper said.

Another part of West Virginians For Energy Freedom's mission is to give people tools to engage and have a voice in what happens to their money.

Along with the petition drive and a letter-writing campaign on the public hearing sites, the coalition added a Fax the PSC tool to its website (EnergyFreedomWV.org) to make it easy for people to send in comments for the public docket.

The fax machine is one of the four ways the PSC accepts public comments on a case. The Fax the PSC tool allows people to send a fax from their laptops and phones. "People tell us it's more convenient than navigating the PSC website to send an email and takes less time than mailing a letter,” Pepper said.

During the coalition’s first #FaxThePSC Day campaign Aug. 10, the PSC received 40 faxes protesting FirstEnergy.

Commissioners will hear from consumers at the PSC’s public hearings in Parkersburg on Sept. 6, Martinsburg, Sept. 11 and Morgantown, Sept. 12. “We want to pack the chambers so commissioners will hear and see the people who will be most affected by FirstEnergy’s bad deal,” said Ireland. West Virginians For Energy Freedom will hold rallies before the hearings.

And you can keep an eye out the Energy Freedom Fighter around the Mountain State. The consumer crusader will be at events, fairs, and festivals to raise awareness about the public hearings and get more signatures for the petitions.

WV coalition intervenes to stop FirstEnergy’s latest bailout

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CHARLESTON, WV – On March 15, 2017, WV Solar United Neighborhoods (WV SUN) and West Virginia Citizen Action Group (WVCAG) took action to prevent West Virginia residents and business owners from having to bail out Ohio-based FirstEnergy Corp. and its shareholders.

The groups filed a motion to intervene in a Public Service Commission (PSC) of West Virginia case where FirstEnergy’s West Virginia utilities – Mon Power and Potomac Edison – are trying to unload the Pleasants coal plant onto West Virginia electric customers.
 
Under FirstEnergy’s proposal, Mon Power 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.
 
FirstEnergy’s proposal comes after a lengthy effort to lay the foundation for this financial bailout. In late 2015, FirstEnergy filed a plan with the PSC that recommended the purchase of a coal plant to meet demand. WV SUN and WVCAG, represented by Earthjustice, challenged that plan’s assumptions, explaining that this was a thinly disguised attempt to pave the way for purchasing the Pleasants plant. Later, when Mon Power sought proposals to meet the power needs it identified, WV SUN and WVCAG, together with the Consumer Advocate Division, filed a letter with the PSC explaining how the flawed process was heavily skewed to favor the Pleasants plant.

"If this plant was such a good bet, then FirstEnergy would be putting its own money on the line, instead of asking the government to force ratepayers to gamble on it being a good deal," said Emmett Pepper, director of WVCAG's Energy Efficient West Virginia project. "Pleasants is currently part of a deregulated free market, but FirstEnergy wants to use its monopoly status in West Virginia to force its Mon Power and Potomac Edison customers to pay for this."

WV SUN and WVCAG are leading the recently formed coalition fighting the bailout – West Virginians For Energy Freedom. The coalition is comprised of economic and ratepayer advocacy groups, faith-based organizations, businesses, and elected officials. The coalition will hold a series of community meetings to discuss the bailout. The first is March 21 in Clarksburg. The next is March 28 in Morgantown.

Community Conversation set in Clarksburg on FirstEnergy transfer

West Virginians For Energy Freedom will hold the first in a series of Community Conversations on March 21, 2017, in Clarksburg to discuss FirstEnergy Corp.’s transfer of its power plant to its subsidiaries, Mon Power and Potomac Edison.

The transfer filed March 7, 2017, with the Public Service Commission of West Virginia would force Mon Power and Potomac Edison customers to pay for the plant's costs for the next several decades. FirstEnergy’s similar transfer of ownership of the Harrison Power Plant in 2013 has cost Mon Power and Potomac Edison customers more than $160 million, so far. (Read IEEFA's report on FirstEnergy's re-regulation strategy.)

Democracy For America

West Virginians For Energy Freedom’s first Community Conversation, hosted by North Central West Virginia Democracy For America, is 6-8 p.m. Tuesday, March 21, at The Gaston Caperton Center (Room 148), 501 W. Main St., Clarksburg, WV 26301. Doors open at 5:30 p.m. Refreshments will be provided.

“FirstEnergy, the Ohio-based utility giant that owns Mon Power and Potomac Edison, wants to offload the obsolete, uncompetitive Pleasants power plant onto the shoulders of its Mon Power and Potomac Edison customers,” said Karan Ireland of West Virginians For Energy Freedom, a coalition formed to oppose FirstEnergy’s plan. “This would fatten FirstEnergy’s bottom line and guarantee a return on investment for its shareholders.

 The Gaston Caperton Center in Clarksburg.

The Gaston Caperton Center in Clarksburg.

“We hope everyone from homeowners to business owners will attend to find out how this transfer will affect them,” said Ireland, who will lead the Community Conversation.

West Virginians for Energy Freedom will sponsor a series of public forums in Mon Power and Potomac Edison’s coverage area. The next Community Conversation is March 28 in Morgantown.

West Virginians For Energy Freedom launches coalition to fight FirstEnergy’s bailout scheme

Emmett Pepper of West Virginians For Energy Freedom

CHARLESTON, WV – On Tuesday, Jan. 31, a coalition of economic and ratepayer advocacy groups, faith-based organizations, businesses, and elected officials launched West Virginians For Energy Freedom, a coalition aimed at stopping FirstEnergy Corp.’s scheme to force West Virginia electricity customers to bail out an obsolete power plant.
 
FirstEnergy, the Ohio-based parent company of Mon Power and Potomac Edison, has long hinted at plans to have Mon Power purchase the Pleasants power plant from another FirstEnergy subsidiary. The scheme, if successful, would shift the plant’s costs onto Mon Power and Potomac Edison’s West Virginia customers. FirstEnergy’s scheme is now moving forward, and later this year Mon Power is expected to seek approval from the Public Service Commission of West Virginia (PSC) to buy Pleasants.

A similar transfer of ownership of the Harrison Power Plant in 2013 has cost Mon Power and Potomac Edison customers more than $160 million so far.
 
West Virginians For Energy Freedom members WV SUN and Energy Efficient West Virginia, joined by the WV Consumer Advocate Division, delivered a letter Jan. 31 to the PSC explaining how Mon Power's recent request for proposals is part of FirstEnergy’s plan to sell the Pleasants plant, so that Mon Power and Potomac Edison customers are forced to bear the plant’s financial risks. Click here for a copy of the letter

“We should not be responsible for bailing out a corporation like FirstEnergy. Compare the company’s executive salaries and the net worth of its shareholders with the income of the average West Virginian and tell me again how this deal makes sense?” said Karan Ireland, state director of WV SUN, during the coalition’s press conference Tuesday, Jan. 31, outside the PSC in Charleston, WV. “It doesn’t make sense for consumers, it doesn’t make sense for small businesses, and it doesn’t make sense for our state.”
 
"Mon Power and Potomac Edison customers have seen enough rate increases," said Emmett Pepper, executive director of Energy Efficient West Virginia. "FirstEnergy is bending over backwards to find a reason to force West Virginians to pay for this plant. We don't need the Pleasants Plant's energy, and it wouldn't be a good deal for customers, even if we did."
 
West Virginians For Energy Freedom includes individuals, organizations, businesses and officials who believe they should not have to bail out FirstEnergy Corp. and its shareholders.
 
During the press conference, The Rev. Jeffrey Allen of WV Council of Churches, a coalition member, said utility bills are one of the most frequent requests that come before faith-based and social service agencies as a need of those seeking assistance in the state. “Families can face dire circumstances when funds run low to pay utility bills," The Rev. Allen said. “It makes sense to us, then that power companies should seek to produce electricity at the lowest rate possible, because of the impact these rates can have on low-income families.”
 
Another West Virginians For Energy Freedom member agrees. “We need an energy policy that serves consumers, not cronies,” said Stephen Smith of WV Healthy Kids & Families Coalition.

Members of West Virginians For Energy Freedom includes:

  • Energy Efficient West Virginia
  • John Manchester, Mayor of Lewisburg
  • William A. Kawecki, Deputy Mayor of Morgantown
  • American Friends Service Committee – West Virginia
  • Solar Holler
  • West Virginia Alliance for Sustainable Families
  • West Virginia Center on Budget and Policy
  • West Virginia Citizen Action Group
  • West Virginia Council of Churches
  • WV Healthy Kids & Families Coalition
  • WV SUN

West Virginians For Energy Freedom plans to mobilize West Virginia residents, organizations, and businesses; conduct email/postcard/social media campaigns; and organize rallies to prevent FirstEnergy’s bailout.