Update

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.

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.

Evidentiary hearing: Day 3 recap

On Thursday, Sept. 28, the parties finished cross-examining FirstEnergy Corp.’s final two witnesses at the PSC in Charleston. Then the Ohio-based utility company’s legal team started cross-examining the intervenor witnesses.  

BIG TAKEAWAYS... Witnesses for the intervenors honed in on the same three themes:

  1. Mon Power and Potomac Edison does NOT need to purchase capacity
  2. The request for proposals issued for capacity was unreasonably narrow
  3. MP/PE’s economic analysis was biased in favor of Pleasants.
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They overestimated their need by many hundreds of megawatts.
— STEPHEN GABEL, a witness testifying Thursday on behalf of Longview Power

HISTORY SAYS OTHERWISE: While FirstEnergy’s attorney attempted to undermine the credibility of opposing witnesses, it was hard to ignore that MP/PE’s economic analysis predicting future revenues and operating performance for Pleasants is wildly out-of-line with the plant's history for the last 10 years.

'THEY DON'T NEED CAPACITY': Stephen Gabel, testifying on behalf of Longview Power, cut to the core of the case when he pointed out that -- rather than focusing on which plant MP/PE should buy -- the Commission should question whether the West Virginia-based FirstEnergy subsidiaries need any capacity at all. “They overestimated their need by many hundreds of megawatts,” he testified. “The whole premise of this case is that they need capacity. They don't need capacity.”

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POTENTIAL $$$$$$$$ LIABILITY IGNORED: The WV Consumer Advocate Division's witness Emily Medine, testifying on behalf of residential customers, questioned why MP/PE agreed to purchase the McElroy's Run coal waste impoundment, along with Pleasants. She testified she finds it very suspect that MP/PE didn't investigate the potential liability and risks associated with the storage site. She pointed out that the EPA classifies McElroy’s Run as "high hazard," meaning the failure of the impoundment would likely result in loss of life. The “high hazard” designation also makes it a potentially expensive liability that Mon Power and Potomac Edison customers would have to cover if disaster strikes.

I AM A FRIEND OF COAL BUT…: U.S. Secretary of Energy Rick Perry recently appointed Medine to the National Coal Council. FirstEnergy's attorney asked if Pleasants’ closure would break her heart. “Yes. But that doesn't mean a regulated utility should own that plant,” she said. When pressed, she responded: “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.”

FRIDAY, SEPT. 29: Last day of scheduled testimony… until Oct. 10, when David Schlissel, representing WV SUN and WV Citizen Action Group, will be cross-examined, along with three other witnesses who aren't going to be able to appear tomorrow.

WATCH IT LIVE: The PSC streams the hearing online. Click here to watch. You'll need Internet Explorer 6.0 and Windows Media Player. The hearings are not archived but a transcript will be entered in the docket in a few weeks.

Evidentiary Hearing: Day 2 recap

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FirstEnergy Corp. witnesses experienced another LONG day of cross-examining at the PSC. Commissioners are hearing testimony in the Ohio-based company's bailout attempt from West Virginia ratepayers. Much of the questioning focused on Mon Power's load forecast and the alleged need for the Pleasants plant, as well as the questioning of Mon Power's technical witnesses regarding the physical condition of the plant.

SURPLUS ENERGY UNTIL 2021 EXCEPT FOR 27 HOURS: FirstEnergy witness Bradley Eberts admitted 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. In other words, between 2018 and 2021, only 0.077% of the time will Mon Power and Potomac Edison need more energy. And that's all WITHOUT buying the Pleasants plant!

GROUNDWATER CONTAMINATION? NITROGEN OXIDES EMISSIONS? Kurt Leutheuser, who testified on the soundness of the plant including environmental risks, appeared to have no knowledge of groundwater contamination or existing lawsuits about Pleasants nitrogen oxides emissions.

INDUSTRY IMPACT: Mike Messer, chairman of West Virginia Energy Users Group (a coalition of large industrial customers), testified Linde LLC (his company) faces higher electricity costs in West Virginia than its competitors do in nearby states like Pennsylvania and Ohio. Messer expressed his concern that the Pleasants purchase would drive up rates even further.

TODAY: Possibly the last scheduled day of the hearing. Expect testimony from the intervenors except for David Schlissel, representing WV SUN and WV Citizen Action Group. Due to health concerns, Schlissel's testimony is rescheduled for the week of Oct. 9.

WATCH IT LIVE: The PSC streams the hearings online. Watch hereThe hearings, however, are not archived.

 There's still time to get involved

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...

Evidentiary hearing begins Tuesday in FirstEnergy's bailout attempt

The evidentiary hearing on FirstEnergy's bailout attempt begins at 9 a.m. Tuesday, Sept. 26, at the Public Service Commission building in Charleston. The hearings are scheduled through Thursday, Sept. 28. Click here to read a report from MetroNews.

Meanwhile...

Editorial: Pleasants Power Plant sale probably isn't good for consumers

"It is a complex issue, one made more muddy by (the) difference in laws governing some of the companies involved.... But here’s the bottom line: West Virginia residents should not have to pay additional money to improve FirstEnergy and its subsidiaries profit margins," wrote Executive Editor John Miller in The Exponent-Telegram on Sept. 12, 2017.

Click here to read the full editorial against the Pleasants power plant sale.

This is the first editorial in a daily newspaper against FirstEnergy Corp.'s bailout attempt, a strategy that started with the Harrison power plant sale in 2013. 

Click here to leave a comment in support of The Exponent-Telegram's stand against corporate welfare.

Thanks to The Exponent-Telegram for taking a stand for hard-working West Virginians.