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

WV4EF FirstEnergy evidentiary hearing Public Service Commission West Virginia

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...

The FirstEnergy Bailout: Risky Business for WV Ratepayers

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By JOHN JACOBS

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Jacobs is a lifelong West Virginia resident, manufacturer and exporter of fine hardwood veneers (retired) and international markets specialist. "I pay for utilities the same way you do," he says.

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FirstEnergy Corp. came to West Virginia late, at the top of the market for coal-fired electricity generators and bought its way in by paying too much for now antiquated money-losing assets. FirstEnergy reported losses of over $6 billion in 2016 in a market where coal, its primary fuel, is dirt cheap.

Without a bailout prospects are grim. FirstEnergy's survival depends, not on earnings which will be years in coming, if at all, but on continued access to credit markets. Therefore, costs born and bonds guaranteed by West Virginia's credit-worthy ratepayers must seem rather attractive – in the corporate suites. On the other hand, West Virginians themselves may see that a little differently.

The Corporate Lay of Land
FirstEnergy (NYSE: FE), headquartered in Akron, is a holding company that owns and operates 10 subsidiaries including Allegheny Energy Supply in Ohio, along with Monongahela Power and Potomac Edison, which operate in West Virginia. Mon Power and Potomac Edison filed an application in March to purchase Pleasants Power Station from Allegheny Energy Supply for $195 million. Pleasants Power Station is a coal-fired generating plant near St. Mary's, WV, that opened in 1979.

Keys to Understanding the Deal
FirstEnergy CEO Charles E. Jones has been clear about the need to exit deregulated markets during investor conferences.

  • Electricity rates in Ohio are deregulated. FE's subsidiary Allegheny Energy Supply (AES) sells electricity into the grid, PJM Interconnection (PJM), which buys electricity at lowest bid.  If sales do not cover costs shareholders suffer.
  • Electricity rates in West Virginia are regulated. FE's subsidiaries Mon Power and Potomac Edison sell electricity to PJM and purchase electricity back from PJM to meet customers' needs. Customer rates are established by the Public Service Commission (PSC) to cover all costs, ensure reliable electric supply, and provide a rate of return to company shareholders; today, 9.9%.
  • Natural gas and horizontal drilling have revolutionized the cost of electric power generation. In 2008, over 50% of electricity was generated by coal. By 2016 that was down to 30% and gas up to 34%.
    • Utility sized wind and solar generation are competitive now and their prospects are even better.
    • The cost of wind energy has declined 66% since 2009.
    • The cost of utility sized solar energy has declined 85% since 2009.
  • FirstEnergy Solutions (the competitive markets subsidiary) medium and long bonds are trading at distressed levels; 40% of par. Bonds guaranteed by WV ratepayers should be expected to do better.

FirstEnergy’s Solution
The company wants to transfer risk to West Virginia ratepayers. This is not an arm's length transaction in which each company can negotiate a mutually beneficial agreement. All three FirstEnergy subsidiaries must comply with a single larger corporate objective. Nor is it a paper transaction in which assets are transferred from one division to another.

This is a purchase in which Mon Power and Potomac Edison will finance the purchase from another FE subsidiary. WV ratepayers will be responsible for that financing as well as for operational costs, improvements, and a guaranteed return to FirstEnergy shareholders and investors.

  • Mon Power gets a fixed asset (plant) and a liability (debt).
  • Allegheny gets a current asset (cash) and liquidates a fixed asset (plant).
  • FirstEnergy gets $195 million of borrowed money for which WV ratepayers are responsible.
  • WV ratepayers get a $195 million continuing financial obligation (a long-term liability) and will pay expenses (current liabilities) plus a return on capital for an otherwise money-losing enterprise and a weak 16-month promise which appears to be premised on unrealistic short-term projections ignoring the higher future costs of maintaining and operating an aging facility.

A Case of Deja Vu
In a nearly identical 2013 sale Mon Power acquired Harrison Power Station for $1.2 billion. The Harrison transaction was overvalued by $578 million (called an acquisition adjustment). At the time, the addition of that 1,476 MW to Mon Power’s generation portfolio was said to be necessary and would be “more than enough to meet its 2026 projection of need.” The companies' analysis concluded that acquiring Harrison would be cheaper than buying in the market, building new capacity, converting existing stations to use other fuels, or promoting efficiency. 

Because of the Harrison deal:

  • Our rates went up.
  • From October 2013 to June 2016, WV ratepayers have paid an additional $160 million above what that electricity would have cost on the spot market.
  • WV ratepayers assumed an ongoing responsibility to service $858 million in new debt.

FirstEnergy’s chief nuclear officer Sam Belcher said, “Our plants have been losing money. We’ve continued to operate them at a loss. But, at some point, those economics don’t make sense.” He's right. But also, at some point, it doesn't make sense for WV ratepayers to continue to absorb FirstEnergy losses.

Risky business. Fool me once, shame on you. Fool me twice, shame on me!

Disruptive technologies abound
FirstEnergy’s business model is busted… and it's turtles all the way down. The coal industry is in a depression. Our coal miners are broke, employees are out of work, pensions and healthcare are on the dole, and the tax revenues which would support that – all gone. Companies who have been reliant on the coal industry, like FirstEnergy, are going to find things difficult. Before the coal industry gets back on its feet energy markets will be transformed.

West Virginia, always overly reliant on coal, must face those realities too. Perhaps worse than the immediate economic consequence of a FirstEnergy bailout is an anti-competitive subsidy to aging technology which delays adoption of the cleaner more efficient energy that we've wanted since the 1960's and the negative repercussions a bailout would be to the development of a more diversified more resilient economy.

West Virginia has become the largest producer of shale gas in the country. Already, there’s a vision to transform Chemical Valley into Petrochemical Valley with ethane storage and distribution hubs. Those may be pipe dreams, and certainly, there will be associated problems. Importantly, the trend toward renewables, wind and solar, is more promising still. We are almost completely in the dark as to those possibilities. Major companies like Amazon and Google are insisting on their use. These changes will be transformative to our economy.

Opportunity is at our feet, but we must reach for it. It will not fall into our laps. We can be assured nothing good will happen if we remain constrained by old thinking and if the investment is limited by anti-competitive policy or the need to service unproductive debt. The danger is finding ourselves in investment limbo as the business climate is perceived as being too late for coal and too soon for alternatives.

FirstEnergy is unprepared for the transition taking place in energy markets. West Virginia will benefit more from having local utilities with strong balance sheets able to adapt to and prosper from the new realities we face. A FirstEnergy bailout in which West Virginia is used as a dumping ground for distressed assets works counter to those objectives and is not in the public interest. It's a move in the wrong direction.

Fax The PSC Day 2: Keep the protest going strong

FAX the PSC flag

As of noon today, according to the PSC's website, 1,750 people have registered their opposition to FirstEnergy Corp.'s latest bailout attempt with the sale of the Pleasants Power Station.  The protests arrived in letters, faxes, petitions, and emails. 

And 42 people have registered their support. 

Through these protests and the recent Public Hearings, the commissioners are getting the message loud and clear: West Virginians are tired of FirstEnergy's bids for corporate welfare.

If you haven't submitted comments yet, join us Wednesday, Sept. 20, from 12:01 a.m. to 11:59 p.m. for our second Fax The PSC Day! If you haven't submitted comments yet, here's your chance.

Click here to use our Fax The PSC tool on your phone, laptop or computer. Please note: If you've already used our Fax tool, you will not be able to use it again. Your protest has been registered.

There's a pre-written letter but we encourage you to include your objections and concerns. If you have already submitted a letter, fax, petition or email, you're part of the 1,750 who have already spoken up.

If you have any issues or have a question, click here to email us!

Fax The PSC now and ask them to vote NO on FirstEnergy's bad deal for Mon Power and Potomac Edison customers. 

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.

Updates: Op/Ed in The Parkersburg News and Sentinel; hearing details

No Bailout For FirstEnergy Red

William Ambrose of Parkersburg delivered a strong Op/Ed in Sunday's issue of The Parkersburg News and Sentinel against FirstEnergy Corp.'s corporate bailout attempt with the Pleasants power plant deal before the PSC. Ambrose is a retired surveyor and founding member of Mid-Ohio Valley Climate Action, a member of West Virginians For Energy Freedom coalition. Below are a few excerpts from his excellent piece on FirstEnergy's bad deal for West Virginians. Click here to read the full commentary and leave a comment if you're so inclined (Tip: If the Google survey pops up, scroll to the bottom of it and click "Skip survey").

"FirstEnergy’s rationale for the sale is a bunch of high-minded double talk about how it will benefit energy consumers. Once you understand the issues, however, it becomes clear it is actually a cynical ploy to bail out a non-competitive drag on their portfolio with a hefty subsidy forced onto their customers."

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"FirstEnergy knows its cost saving argument can’t withstand scrutiny. They’re hoping the PSC will swallow their assertion that they’re in the beginning of a capacity shortfall that will peak in 2027 and require Pleasants to shore it up."

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"FirstEnergy is hoping this sale gets connected to “war on coal “ hysteria in enough people’s minds to obscure what’s really happening: A shameless, predatory corporate bailout."

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Click here to read a pithy Letter To The Editor that also published in Sunday's News and Sentinel.

Join us Wednesday at the PSC Public Hearing in Parkersburg. West Virginians For Energy Freedom is holding a pre-rally hearing at 5:30 p.m. outside the Parkersburg Municipal Building. Click here for more information on the rally and the hearing. 

Wear dark blue to demonstrate your opposition to FirstEnergy's bailout attempt. Stop by our table for a "No WV Bailout sticker," talking points and more. Got a question? Click here to email us.