The Register-Herald, Beckley, West Virginia

State News

May 17, 2013

Foes are lining up against sale of W.Va. power plant

CHARLESTON — Opposition is mounting to Mon Power’s proposed purchase of a coal-fired power plant in north-central West Virginia, a deal critics say is overvalued and would unfairly raise rates for consumers.

The Sierra Club of West Virginia announced Friday that it will protest the transaction Tuesday morning in Morgantown, where the parent company of both parties, Ohio-based FirstEnergy, will be holding its annual meeting.

“Citizens are speaking out because energy efficiency is one of those issues where the cost arguments, the jobs arguments and the environmental arguments are all on the same side,” said Jim Kotcon, the Sierra Club’s conservation chairman.   

In a deluge of more than 1,000 letters to the Public Service Commission, critics have complained the $1.1 billion purchase of the Harrison Power Station from sister company Allegheny Energy Supply would lock the utility into a system that relies too narrowly on coal.

They plan to transfer full ownership of the plant in Haywood to Mon Power, which currently owns only 20 percent.  

In exchange, Mon Power would sell its 8 percent share of the Pleasants Power station at Willow Island to AE Supply, giving that subsidiary 100 percent ownership.

Both companies are subsidiaries of Ohio-based FirstEnergy.

The PSC set hearings in Charleston for May 29-31. The deal would also require the approval of the Federal Energy Regulatory Commission.

FirstEnergy, completing what promised to be a lengthy response for the PSC Friday, says the transaction is good for the state and ensures a reliable power supply for many years to come.

The Harrison Power Station employs more than 200 workers and supports mining jobs. Mon Power has previously called it “one of the largest and cleanest coal-fired plants in the nation,” with nearly $1 billion invested in scrubbers that now remove 98 percent of the sulfur dioxide emissions.

But the Charleston Gazette  says opponents see the deal as shortsighted. They include the West Virginia Citizen Action Group and the West Virginia Energy Users Group, a coalition of industrial customers.

Energy consultant David Schlissel testified the transaction “would lock West Virginia ratepayers into decades of paying for an expensive large central station generating facility for at least 10 years.” It would also give Mon Power more capacity than it really needs, he said, with “almost no fuel diversity.”

“Nothing in the company’s portfolio provides a hedge against the risks associated with this near total dependence on a single fuel source,” Schlissel said.

West Virginia University law professor James VanNostrand also calls it a bad deal for customers.

In a blog hosted by the College of Law’s Center for Energy and Sustainable Development, he argued Mon Power is “substantially overpaying” for a plant it doesn’t need.

“The acquisition would preclude Mon Power from pursuing cheaper alternatives,” he wrote, “such as natural gas-fired generation, wholesale market purchases, and energy efficiency.”

The utilities are seeking a temporary transaction surcharge to cover the costs of the deal, and those surcharges would eventually become part of their new base rates. They say a typical residential customer using 1,000 kilowatt-hours per month would pay less than $1 more than last year’s monthly bill.  

Mon Power said it won’t proceed with the purchase if the surcharge is denied.

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