By Rory D. Sweeney

Blocked by regulators from moving its ailing coal-fired Pleasants Power Station into the rate base of a subsidiary, FirstEnergy announced Friday it will shut the plant down instead. The company said in a news release that the 1,300-MW plant in Willow Island, W.Va., will be sold or closed on Jan. 1, 2019.

The plant has been at the center of a conflict between the company and state consumer advocates since Monongahela Power, a regulated FirstEnergy subsidiary, filed a plan in March 2017 seeking approval to acquire the station from another subsidiary, Allegheny Energy Supply. Mon Power selected the plant after issuing a request for proposals for generation.

FERC denied the request in January, ruling that the plant’s selection resulted from an “overly narrow” solicitation that failed to consider competing resources. (See FERC Blocks FirstEnergy Sale of Merchant Plant to Affiliate.)

Soon thereafter, the West Virginia Public Service Commission approved the sale, but with restrictions that FirstEnergy felt were too onerous to proceed.

“Those conditions, combined with the FERC rejection, make the proposed transfer unworkable,” the news release said.

FirstEnergy CEO Charles Jones said the company would continue to look for a buyer while it prepares for deactivation. The closure will affect 190 jobs, according to the release. Following the closure, the company will control 14,795 MW of generation from coal, nuclear, natural gas and renewables across Ohio, Pennsylvania, West Virginia, New Jersey, Virginia and Illinois.

The transfer to Mon Power was one of many avenues FirstEnergy has tried to offload its merchant generation. Jones has warned that its competitive generation subsidiary, FirstEnergy Solutions, will likely go bankrupt and has repeatedly confirmed plans to return FirstEnergy to regulated operations, where its investments will receive defined rates of return. (See FirstEnergy Selling Merchant Fleet Despite NOPR.)

PJM spokesman Ray Dotter on Monday said it’s “way too soon to be able to say” whether Pleasants would be offered a reliability-must-run contract. “First, the reliability analysis must be completed. If the analysis indicates reliability issues, the owner could be requested to consider staying online until transmission upgrades were completed. If the owner agrees, it would go to the FERC to request an RMR rate.”

Ex Parte Controversy

FERC’s Jan. 12 ruling blocking the plant sale came after Commissioner Neil Chatterjee reported that lawyer William S. Scherman attempted to privately lobby him on FirstEnergy’s behalf.

Chatterjee said Scherman called him the day before the ruling “indicating his concern that the commission would shortly issue an order adverse to the interests of Monongahela Power.”

FERC Chairman Kevin McIntyre declined to say last month whether the commission would investigate who may have leaked information on the order to Scherman, who has represented FirstEnergy in the past. McIntyre called Scherman “a good friend” and “a terrific lawyer.” (See McIntyre: Won’t Commit to Probe Leak to ‘Good Friend’.)

At a press conference following last week’s commission meeting, McIntyre told reporters he had spoken with FERC General Counsel James Danly about the matter.

“I directed our general counsel to take the matter up with our designated agency ethics official to help us with two things,” McIntyre said. “No. 1, to ensure that our annual ethics training properly address the issue of ex parte communication restrictions. Second, to ensure that it properly address the very important principle of ensuring no improper sharing of nonpublic information with regard to work in the commission. Those steps have been taken. I’m confident that they’re the right steps.”

Asked if it sent the right message for him to call Scherman a “friend,” McIntyre responded: “It wasn’t to send any signal along those lines. Really, just to ensure that our systems are properly functioning. I’m confident that they did in fact function properly.”

Michael Brooks contributed to this article.