FirstEnergy Corp. reached a settlement last week in a controversial bid to shift a coal-fired generator from its unregulated subsidiary to regulated utility Monongahela Power, but a consumer group says the reduced price is still a bad deal for ratepayers.
Under the settlement, Mon Power ratepayers would pay Allegheny Energy Supply Company about $800 million for the 80% of the 1,984 MW Harrison plant it doesn’t already own, a reduction from AE’s original asking price of $1.1 billion. The revised deal was signed by the staff of the West Virginia Public Service Commission, the Consumer Advocate Division, the West Virginia Energy Users Group and several trade unions.
FirstEnergy said the deal will provide rate stability by shielding Mon Power customers from “unpredictable spot market prices.” Residential customers would receive a 1.5% rate cut, the company said.
But the West Virginia Citizen Action Group filed a challenge to the settlement Friday, saying the purchase price is still far more than the $554 million value that Allegheny Energy assigned to Harrison before the company’s acquisition by FE in 2011. The acquisition also would leave Mon Power dependent on Harrison and a second coal generator — the 1,107 MW Fort Martin station, which was built five years before Harrison — for 90% of its power.
“West Virginia rate payers will be stuck with obsolete, highly expensive coal-fired electricity long after the market has moved on, thereby locking an already burdened industrial base into the least competitive fuel source on the planet,” CAG’s attorney wrote. The group said it would be cheaper and less risky for ratepayers to purchase power from the PJM market. (See: Natural Gas Group Seeks Voice in West Virginia Coal Plant Acquisition)
On July 31, Virginia regulators cited a lack of fuel diversity for rejecting AEP’s request to transfer a coal-fired plant from an unregulated subsidiary to its Appalachian Power utility.
Byron Harris, director of the West Virginia state Consumer Advocate, acknowledged that the FirstEnergy settlement did not give his office all that it sought. “Any settlement is by its nature a compromise,” he told The State Journal. “There are what we believe are benefits in the settlement.”
The West Virginia commission yesterday ordered parties in the case to agree by Thursday on a hearing date to review the settlement.
More: StopPATH WV, Daily Mail
