Parties in Mon Power rate hike proposal case trade critiques of each others' ideas

Dec. 1—MORGANTOWN — The state Public Service Commission has received a new round of testimony regarding Mon Power and Potomac Edison's request to raise customer power rates.

It was a round of rebuttal testimony where the various parties responded to comments and criticisms leveled by other parties.

Mon Power and Potomac Edison are FirstEnergy sister companies serving most of northern West Virginia along with the Eastern Panhandle and western Maryland.

The companies project the rate hike would raise the average residential customer bill about $11.05 per month, from $115.05 to $126.10 — a 9.6 % increase. The total requested rate hike is $183.8 million and reflects a total 12.2 % hike for all customers, including commercial /industrial. This comes on top of a $94 million interim ENEC hike granted in May.

The case is called an ENEC — Expended Net Energy Cost — case to recover fuel, purchased power and transmission costs, and PJM regional energy grid participation costs (summarized as purchased power expenses) incurred to provide service to customers.

Company representative Raymond Valdes addressed a recommendation by the PSC's Consumer Advocate Division that the companies buy the Pleasants Power Station and close Fort Martin, located outside Morgantown.

He said that before agreeing to that, they would need to conduct a detailed analysis regarding its customer impact and long-term potential. "While the Companies are unfamiliar with the current condition of the Pleasants Power Plant, it could provide some benefits over Fort Martin including age, location, and pollution control equipment."

But there could also be risks, he said, such as Pleasants' condition and supply and delivery issues.

Company representative Mark Valach said they agree with CAD's recommendation that Fort Martin restore its low coal inventory levels. They would do this by using jumbo-sized barges instead of standard-size barges, which are in short supply. They are working to build an unloader that could handle the larger barges.

Valach disagreed with the contention from CAD and others that insufficient supplies led to lower-than-expected revenues at their coal-fired plants. The supply shortages were the result of market or environmental factors outside their control, including problems at the supply mines.

Longview Power, which operates a coal-fired power plant near Fort Martin, would like the companies to enter into a PPA — power purchase agreement — with Longview to buy Longview's power at a lower cost and sell for profit into the PJM grid.

Longview CEO Stephen Nelson in his rebuttal testimony objected to the CAD recommendation regarding the Pleasants plant.

Pleasants was commissioned in 1979, he said, and is entering the old-age portion of its life cycle, where maintenance and repair costs escalate. It also is less efficient than Longview, which can produce the same amount of energy as the companies' plants using 20 % less coal.

He also objected to CAD's asstertion that Pleasants is better situated than Fort Martin for receiving coal supplies. Longview and Fort Martin rely on the same rivers and barges to receive coal and use many of the same suppliers. Whatever slight advantage Pleasants may have isn't sufficient to motivate its current owner, Energy Harbor, to keep it open past June 2023, when it's slated to close.

He rejected CAD's suggestion that Pleasants could be acquired cheaply because Energy Harbor is closing it. "That is not a benefit. It is more like a big red flag."

Pleasants and Longview, he said, are both independently owned and can't pass along their costs to customers the way plants in regulated markets — Mon Power's Fort Martin and Harrison — can. If an independent producer concludes revenues won't cover costs, it closes the plant. "You should understand that to mean that Energy Harbor does not believe it is economic to keep Pleasants on line."

So if Mon Power and Potomac Energy don't think Fort Martin can operate economically, there are other options — such as a PPA with Longview, Nelson said. The companies should determine if Fort Martin can run economically and whether it should remain open or be replaced. But if the plants are uneconomical because of any company failures, they shouldn't be allowed to pass the costs to their customers.

Finally, energy consultant Anna Sommer spoke for Energy Efficient WV and two other consumer groups. She opposed both CAD's Pleasants proposal and Longview's PPA proposal.

PJM rules, she said, do not require Mon Power and Potomac Edison to own or contract for their entire energy capacity obligation to PJM, and they have plenty of energy capacity anyway. If they would need to buy some power, they shouldn't simply enter into a PPA with Longview, but put out an RFP to solicit bids from a wide range of proposals.

"A well designed RFP, " she said, "gives the companies the best opportunity to identify the most reasonable and lowest-cost sources of capacity and energy."

And the idea of buying Pleasants, she said, carries significant risks, which CAD described back in 2017 when Mon Power and Potomac Edison were trying to buy it from FirstEnergy sister Allegheny Energy.

An evidentiary hearing is set for this case on Dec. 8 ; and any approved changes would take effect Jan. 1.

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