FERC Rejects Mon Power Request to Transfer Pleasants Power Plant

by Duane Nichols on January 18, 2018

Thanks to WV-CAD from WV Energy Freedom

Federal Energy Regulatory Commission denies FirstEnergy’s request to transfer Pleasants plant ownership

From the Press Release, West Virginians for Energy Freedom, January 13, 2018

A federal decision put an end to FirstEnergy Corp.’s bad deal for its West Virginia customers, thousands of whom had protested the company’s plan.

On January 12th, the Federal Energy Regulatory Commission (FERC) denied Ohio-based FirstEnergy’s request to transfer ownership of the Pleasants power plant to Mon Power, one of FirstEnergy’s regulated West Virginia utilities.

Under FirstEnergy’s proposal, customers of Mon Power and Potomac Edison, another FirstEnergy-owned utility in West Virginia, would have assumed all of the plant’s costs and financial risks, while FirstEnergy and its shareholders would receive a guaranteed revenue stream.

The Pleasants deal needed approval from both FERC and the Public Service Commission (PSC) of West Virginia. Solar United Neighbors of West Virginia and West Virginia Citizen Action Group, represented by Earthjustice, challenged FirstEnergy’s proposal before FERC and the PSC. At FERC, SUN-WV and WVCAG argued that customers would be forced to cross-subsidize FirstEnergy’s corporate affiliates.

In its decision, FERC denied FirstEnergy’s proposal because of cross-subsidy concerns. In particular, FERC found that Mon Power’s December 2016 request for proposals for additional power plant capacity – which SUN-WV and WVCAG argued was biased in favor of the Pleasants plant – failed to meet federal standards.

“FERC rejected the Pleasants sale because of the risk that it would result in improper cross-subsidization among subsidiaries of FirstEnergy,” said Cathy Kunkel, an energy analyst with the Institute for Energy Economics and Financial Analysis. “Indeed, FirstEnergy clearly orchestrated the sale of the Pleasants plant in order to shift costs and risk from a deregulated subsidiary onto the customers of Mon Power and Potomac Edison.”

Under this ruling, Mon Power would need to conduct a new RFP process if still seeks to acquire additional power generation capacity.

“In this decision, the FERC commissioners – four of whom were appointed by the current president – unanimously rejected a brazen attempt to force Mon Power and Potomac Edison customers to guarantee profits for FirstEnergy and its shareholders. This is a major victory for West Virginia customers, who would have likely paid hundreds of millions of dollars if FirstEnergy’s scheme had succeeded,” said Michael Soules, an Earthjustice attorney representing SUN-WV and WVCAG.

The Pleasants deal would have cost the average residential household approximately $69 each year for the next 15 years, according to expert testimony in the case before the PSC. In total that’s a net present value loss of $470 million that 530,000 Mon Power and Potomac Edison customers would be forced to bear.

FirstEnergy had expressed confidence to investors that the Pleasants sale would close in the first quarter of 2018. However, earlier this week, a lawyer for FirstEnergy, concerned that FERC might rule against the company, made an improper ex parte communication with one of the FERC commissioners in an attempt to influence the Commission’s decision.

“From its past history with the Harrison Plant sale to its sham RFP and misleading claims in the FERC and PSC cases on Pleasants, FirstEnergy has repeatedly demonstrated it prioritizes its bottom line and stockholders over consumers in West Virginia. This time, thankfully FERC stopped FirstEnergy in its tracks,” said Karan Ireland of West Virginians For Energy Freedom.

Read the FERC decision.

{ 3 comments… read them below or add one }

WV Consumer Advocate January 20, 2018 at 2:15 am


MOTION TO DISMISS, Submitted by the WV Consumer Advocate

RE: Proposal to Transfer Pleasants Power Plant, Case No. 17-0296-E-PC

Now comes the Consumer Advocate Division of the Public Service Commission of West Virginia (“CAD”), and respectfully moves the Commission to dismiss the Petition for Approval of a Generation Resource Transaction filed by Monongahela Power Company (“Mon Power”) and The Potomac Edison Company (“PE”) (jointly, “the Companies”) on March 7, 2017.

As the basis for its motion, the CAD states that the Order issued by the Federal Energy Regulatory Commission (“FERC”) on January 12, 2018, which denied the Companies’ request to transfer ownership of the Pleasants power plant to Mon Power, is dispositive of all issues currently pending before this Commission in this case. FERC rejected the Pleasants sale because of the risk that it would result in improper cross- subsidization among subsidiaries of FirstEnergy. Pursuant to the FERC Order, Mon Power must conduct a new RFP process if still seeks to acquire additional power generation capacity.


WAJR Radio February 7, 2018 at 12:12 pm

FirstEnergy withdraws bid to transfer ownership of Pleasants Power Plant


CHARLESTON, W.Va. — FirstEnergy Corp. is ending it’s bid to transfer ownership of the Pleasants Power Plant from Allegheny Energy Supply Co. to Monongahela Power Company and Potomac Edison.

The transfer was approved by the Public Service Commission last month, but with select conditions to protect ratepayers. The Federal Energy Regulatory Commission initially denied the first petition Jan. 12.

West Virginians for Energy Freedom released a statement Tuesday, which included the following:

“FirstEnergy pursued the transfer even though its West Virginia subsidiaries, which are regulated, did not need the plant to meet the needs of customers. If this scheme had succeeded, Mon Power and Potomac Edison customers would have assumed all of the plant’s costs and financial risks, while FirstEnergy and its shareholders would receive a guaranteed revenue stream.”

FirstEnergy said it would not appeal FERC’s decision. FirstEnergy also said in the letter it would not agree to the PSC’s conditions because it would result in Mon Power “assuming exposure and significant commodity risk, which is inconsistent with FirstEnergy’s announced corporate strategy.”

The transfer received condemnation in parts of North Central West Virginia, including in Morgantown, where the sitting City Council passed a resolution in opposition to the transfer.

FirstEnergy Spokesperson Todd Meyers previously told WAJR last March that the transfer would “simultaneously resolve a projected 10-year energy capacity shortfall and decrease bills for customers.”

West Virginians for Energy Freedom claimed the opposite, suggesting the deal would result in an increased cost of $69 per household for the next 15 years.


Daily Kos February 8, 2018 at 9:56 pm

Company fails to unload its coal-burner’s costs and financial risks onto West Virginia ratepayers

From an Article by Meteor Blades, The DailyKOS, February 8, 2018

A vigorous grassroots campaign has led to surrender and retreat in an Ohio-based energy company’s attempt to transfer the costs of its struggling coal-burning power plant onto West Virginia ratepayers.

Like many of the nation’s coal operators, FirstEnergy Corp., a backer of Pre*ident Trump’s pro-coal agenda, has been having financial difficulties as a consequence of the lower costs of electricity-generated by natural gas, solar, and wind.

One of those plants, Pleasants power station in Willow Island,West Virginia, is owned by FirstEnergy’s unregulated subsidiary Allegheny Energy Supply. FirstEnergy wanted to transfer it to Monongahela Power (Mon Power) and Potomac Edison, the company’s regulated utilities. This would place all the plant’s costs and financial risks on West Virginia ratepayers and guarantee the company a revenue stream from the plant’s operations. It would, in effect, amount to a subsidy from ratepayers. Energy consultants and environmental advocates put the long-term extra cost to customers at $470 million over 15 years. That would average about $69 a year for each customer.

But in a Monday letter to the state’s utility-regulating Public Service Commission, Mon Power and Potomac Edison said they would no longer seek the transfer.

The first blow came last month when the Federal Energy Regulatory Commission nixed the transfer. West Virginia’s Consumer Advocate Division had asked FERC to reject the deal, arguing that it was being sought so FirstEnergy “could avoid a further write off of its investment in an aging coal plant that is no longer economic in wholesale markets” and stick customers with the bill.

The second blow came as a result of the efforts of some 2,500 people, businesses, cities, and activists who passed municipal resolutions, filed protests letters, and attended three jam-packed public hearings. A coalition called the West Virginians For Energy Freedom fought the proposal from the get-go.

The PSC responded by okaying the transfer, but it placed conditions on it shielding customers from legal and financial risks. Those conditions were too much for the company to accept, hence this week’s letter saying the transfer was off.

Emmett Pepper, executive director of Energy Efficient West Virginia, said:

“This is a major win for the 530,000 Mon Power and Potomac Edison consumers in West Virginia. This deal was bad from the beginning and the extensive evidence presented at the PSC proceeding made clear that the proposed transfer would benefit FirstEnergy and hurt West Virginians struggling to survive in today’s economy.”

Laura Yokochi of the West Virginia Sierra Club chapter, an intervening party in the case, said in a written statement:

“The Pleasants Plant is better suited for the 19th century, not the 21st. We now have cutting-edge technologies, such as solar, wind, and energy efficiency, which should play a part in stabilizing the region’s economy and creating new employment opportunities. FirstEnergy must develop a fair transition plan for its workers and embrace the rapidly growing clean energy economy.”

SOURCE: https://www.dailykos.com/stories/2018/2/8/1739832/-Company-fails-to-unload-its-coal-burner-s-costs-and-financial-risks-onto-West-Virginia-ratepayers


Leave a Comment

Previous post:

Next post: