Sep. 14—West Virginia utility regulators have approved a rate hike request from FirstEnergy subsidiaries to cover environmental upgrades federally required for long-term operations at two in-state coal-fired power plants.
The state Public Service Commission has signed off on a settlement agreement between its staff, company subsidiaries Mon Power and Potomac Edison, the West Virginia Coal Association and other parties for projected rate increases of 0.4% in 2024, 1.3% in 2025 and 1.8% in 2026.
Under the agreement approved Monday, those rate hikes will be applied to a surcharge for compliance with regulations based on the performance and costs of demonstrated wastewater control and treatment technologies.
The estimate rate increases for the average residential customer will be 49 cents per month in 2024, $1.43 per month in 2025 and $1.97 per month in 2026, according to FirstEnergy spokesman Will Boye.
The upgrades are required to keep the Fort Martin Power Station, in Maidsville, and the Harrison Power Station, in Haywood, operating until their anticipated retirement dates of 2035 and 2040, respectively.
The companies' projected capital investment for the upgrades is $142 million.
The request was filed by Mon Power and Potomac Edison in December to meet a 2025 compliance deadline for wastewater control and treatment improvements.
The companies settled last month with the commission's staff, the Consumer Advocate Division, the West Virginia Energy Users Group (a group of large industrial users), the West Virginia Coal Association and Longview Power LLC.
"These projects are necessary to comply with environmental laws and for the plants to continue operating in a cleaner way into the next decade for the benefit of West Virginia customers," Boye said in an email, repeating his response to last month's settlement.
Coal Association president Chris Hamilton applauded the Public Service Commission's approval of the settlement, noting that it will allow the plants to keep operating.
"This is great news for northern West Virginia's economy and the thousands of West Virginians employed in and around the plant," Hamilton said in an email.
The companies had cited estimates published by the West Virginia University Bureau of Business and Economic Research that the two plants generate local and state tax revenue totaling more than $45 million.
The Sierra Club opted not to sign on because it disagrees with the expenditures at a time when it says utilities should be transitioning to renewables or programs aimed at lowering electricity demand.
The Fort Martin and Harrison plants emitted a combined 16.7 million tons of carbon dioxide in 2020, according to U.S. Energy Information Administration data.
In November 2020, FirstEnergy pledged to achieve carbon neutrality by 2050.
Under the agreement, Mon Power and Potomac Edison will track revenue from the surcharge and project costs separately so that they can be compared to actual project costs. The companies will make an annual surcharge reconciliation filing requesting commission approval of rates that reflect the over-recovery or under-recovery of project costs so that only "actual and prudent" costs incurred are paid by customers.
Robert Williams, director of the Consumer Advocate Division, touted that provision in a defense of the agreement last month.
The Consumer Advocate Division is an independent arm of the Public Service Commission.
Mike Tony covers energy and the environment. He can be reached at 304-348-1236 or firstname.lastname@example.org. Follow @Mike__Tony on Twitter.
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