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    PSC Consumer Advocate Division witness recommendation that Mon Power pursue buying Pleasants Power Station draws criticism


    November 18, 2022 - Mike Tony, The Charleston Gazette-Mail, W.Va.

     

      Nov. 18—West Virginia legislators bailed out the Pleasants Power Station in 2019 by approving an estimated $12.5 million in annual tax breaks for the financially struggling coal-fired plant in Pleasants County.

      Earlier this year, electric power producer Energy Harbor announced that it plans to sell or deactivate the 42-year-old plant in 2023.

      Now, a witness for the independent arm of the West Virginia Public Service Commission tasked with representing ratepayers' interests is recommending that Mon Power consider buying the plant in a case before the commission in which the company is proposing a double-digit-percent rate increase.

      Opponents of the recommendation say it's an irresponsible corporate bailout doubling down on coal in a state that has clung to it amid the state's escalating electricity prices and scant energy efficiency options compared with other states that have embraced renewables much faster.

      The Public Service Commission's Consumer Advocate Division filed testimony from coal procurement expert Emily Medine on Monday recommending that Mon Power pursue buying the Pleasants Power Station and then consider closing its Fort Martin Power Station upon acquiring the Pleasants plant.

      Medine, of Virginia-based Energy Ventures Analysis Inc., testified that the Pleasants plant is equipped with emissions control technology that the Fort Martin Power Station in Monongalia County lacks and is in a better location for delivery of West Virginia coal.

      In September, the Public Service Commission approved a rate hike increase requested by Mon Power and Potomac Edison, subsidiaries of Akron, Ohio-headquartered FirstEnergy, that covered federally required environmental upgrades to keep the Fort Martin plant operating through its anticipated 2035 retirement date.

      In the case pending before the commission, Mon Power and Potomac Edison have proposed rates to cover their fuel costs that would increase the monthly bill for the average residential customer using 1,000 kilowatt-hours per month by 9.6%, from $115.05 to $126.10. The companies have proposed an $183.7 million increase in its Expanded Net Energy Cost rates — the portion of a bill that includes expenses utilities pay to buy power or fuel to generate electricity.

      Energy Harbor announced in March that it had filed a deactivation notice for the 1,368-megawatt Pleasants Power Station in Willow Island, which will continue normal operations, along with two plants in Ohio, until June 2023.

      Known as FirstEnergy Solutions prior to its emergence from Chapter 11 bankruptcy in 2020, Energy Harbor said the closures are required steps as part of a transition to carbon-free energy.

      Energy Harbor spokesman Jason Copsey declined to say if Energy Harbor plans to close or sell the units and what its time frame is for making a decision.

      Energy Efficient West Virginia policy director Emmett Pepper blasted the Consumer Advocate Division for offering witness testimony endorsing a Mon Power purchase of the Pleasants plant.

      "The government should not be forcing us to pay to keep these expensive power plants online when the plants can't otherwise compete," Pepper said in a statement.

      James Van Nostrand, director of the Center for Energy and Sustainable Development at the West Virginia University College of Law, sees the Consumer Advocate Division-offered testimony as embracing trading in one coal plant for another. That's a problem because coal has become an increasingly cost-ineffective way to generate electricity, Van Nostrand and other ratepayer advocates argue.

      "There is no one protecting the consumer at the PSC," Van Nostrand said.

      A 2020 analysis from the financial advisory firm Lazard estimated the ongoing cost of a new solar energy project is $24 to $32 per megawatt hour, $10 to $16 less per megawatt hour than the cost to operate an existing coal-fired power plant.

      Nearly two-thirds of total renewable power generation added last year had lower costs than the cheapest fossil fuel option, according to a report last year from the International Renewable Energy Agency, a global intergovernmental agency that supports countries in energy transitions.

      West Virginia electric bills have ballooned as the state has clung to coal for the vast majority of its electricity, even as other states increasingly embrace alternatives.

      State ratepayers faced a 90% climb in average residential electricity retail price from 2005 to 2020, per Energy Information Administration data. Only Michigan had a greater increase by percentage.

      In 2020, coal-fired electric power plants accounted for 88% of West Virginia's electricity net generation, according to the Energy Information Administration. That clip is roughly quadruple the national percentage.

      Van Nostrand contended that issues raised by Medine in her testimony — high and rising allowance prices for nitrogen oxides, supply chain issues and unpredictable coal prices — would be best addressed by avoiding coal plants and aggressively moving toward nonfossil-fuel resources.

      Medine doesn't examine renewable energy options in her testimony.

      "Her testimony favors the coal industry, not consumers," Van Nostrand said.

      Consumer Advocate Division director Robert Williams defended Medine's testimony in an email, noting that the division has requested that Mon Power and Potomac Edison consider increasing the levels of coal inventories they attempt to keep on the ground at the plants to operate them more and limit Expanded Net Energy Cost under-recoveries passed through to ratepayers.

      The Public Service Commission rejected a request in December from consumer and energy efficiency groups to direct Mon Power and Potomac Edison to evaluate the potential for adding energy efficiency programs that serve the companies' low-income ratepayers and provide customers prompt access to multi-year energy usage data.

      That rejection came in a case in which the commission approved a $19.5 million annual increase in Expanded Net Energy Cost recovery, representing a 1.5% hike in total rates.

      "Excuse after excuse is given as to why the rates keep going up, but we know that in places that use the free market and it's easier for people to help address their own power needs, the rates don't go up so quickly," Pepper said.

      In the case pending before the commission, the agency's staff has recommended rates that would result in a rate increase of $10.95 per month, or 9.52%, for the average residential customer using 1,000 kilowatt-hours.

      Mike Tony covers energy and the environment. He can be reached at 304-348-1236 or mtony@hdmediallc

      .com. Follow @Mike__Tony on Twitter.

      ___

      (c)2022 The Charleston Gazette (Charleston, W.Va.)

      Visit The Charleston Gazette (Charleston, W.Va.) at www.wvgazette.com

      Distributed by Tribune Content Agency, LLC.

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