Power station sale approved by West Virginia despite federal block

CHARLESTON — In an order handed down Friday, the Public Service Commission of West Virginia authorized Monongahela Power Company and Potomac Edison (Mon Power/PE) to purchase the 1,300 MW Pleasants Power Station from its affiliate, Allegheny Energy Supply Company (AE Supply), subject to significant conditions.

However, a decision by the Federal Energy Regulatory Commission earlier this month may render the decision moot.

The PSC did not approve the companies’ petition as filed, but did approve a transfer with significant conditions to protect Mon Power and PE’s ratepayers.

Those conditions include requiring limitations on the costs to customers, limitations on the recovery of closing costs if the plant is retired early and protection against costs related to prior operations of the plant or problems with the McElroy’s Run Impoundment and Dam, the order said.

The companies, anticipating a growing capacity deficit over the next 10 years, had issued a request for proposals to solicit bids to reduce or eliminate the projected deficit. AE Supply, an affiliate of the companies and owner of Pleasants, was deemed to have submitted the most attractive proposal.

Intervenors in the case included the PSC’s Consumer Advocate Division; West Virginia Energy Users Group; Solar United Neighborhoods; West Virginia Citizen Action Group; Longview Power; the Sierra Club; ESC Harrison County Power LLC; ESC Brooke County Power LLC; the West Virginia Coal Association; and the West Virginia Business and Industry Counsel.

In order for the transfer to be implemented it must also be approved by the FERC, which issued an order on Jan. 12 denying the companies’ petition without prejudice. The time for filing a Motion for Reconsideration with FERC has not yet expired, the order said.

FirstEnergy spokesman Todd Meyers said the company received the PSC’s order Friday afternoon and will need to take time to thoroughly review the conditions and decide its course of action.

In addition, FirstEnergy is in the process of reviewing the FERC order and evaluating its options, he said.

“The order from the West Virginia PSC is another key factor in that review,” he said. “Both state and federal regulatory approvals are necessary for the transfer to occur. We believe the proposed Pleasants transaction offers benefits to our West Virginia customers, including reliable electricity and reduced electric rates, along with creating additional benefits for West Virginia’s economy,” Meyers said.

Jody Murphy, executive director of the Pleasants Area Chamber of Commerce, has expressed support for the proposal.

“Obviously, we are pleased the WVPSC approved the proposed transfer, however the decision does not override federal authority and FERC’s rejection of the deal. This is one, positive step, but more needs to be done. We remain hopeful, successful action will be taken to keep our plant operational for decades to come,” he said Friday.

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