Company: Pleasants Power Station deal off
PARKERSBURG — A decision not to proceed with the sale of the Pleasants Power Station was a win for consumers, the head of an opposing coalition said on Tuesday.
“It’s definitely a big victory for West Virginia rate payers,” said Emmett Pepper, executive director of Energy Efficient West Virginia.
FirstEnergy companies on Monday informed the West Virginia Public Service Commission they will neither accept the commission’s conditions for the purchase of the Pleasants Power Station nor seek a rehearing with the Federal Energy Regulatory Commission that rejected the deal on Jan. 12.
Allegheny Energy Supply Co. had planned to sell the Pleasants facility to Monongahela Power and Potomac Edison, all subsidiaries of FirstEnergy Corp., for $195 million. The sale would have placed the facility into the regulated market in West Virginia where it would have been guaranteed a profit.
On Jan. 26, the Public Service Commission approved the sale with the conditions that imposed limits on the costs to customers, recovery of closing costs if the plant is retired early and costs related to prior operations of the plant or problems with an impoundment.
The utilities have decided against a request for a rehearing with the Energy Regulatory Commission and will not accept the conditions from the Public Service Commission, Gary A. Jack, a senior corporate counsel for the utility companies, said in a letter to the commission on Monday.
The conditions “would result in Mon Power assuming exposure and significant commodity risk, which is inconsistent with FirstEnergy’s announced corporate strategy,” the letter said.
“Therefore the asset purchase agreement between the companies and Allegheny Energy Supply Co. LLC will be terminated in accordance with its terms and the proposed transaction will not be consummated,” the letter said. “The companies do not believe that the commission’s requirements for them, to file recalculated revenue requirements, proposed tariff sheets and indemnity agreements within 30 days of the date of order or by Monday, Feb. 26, are needed in light of these circumstances.”
“While we are disappointed with this outcome, we are very appreciative of the hard work and dedicated efforts by our employees, community and business leaders and other stakeholders to try to bring the plan to fruition,” First Energy spokesman Todd Meyers said.
The sale was too expensive for consumers and would have led to rate increases, the main issues the coalition had with the deal, Pepper said.
“This was a bad deal,” Pepper said. “This was a good result.”
Earlier on Monday morning, the West Virginia Citizens Action Group and West Virginia Solar United Neighborhoods petitioned the Public Service Commission to reconsider its Jan. 26 order.
Reconsideration is warranted for three reasons, that Mon Power and Potomac Edison don’t need to purchase a power plant, the order needs to be clarified so consumers are protected from excess costs and the commission should modify and clarify the conditions so customers are protected from the costs and liabilities from the McElroy’s Run Impoundment and Dam in Pleasants County, the petition said.
The goal is to keep the plant, which employs more than 200 people, in operation, Jody Murphy, executive director of the Pleasants Area Chamber of Commerce, said. FirstEnergy has three options, close the plant, operate as is or sell it, he said.
The plant is coal-fired, but has had the latest technology installed to more cleanly burn the fuel, he said.
“Obviously we want to see it open and operational,” Murphy said.
Nothing will change for customers with the decision, Meyers said. Electricity will continue to be produced, he said.
“The lights are still going to stay on,” Meyers said.
The company, which reviewed both the state and federal orders, will continue to evaluate other options for the Pleasants Station, Meyers said.
“We have not made any final decisions or announcements concerning the future of our competitive generation plants, including whether they will be sold or closed,” he said.