January 4, 2023 - An order from the West Virginia Public Service Commission last week approving rate increases for two power companies also included a provision for those companies to evaluate the possible purchase of the Pleasants Power plant.
In an order issued Friday, the PSC approved a $91.9 million increase in the Expanded Net Energy Costs (ENEC) surcharge requested by FirstEnergy subsidiaries Monongalia Power Co. and Potomac Edison Co. The increase amounts to a 4.8 percent increase for residential customers, from $115 per month to nearly $120 per month for residential customers using on average 1,000 kilowatt hours per month.
The $91.9 million ENEC increase was nearly half of the companies’ original ENEC increase request of $183.8 million, which would have resulted in a monthly increase of bills for residential customers using 1,000 kilowatt hours from $115.05 per month to $126.06 per month – a 9.6 percent increase. The companies first sought the ENEC increase with the PSC on Aug. 25.
The ENEC increase was the result of a Dec. 7 joint stipulation and settlement between the companies, the PSC and the PSC’s Consumer Advocate Division, West Virginia Energy Users Group, the West Virginia Coal Association, Longview Power LLC, and the West Virginia Citizen Action Group, Solar United Neighbors, and Energy Efficient West Virginia.
According to the order, the PSC accepting the joint stipulation agreement from the parties except for a section of the agreement closing a review period of the ENEC.
“The Commission will not approve a closure of this review period without a review of the prudency of the Companies’ fuel costs during this period. Therefore, the review period will remain open,” the order stated.
Expanded Net Energy Costs are defined in state code as historical and projected costs incurred by power companies, such as net energy, purchased power and net wholesale transmission costs.
As part of that joint stipulation, the parties agreed to a review of replacing fuel resources for power plants owned by Monongalia Power and Potomac Edison, as well as the feasibility of purchasing the Pleasants Power Plant near Belmont in Pleasants County.
The PSC gave the companies until March 31 to submit a report to the PSC on the feasibility of purchasing Pleasants Power separate from the ENEC case. Depending on the results of the report, the PSC could order a separate proceeding.
“Acquisition of a power plant is a long-term resource planning issue and long-term resource planning involves multiple considerations that we will not undertake in an ENEC case,” the PSC stated. “After that report is filed, upon petition or the Commission’s own motion we may decide that a separate proceeding is appropriate to address the Companies’ report. If so, we will issue an Order to initiate such a proceeding.”
Energy Harbor, formerly known as First Energy Solutions, announced in March it would close the Pleasants Power Station on Willow Island at some point this year along with the Sammis Power Station in Stratton, Ohio. Pleasants Power has been online since 1979.
The plant was slated to be shut down in 2018 after Allegheny Energy Supply, a subsidiary of FirstEnergy Corp. in Akron, decided to sell the plant to one of FirstEnergy’s other subsidiaries but was rejected by the Federal Energy Regulatory Commission. Deactivation of the plant was moved to 2022.
In 2019, county officials and First Energy Solutions executives proposed seeking a $12.5 million annual break in business and occupation taxes to the state. After special session in July of that same year, Gov. Jim Justice signed the bill in front of one of Pleasants Power’s cooling towers. Company officials at the time said the tax break would keep the plant operating past 2022.
During a Dec. 8 evidentiary hearing in the ENEC case, PSC Consumer Advocate Division Director Robert Williams testified that the purchase by the companies of Pleasants Power warranted further review.
“We just thought that’s an option that should be evaluated, pursued by the Companies,” Williams said. “We’re hoping the Companies will go forward and do that in a timely fashion because we believe that is a limited opportunity … we think the analysis of the Pleasants’ option is a prudent thing for the Company.”
In August, the PSC approved plans by Monongalia Power for wastewater treatment upgrades for its two power plants: Fort Martin Power Station in Maidsville and Harrison Power Station in Haywood. Emmett Pepper, the policy director for Energy Efficient West Virginia, said in a statement Monday that even if one of those two plants were to shut down, there would still be no need to purchase Pleasants Power.
“We do not believe that an additional power plant the size of Pleasants is needed to meet the needs of Mon Power/Potomac Edison customers, whether or not the Fort Martin plant continues operation; there certainly has not been a showing that one is needed in any testimony,” Pepper said.
Pepper and other environmental and consumer protection advocates were taken aback by the support by the PSC Consumer Advocate Division for evaluating the purchase of Pleasants Power. Five years earlier, FirstEnergy attempted to transfer the plant to Monongalia Power/Potomac Edison – a move opposed by the PSC Consumer Advocate Division at the time.
“Five years ago, the Consumer Advocate, large energy users, and several other parties evaluated this power plant and concluded it was a bad deal for ratepayers to take on its operation and ownership,” Pepper said. “Apparently, its current owner feels the same way since they don’t want to operate it any more. So, it makes no sense from a ratepayer perspective to give it special treatment and not consider any other options.”
Pleasants Power is one of two coal-fired merchant power stations in the state — stations that sell their electric on the wholesale market – along with the Longview Power Station in Monongalia County.
According to Energy Harbor, Pleasants Power annually burns more than 3 million tons of coal mined from Ohio and Marshall counties. The station includes two 650-watt generating units and employs more than 160 people, as well as an additional 400 seasonal jobs when the plant shuts down for maintenance.
Pepper said that a full review of the fuel and capacity needs for Monongalia Power/Potomac Edison should be done, considering all options versus only looking at the purchase of Pleasants Power.
“If and when Mon Power/Potomac Edison does show a need for new energy or capacity, we need to harness the power of the free market to find the best option for ratepayers,” Pepper said. “If the PSC only considers one proposal in a vacuum, it will be impossible to know if that one proposal is the best one.
Pepper also pointed to recent statements by Justice promoting West Virginia as a state friendly to all forms of electric-generating options.
“We want West Virginia to be known forever more as that energy state that always figured it out,” Justice said at a December announcement that Massachusetts-based Form Energy would build a manufacturing plant in Weirton to build a new kind of electric battery for use in renewable energy facilities. “We need to embrace all renewables, all the alternatives, while never forgetting our coal miners, our gas workers, and all the goodness we have with our natural resources.”
“We need to have an even playing field where all options can be considered, if we truly want an ‘all-of-the-above’ energy approach in the state, as Gov. Justice has stated he supports,” Pepper said. “Considering one power plant alone is the opposite of ‘all-of-the-above,’ it is more like ‘cherry-picked.'”