MORGANTOWN — The long-term future of the Morgantown Energy Associates plant on Beechurst Avenue remains unclear. But its near future and some of the reasoning behind its planned Jan. 1, 2020, deactivation are spelled out in a Mon Power Public Service Commission filing.
Mon Power made the filing at the end of business on Friday and it wasn’t available Monday when the PSC closed for Columbus Day.
As previously reported, Mon Power has been purchasing electricity from the plant under an Electric Energy Purchase Agreement (EEPA) with MEA since April 1992. The contract was set to continue through April, 17, 2027.
But the contract was a money loser for Mon Power, it explains in its Expanded Net Energy Cost filing with the PSC. The prices dictated by the contract exceed the price of power Mon Power can buy from other sources and are expected to remain above those market rates.
The higher rates cost Mon Power customers about $70 million from 2014-2018, the filing says and will cost another $17.7 million above market rates in 2020.
So Mon Power and MEA owner Starwood Energy Group negotiated a $60 million contract termination agreement, effective Jan. 1. “Terminating the contract now [and paying MEA $60 million] can provide customers with significant savings when compared with allowing the contract to run until its termination in 2027.”
Following termination, MEA will no longer supply electricity generated by its two CFB – circulating fluidized bed – boilers fired by coal and waste coal. MEA may continue using the CFB boilers to supply steam to WVU until it completes installation of equipment to replace them, at which time the CFB boilers will be retired.
In the meantime, MEA will also install an additional auxiliary natural gas boiler to meet its steam supply obligation, which continues through 2027.
A settlement agreement is in the works, with the PSC’s Consumer Advocate Division, the West Virginia Energy Users Group, PSC staff and the companies all involved. Mon Power expects to file it by Friday. Energy Efficient West Virginia and Citizens Action Group are still reviewing it and hope to sign on.
What Starwood might do with the plant beyond sell steam to WVU to heat WVU’s two Morgantown campuses remains unclear. Starwood referred questions to its public relations firm, Abernathy MacGregor, which failed to respond to questions for two days.
As previously reported, MEA is part of Starwood’s Excalibur Power Portfolio, which also consists of two thermal coal plants in New Jersey and one in Arkansas.
Starwood noted when it bought them in early 2018 that three of the plants also supply steam to clients, but they derive a significant majority of their revenue from power-purchase agreements, such as the one Mon Power is terminating.
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