MORGANTOWN — Morgantown Energy Associates voiced support for the plan to deactivate its coal-fired power generators in a recent filing with the Public Service Commission.
In a separate filing in the same case, Mon Power spelled out some potential benefits of the plan.
As previously reported, under the plan, the waste coal-fired MEA plant would cease producing electricity for Mon Power on Jan. 1, 2020, but would continue providing steam to WVU’s two Morgantown campuses. Mon Power proposes to buy out the power-purchase contract with MEA for $60 million.
The plan is subject to PSC approval.
MEA Managing Director Jeffrey Delgado said in a letter to the PSC, “MEA believes the Termination Agreement represents a ‘win-win’ for all parties concerned, including Mon Power’s West Virginia customers, who will benefit from lower rates for their electricity.”
Mon Power has been purchasing electricity – about 50 megawatts – from the plant under the EEPA since April 1992. The contract was set to continue through April, 27, 2027. But the contract was a money loser for Mon Power, the company has said.
Delgado said in his letter that MEA will stop using waste coal to generate electricity but will keep producing steam for WVU primarily through boilers fired by natural gas, “which itself is an important West Virginia natural resource.”
Delgado said the switch from gob coal to gas will reduce truck traffic by 20 to 30 trucks per day, which will in turn reduce congestion, truck emissions and road wear.
Delgado said MEA views the termination agreement as a “win-win for all parties concerned.” It’s also “in the public interest and will provide numerous economic and other benefits for Mon Power’s customers and the citizens of West Virginia.”
The other filing presents testimony by FirstEnergy Regulated Commodity Sourcing Manager Robert Reeping, who works with Mon Power and its sister, Potomac Edison. He provided addition details on issues previously reported and on issues MEA touched on in its letter.
Reeping told the PSC that MEA has no plans to sell electricity at all after Jan. 1.
The negotiations with MEA, he said, began at the suggestion of PSC’s Consumer Advocate Division, which saw the termination agreement as a way to save consumers money.
Under the power-purchase agreement, he reminded PSC, Mon Power is buying electricity form MEA above market rates. From 2014-2018, this cost customers $70 million and would cost another $17.7 million above market rates in 2020. Losses through the end of the contract would run $80 million to $100 million, well above the $60 million buyout amount.
He refers to MEA’s steam supply contract as the WVU Project and said, “While there will be operational changes at the facility, it will continue as an important part of the Morgantown and university community.” He echoes MEA’s points that it will use more West Virginia natural gas while reducing truck traffic and emissions.
“Since the plant sits low in a valley adjacent to downtown Morgantown and the university,” he said, “the switch to natural gas will result in a major source of air emissions in the city of Morgantown being reduced.”
When MEA owner Starwood Energy Group informed PJM Interconnect — the regional transmission organization that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia – of the planned deactivation, PJM conducted a reliability analysis to ensure Mon Power would be able to replace the capacity lost by the deactivation.
PJM told Mon Power in a letter at the end of October that the deactivation poses no grid problems and gave it the green light to move ahead.
Mon Power has asked the PSC to issue a decision on the proposal by Dec. 20. Reeping explained the reasons for the deadline to PSC.
He said that if PSC delays the decision past that date, Mon Power will have to tell PJM that the plant isn’t going off the grid; MEA would have to arrange to keep its two waste coal boilers operating; and Mon Power and MEA would have to renegotiate a new agreement that would be once again subject to PSC approval. The delay would cost Mon Power customers more money.
WVU’s contract to receive MEA’s steam lasts through 2027. Starwood has declined to comment on what will happen after that.
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