MORGANTOWN – The state Public Service Commission is mulling a rate-hike request from Mon Power and Potomac Edison – FirstEnergy sister companies serving most of northern West Virginia along with the Eastern Panhandle and western Maryland.
The companies project the rate hike would raise the average residential customer bill about $11.05 per month, from $115.05 to $126.10 – a 9.6% increase.
The proposal has drawn opposition from various consumer and energy advocacy groups, and from Longview Power, which operates a coal-fired power plant outside Morgantown and alleges a failed business proposal with the companies could have saved the ratepayers money.
The companies filed the request in August; new testimony in the case is due to arrive by the end of the business day Tuesday, Nov. 29; an evidentiary hearing is set for Dec. 8; and any approved changes would take effect Jan. 1.
The case is called an ENEC – Expended Net Energy Cost – case to recover fuel, purchased power and transmission costs, and PJM regional energy grid participation costs (summarized as purchased power expenses) incurred to provide service to customers.
Mon Power said in an email exchange, “The proposed rate increase, part of Mon Power and Potomac Edison’s annual fuel case filing, is a necessary step to address increased energy costs facing the entire industry. The proposed increase primarily reflects higher costs for purchased power, reagents and the coal that fuels the companies’ two West Virginia power plants.
“We work hard to keep energy costs manageable for our customers,” Mon Power said, “and even with the increase, our West Virginia rates would remain lower than the national average and lower than those in most states adjacent to West Virginia.”
The total requested ENEC rate hike is $183.8 million and reflects a total 12.2% hike for all customers, including commercial/industrial. This comes on top of a $94 million interim ENEC hike granted in may.
The companies point out the comparitively low rates in their filing, saying that even after the hike, rates for all customers will be 10.5 cents per kilowatt hour (kWH), compared to the national average 12.09 cents per kWh and lower than all West Virginia border states. The new residential rate would be 12.61 cents per kWh compared to 14.92 cents per kWh nationally.
Longview Power is one of the intervenors in the case and opposes the case and opposes the proposal. In its petition to intervene, Longview noted that it purchases large quantities of power from Mon Power and could see a significant impact.
Longview CEO Stephen Nelson testified to the PSC that about $145 million of the $183.8 million the companies are seeking stems from high purchased-power costs associated with poor performance of their coal-fired plants, particularly Fort Martin (Longview’s neighbor), and a failed effort to negotiate a PPA – power purchase agreement – with Longview to buy Longview’s power at a lower cost and sell for profit into the PJM grid.
Nelson said Fort Martin’s production during the review period of January-June 2022 was lower than in the pandemic year of 2020, even though PJM prices were higher in 2022. Longview has half the generation capacity but produces more power.
Nelson cited three reasons for Mon Power’s poor plant performance, focusing chiefly on one: failure to maintain adequate coal inventories. Longview faced similar supply delivery challenges but maintained adequate supply, he said. Mon Power’s failure drove up its costs.
Nelson recommended that the PSC not allow the companies to recover somewhere form $59 million to $89 million tied to poor plant performance. The PSC expects utilities to operate the plants efficiently, which costs money, and there comes a time when an old plant isn’t worth the cost to keep it open.
But in this case, he said, Mon Power could have avoided the problem at Fort Martin by negotiating a PPA with Longview. That could have saved ratepayers $106 million in 2022 and another $52 million in 2023.
The PSC’s Consumer Advocate Division also intervened in the case and made several recommendations. One was that Mon Power buy the coal-fired Pleasants Power Station, which FirstEnergy once owned but sold – a reversal of its previous postion.
Current owner Harbor Energy wants to sell Pleasants and plans to close it in June 2023 because it’s uneconomical.
Speaking for the CAD, Emily Medine said Pleasants has Selective Catalytic Reduction (emission control) equipment that Fort Martin lacks, and Fort Martin could be closed after Mon Power buys Pleasants. Mon Power and Potomac Energy tried to buy Pleasants in 2017-18 but failed.
Medine was also among those who cited the companies’ coal supply problems as a factor in their high produced-power costs and recommended they develop a plan to restore inventory levels.
Energy Efficienct WV also intervened in the case, and opposes the rate hike, but also objects to Longview’s and the CAD’s recommendations.
EEWV Policy Director Emmett Pepper said in a release, “What is shocking, though, is the Consumer Advocate Division – an office with a statutory requirement to protect ratepayers’ interests – would so blatantly reverse previous testimony to prop up the same sort of out-of-state big businesses by asking for this corporate bailout.
“A modern electric grid,” he said, “uses a mix of powersources, including using the free market and customer-owned resources, to meet electric needs. The government should not be forcing us to pay to keep these expensive power plants online when the plants can’t otherwise compete.”
He concluded, “Excuse after excuse is given as to why the rates keep going up, but we know that in places that use the free market and it’s easier for people to help address their own power needs, the rates don’t go up so quickly.”
Mon Power said in the email exchange, “We understand rising energy costs may cause concerns for our customers. To help customers manage their bills, Mon Power and Potomac Edison offer budget plans, special payment plans and access to energy assistance programs.” To apply or learn more, customers may visit firstenergycorp.com/billassist or contact customer service at 800-686-0022 (Mon Power) or 800-686-0011 (Potomac Edison).
Tweet David Beard @dbeardtdp Email dbeard@dominionpost.com
