MORGANTOWN — Mon Power and Potomac Edison customers will see a rate hike come January, but only half of what the companies requested from the state Public Service Commission.
The companies had asked for a hike that would have raised the average residential customer bill about $11.05 per month, from $115.05 to $126.10 — a 9.6% increase.
Through a settlement worked out between the companies and several industrial and consumer groups that intervened in the case, the increase for an average residential customer using 1,000 kWh (kilowatt hours) per month would be $5.53, raising the bill from $115.05 to $120.58 per month.
The new rates will go into effect on Jan. 1 and will be reflected on that month’s bill, a spokeswoman for FirstEnergy, the companies’ parent company, said. “We work hard to keep energy costs manageable for our customers, and even with the increase, our West Virginia rates would remain lower than the national average and lower than those in states adjacent to West Virginia.”
The settlement is not yet official, awaiting a final order from the PSC. A PSC spokeswoman said there is no statutory deadline for the order and she couldn’t provide a date for its issue.
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 and Potomac Edison are FirstEnergy sister companies serving most of northern West Virginia along with the Eastern Panhandle and western Maryland.
The companies requested a total rate hike of $183.8 million, reflecting a total 12.2% hike for all customers, including commercial/industrial.
In the settlement, the parties agreed to a hike of $91.9 million, with the remaining $91.9 million deferred and carried over to the companies’ 2023 ENEC proceeding.
The agreement is spelled out in a joint stipulation entered by the companies, PSC staff and its Consumer Advocate Division, the West Virginia Energy Users Group (various industrial customers), the West Virginia Coal Association, Longview Power, the West Virginia Citizen Action Group, Solar United Neighbors and Energy Efficient West Virginia.
Several of the parties that objected to the original proposed rate hike asserted that insufficient supplies at their Fort Martin and Harrison coal-fired power plants led to lower-than-expected revenues at those coal-fired plants.
So the settlement includes two stipulations on that topic: One, they must review and evaluate their coal inventory targets at the two plants during the six-month period following the PSC’s final order, “to better minimize the impact of supply disruptions and price volatility.”
And two, their 2023 ENEC filing will include a plan to address coal inventories at Fort Martin that includes a plan to restore inventories to target levels, a reassessment of those target levels, and an evaluation of available coal supply and transportation.
The agreement also requires the companies to ask for corporate guarantees on new coal contracts.
Emmett Pepper, with Energy Efficient West Virginia, said this was discussed during the Dec. 8 evidentiary hearing and the the idea was to try to ensure that there would be less of a likelihood that a coal company breaches its contract with Mon Power due to finding someone who would pay more for their coal, something that apparently has been happening lately to coal-fired generators.
As part of the case, the PSC’s Consumer Advocate Division had recommended that Mon Power buy the coal-fired Pleasants Power Station, which FirstEnergy once owned but sold — a reversal of CAD’s previous position.
Current owner Harbor Energy wants to sell Pleasants and plans to close it in June 2023 because it’s uneconomical.
CAD had 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.
The settlement agreement includes a stipulation that the companies will consider the CAD recommendation on buying Pleasants as part of its continued evaluation of generation resources to service its customers. The various parties must submit their positions on that recommendation to the PSC.
Pepper said, “It was the only issue that came up in the ENEC that was not addressed by the settlement. The parties could not come to an agreement on how to resolve it. As we stated in our testimony, we believe that any decision to meet new energy or capacity needs should be done through a transparent, fair, and clear Request for Proposal process. We should have what is best for ratepayers as the polar star for what guides decision-making in purchasing new power infrastructure. We should not act rashly or give advantages to any potential source or sources of power.”
Pepper said that if the PSC wishes to address the Pleasants issue, it will be done in its order within the next week or two. “We are opposed to giving special treatment to a certain power plant without evaluating all other options. We also do not believe that Mon Power customers need as much power and capacity as Pleasants produces and we think it is likely going to still be too expensive, as it was in 2017 when we last evaluated whether ratepayers should pay for Pleasants.”
The companies’ 2023 ENEC case will also propose a 4% “carrying cost charge” for the $91.9 million deferred to next year. Mon Power said this is interest on the uncollected balance. The PSC added that the deferred balance is the difference between payments for energy costs incurred by the company and payments received by the company from customers.
TWEET David Beard @dbeardtdp
EMAIL dbeard@dominionpost.com
