“So when the company makes money the profit all goes to the stockholders and management, but when they lose money (by not investing in new tech) they want bailout cash from ‘the little people?’ I don’t think so.”
The anonymous comment above, submitted to the Public Service Commission in regard to Mon Power purchasing the Pleasants Power Station, sums it up nicely.
The story begins all the way back in August 2022, when Mon Power and sister company Potomac Edison (both subsidiaries of FirstEnergy) approached the Public Service Commission for an almost $184 million rate hike to recoup, in Mon Power’s words, “increased energy costs.”
In November, as the PSC considered the rate hike request, competitor Longview pointed out that Mon Power’s higher-than-expected expenses resulted in part because it failed to keep enough coal on-hand at the Fort Martin power plant. This assertion was echoed by the PSC’s Consumer Advocate Division — which then told Mon Power it should purchase the Pleasants power plant and close the Fort Martin plant, a reversal of its position four years prior, when it blocked Mon Power’s attempt to buy Pleasants.
Mon Power agreed to look into purchasing Pleasants and in December, the PSC announced it would approve half of Mon Power’s requested rate increase — its third in less than a year. In the meantime, lawmakers passed resolutions urging Mon Power to purchase the Pleasants plant.
This month, Mon Power came back and said it would need to charge ratepayers an additional $36 million to keep Pleasants idling (but not producing power) for a year while the power company decides if it wants to buy the plant. The current owners of Pleasants, Texas-based Energy Transition & Environmental Management (ETEM), had already slated the plant to be demolished June 1, because Pleasants wasn’t profitable enough to keep running. Now, ETEM is not only asking Mon Power to pay to keep the plant open while the companies negotiate, but to also cover so many other expenses that CAD walked back its initial endorsement for the purchase.
Here’s the other facet to this story: With privately owned power plants, the owner and shareholders take the hit if the plant isn’t profitable — or profitable enough. With regulated utilities, if a power plant isn’t profitable enough, the owner passes the costs off to ratepayers while the owner and shareholders maintain their profits. (If that sounds backwards to you, don’t worry — it sounds backwards to us, too.)
On Monday, the PSC granted ratepayers a temporary reprieve: It put a hold on the surcharge (which would be the fourth rate hike in 18 months) unless and until Mon Power and ETEM reach some kind of formal agreement in the form of a Letter of Intent.
The whole scheme is foolish and unnecessary. Worse, every possible outcome means someone loses. Ratepayers lose if the PSC approves the agreement and surcharge. Ratepayers lose again if Mon Power buys the underperforming Pleasants plant — and likely so will the 180 people who work at Fort Martin. But if Mon Power doesn’t buy Pleasants, its 150 workers, their families and the whole of Pleasants County lose.
The only winners are Mon Power’s shareholders. No matter what, they will continue to line their pockets at the expense of everyone else. And there is something fundamentally wrong with that.
