Gas project developer CPV Smyth seeks Appalachian Power data

A hearing examiner at the Virginia State Corporation Commission will hold a March 26 hearing on whether Appalachian Power should be forced to turn over what the utility considers to be sensitive data to independent power producer CPV Smyth Generation Co. LLC.

In December 2012, Appalachian Power (APCo), a unit of American Electric Power (NYSE: AEP), applied with the Virginia commission for approval to enter into a series of transactions through which APCo would:

  • acquire a two-thirds ownership interest in Unit 3 of the coal-fired Amos plant in West Virginia from AEP’s Ohio Power subsidiary;
  • acquire an undivided 50% interest in the coal-fired Mitchell plant in West Virginia from Ohio Power; and
  • merge with Wheeling Power, another AEP subsidiary that provides electric service in West Virginia but has no power plants of its own.

APCo would get a total of 1,647 MW of capacity in this deal from Ohio Power, which is being transformed under Ohio law into a company without its own power generating assets.

The bulk of APCo’s ratepayers are in West Virginia and the utility is seeking a similar approval for these transactions from the West Virginia Public Service Commission.

On Feb. 22, CPV Smyth filed a notice of participation in the Virginia case. CPV Smyth is contesting whether these transactions are least-cost for APCo and whether the utility should instead seek outside power sources as alternatives to the Amos and Mitchell capacity.

Said CPV Smyth: “This case will involve the Commonwealth of Virginia’s efforts to ensure that Virginia’s ratepayers receive clean, efficient, and economically viable electricity at the lowest reasonable cost. Because this proceeding will have a direct impact on CPV Smyth in its role as a developer of Virginia-based, natural gas-fired electric generation, and as a future customer and potential supplier to APCo, CPV Smyth has a direct and substantial interest in this proceeding that no other party can adequately represent. CPV Smyth will be directly affected by the outcome of this proceeding, and CPV Smyth’s participation is in the public interest.”

Utility argues that this data too sensitive to turn over to an outside power producer

CPV Smyth also filed a motion to compel APCo to turn over data that the utility thinks it critical and should not be divulged. “APCo questions CPV Smyth’s motivation for participating in this proceeding and argues CPV Smyth is participating to advance its own commercial interests by preventing the transfer of Amos Unit 3 and the Mitchell Plant,” said a March 21 decision from hearing examiner Michael Thomas that set up the March 26 hearing on this issue. “APCo argues CPV Smyth’s true motivation is to have access to APCo’s competitively sensitive information so that it may sign a purchase power agreement with APCo and sell the remaining generation to the market. APCo argues there are three factors leading to the unassailable conclusion that APCo’s right to limit the production of the competitively sensitive information far outweighs CPV Smyth’s need to have access to that information in this case.”

  • First, CPV Smyth is seeking access to APCo’s competitively sensitive information only to advance its commercial self-interest.
  • Second, APCo said it has already provided CPV Smyth with access to all the information it needs to conduct its analysis.
  • Finally, CPV Smyth’s needs do not outweigh the harm to APCo from releasing the competitively sensitive information. APCo argued that it has supplied extensive capital and operating data to CPV Smyth and all other participants that support the current net worth analysis presented in the December 2012 application.

CPV Smyth developing a 700-MW project in Virginia

CPV Smyth said in its Feb. 22 notice to participate in this case that it is developing a state-of-the-art, natural gas-fired facility in Smyth County, Va., with a nominal capacity of 700 MW. The CPV Smyth Facility will be constructed on a portion of a 108-acre site, currently owned by Smyth County Industrial Development Authority (IDA) in Atkins, Va. CPV Smyth has executed a Purcbase Option Agreement for the site with IDA and in December 2012, CPV Smyth received a Special Use Permit for the CPV Smyth Facility. The CPV Smyth Facility site is located near APCo’s 765-kV Broadford/Jackson Ferry Appalachian transmission line.

Virginia commission staff on March 19 filed testimony that didn’t particularly support either side. “The manner in which APCo has withheld information from CPV Smyth is incompatible with the Commission’s Rules, the Protective Ruling, and well-established Commission practice,” staff wrote. “APCo has decided not to provide information designated as confidential to CPV Smyth even though CPV Smyth has signed Agreements to Adhere to the Protective Ruling. APCo asserts that CPV Smyth should not receive certain confidential information that it deems to be commercially sensitive. However, APCo has not sought heightened protection for this information. Although Staff does not take a position on whether the information that APCo has withheld from CPV Smyth should be afforded heightened protection, such protection may only be conferred by a protective ruling. APCo’s decision not to move for such heightened protection – the recourse contemplated by both the Commission’s Rules and the Protective Ruling – has created uncertainty and difficulty for the Staff and parties that should be resolved as expeditiously as possible.”

Amos is a three-unit coal-fired plant located in Winfield, W.Va., with an average annual capacity rating of 2,900 MW. Ohio Power has an undivided two-thirds interest in Unit 3 (867 MW). APCo currently holds the remaining undivided one-third interest in Unit 3 (433 MW) and it owns Units 1 and 2. Mitchell is a two-unit coal-fired station located in Moundsville, W.Va., with an average annual capacity rating of 1,560 MW. Ohio Power currently owns the entire station.

Of the resource portfolios considered to meet APCo’s projected future capacity needs, a study concluded that the best option for APCo and its customers is the transfer to APCo of certain reliable existing coal-fired baseload plants, already retrofitted with environmental controls, located in West Virginia, the utility has told the commissions in both Virginia and West Virginia. These transfers of Amos and Mitchell capacity would add an average of 1,647 MW to APCo’s current average annual capacity of 7,300 MW, for a total average annual capacity of 8,947 MW. The resulting level of generation resources should be adequate to meet APCo’s projected load (including the load of Wheeling Power, and taking into account expected retirements of capacity) and satisfy the reserve margin required by PJM Interconnection.

CPV Smyth is a project affiliate of Maryland-based Competitive Power Ventures, an independent power company with several gas-fired power projects in development in the U.S.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.