Sierra Club gears up for two coal plant fights in West Virginia

Dozens of FirstEnergy (NYSE: FE) customers traveled from across West Virginia to deliver more than 1,000 letters of protest to Gov. Earl Ray Tomblin following a state Public Service Commission (PSC) hearing on FirstEnergy’s proposal to raise rates in order to purchase a greater ownership stake in the Harrison coal plant.

The Sierra Club said May 29 that customers at both the hearing and the governor’s office wore stickers, held signs, and chanted in support of energy efficiency as a better solution that could lower bills and create jobs in the state. FirstEnergy’s regulated subsidiaries in the state are Monongahela Power and Potomac Edison.

“The transfer of the Harrison power plant is simply unfair for West Virginia’s families and businesses,” said Jim Kotcon, Conservation Chair for the Sierra Club West Virginia Chapter and a Monongahela Power customer. “FirstEnergy is failing to create thousands of jobs in energy efficiency while they propose to gouge ratepayers with this power plant deal. Their expensive plan wouldn’t create a single new job or generate any extra electricity. All FirstEnergy is doing is charging West Virginia ratepayers $1 billion to pad their own profits.”

A range of groups have expressed opposition and concern about the impacts of the transfer and associated rate increases on families, including: the Jefferson County NAACP, the Town of Lewisburg, the City of Morgantown the Executive Director of the West Virginia Council of Churches, the Coalition on Legislation for the Elderly, the League of Women Voters, Energy Efficient West Virginia and the Sierra Club.

The majority of the Harrison plant is owned by a deregulated FirstEnergy subsidiary in Ohio. Transferring full ownership to West Virginia customers of Monongahela Power would mean they can pass the costs to West Virginia’s families who will then be stuck footing the bill – even though cheaper options that would create jobs are available, the club said.

Meanwhile, the club said that Appalachian Power customers will be gearing up for a similar fight as parent American Electric Power (NYSE: AEP) seeks to push a nearly nearly identical proposal through the West Virginia PSC. AEP hopes to transfer the costs of ownership of two coal-fired power plants to its APCo and Wheeling Power customers, but has failed to investigate cheaper options like energy efficiency, the club said. The AEP hearing before the PSC is set for July 16.

FirstEnergy, AEP want to swap around coal plant shares

Mon Power currently owns a 20.54% interest in Harrison, a 1,984-MW pulverized coal facility located in Haywood, W.Va., along the West Fork River. It also owns a 7.69% interest in Pleasants, a 1,300-MW pulverized coal facility located in Willow Island, W.Va., along the Ohio River. Under the proposed deal up for consideration at the West Virginia PSC, Mon Power will purchase Allegheny Energy Supply’s (AE Supply) 79.46% ownership interest in Harrison and become the sole owner of the plant. Also, Mon Power will sell its 7.69% interest in Pleasants to AE Supply and AE Supply will become the sole owner of the Pleasants plant.

The companies have told the PSC that the Harrison acquisition is the most cost-effective way for Mon Power to prudently and reliably serve its growing West Virginia load and meet its full requirements service obligation to sister utility Potomac Edison.

The FirstEnergy companies also said this deal will result in a 1,189 MW net increase in unforced capacity for Mon Power, which will offset the
 408 MW decrease it experienced in September 2012 as the result of the deactivation of three older subcritical coal plants (Willow Island, Albright and Rivesville) in northern West Virginia.

Under the AEP proposal now before the West Virginia commission, transferred to APCo would be a two-thirds interest in Unit 3 at the Amos coal plant in southern West Virginia and one-half of the Mitchell coal plant in northern West Virginia, comprising 1,647 MW of average annual generating capacity presently owned by Ohio Power (OPCo), another AEP subsidiary.

Amos is a three-unit coal-fired plant located in Winfield, W.Va., with an average annual capacity rating of 2,900 MW. OPCo 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. OPCo currently owns the entire station.

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.