A Little Bit of News on Power Plant Sales
Charleston Gazette
1 May 2013
By Ken Ward Jr.
There’s been a little bit of news over the last few days in the
two big cases involving major power companies trying to transfer
ownership of several of their coal-fired power plants to West
Virginia subsidiaries — an issue that promises to only heat up as
hearings scheduled for May and July before the state Public
Service Commission approach.
First, the State Journal reported today:
In its petitions for West Virginia and Virginia approval to
transfer parts of the Amos and Mitchell coal-fired power stations
from Ohio subsidiaries to Appalachian Power, AEP announced May 1
that federal regulators have no objection.
While AEP did issue a statement announcing the Federal Energy
Regulatory Commission’s decision, the State Journal put an
unfortunate headline on its story saying “Feds clear way for
transfer of Amos and Mitchell to ApCO.” I’m not sure there’s
really all that much to this FERC decision. The real ball game is
before the state Public Service Commission.
And in the other power plant sale case, involving FirstEnergy’s
Harrison Power Station, a huge collection of testimony from PSC
staff, the consumer advocate and various intervening parties hit
the commission on Friday. You can read it all yourself by visiting
the PSC’s website and searching for Case 12-1571-E-PC.
Also over at the State Journal, Pam Kasey wrote up one story that
focused on the filing from PSC consumer advocate Byron Harris. Pam
reports:
Cynical observers have suggested this proposal, and a similar
proposal from Appalachian Power, are motivated for the two
Ohio-based utility companies by a desire to move coal-fired power
assets out of their Ohio utilities’ portfolios, where deregulation
now forces them to compete, to West Virginia’s regulated market
where the commission will guarantee the companies a return from
ratepayers for the coming several decades.
“The transaction represents an effort to bail out the companies’
unregulated affiliates,” said PSC Consumer Advocate Byron Harris
flatly in his testimony.
An alternative plan with energy efficiency and demand response,
plus purchases from the market as needed, would cost $510 million
less through 2034 than the proposal, in Schlissel’s analysis.
“Obtaining needed capacity and energy from the Harrison plant
through the proposed (generation resource transaction) is the most
expensive option,” he said.
And on his Power Line blog, Bill Howley has several posts (see
here and here), including one that that argues, WV Coal Not an
Issue in Harrison Case, FE Could Care Less About WV:
Mon Power could care less what coal the company uses, as long as
it is cheapest and meets the company’s needs, not those of WV …
So, if the WV PSC approves the FE Harrison plant scheme, the
Harrison plant will not operate any differently from the way it
operates now, when 80% of the plant sells power on the open market
using FE’s non-utility generating company.