September 9, 2016 Read More →

Study Shows MonPower Takeover of Harrison Plant Cost Customers Millions

Andrew Brown for the Charleston (W.V.) Gazette Mail:

The study, which was conducted by Cathy Kunkel, a Charleston resident and analyst for IEEFA, suggests the cost of the Harrison plant is enough evidence for why the PSC should look carefully at FirstEnergy’s plans to sell the Pleasants plant.

“The poor financial performance of Harrison to date raises serious doubts about whether the Harrison acquisition provides a good ‘model’ for West Virginia to follow in evaluating FirstEnergy’s plan to have MonPower purchase the Pleasants power plant,” Kunkel said.

During the 2013 regulatory case, Kunkel was a witness for the West Virginia Citizen Action Group, which opposed the transfer of the Harrison plant.

While the 1,984-megawatt Harrison plant was supposed to sell enough power to offset costs for West Virginians, Kunkel’s analysis found the plant created a net cost for customers for 28 of the 33 months that MonPower has owned it.

That analysis compares the cost of Harrison to what MonPower and Potomac Edison customers would have paid if they would have relied on the regional market to fulfill their electricity supply needs.

It also showed that the plant wasn’t generating enough revenue from the regional energy market earlier this year to cover all of the fuel costs at the plant, let alone the operating and maintenance costs or planned upgrades.

“The bet has not panned out,” Kunkel wrote.

FirstEnergy, Meyers said, did not have a chance to review the IEEFA study, but said the company still believes the plant is a good deal for customers in West Virginia.

Study shows MonPower takeover of Harrison plant cost customers millions

From SNL:

FirstEnergy Corp. shareholders stand to benefit from the company’s efforts to pursue re-regulation in West Virginia, though at the cost of ratepayers, the Institute for Energy Economics and Financial Analysis warns. FirstEnergy is seeking the West Virginia Public Service Commission approval to sell all or a portion of its Pleasants power station — held by its deregulated subsidiary Allegheny Energy Supply Co. — to Monongahela Power Co., a regulated utility, in a transaction that is similar to the one involving the Harrison facility and which has cost ratepayers more than $160 million.

SNL Daily Dose

Posted in: IEEFA In the News

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