September 5, 2017 Read More →

Testimony: FirstEnergy Takeover of West Virginia Plant Would Cost Customers $470 Million

Gazette Mail (Charleston):

A proposed deal for FirstEnergy subsidiaries to acquire a coal-fired power plant would likely cost customers $470 million over the next 15 years, according to testimony from an energy and environmental consultant filed with the state Public Service Commission Friday.

David Schlissel, president of Schlissel Technical Consulting, submitted his prepared testimony on behalf of groups against the acquisition. He said Mon Power and Potomac Edison’s proposed Pleasants Power Station purchase from FirstEnergy should be rejected by the PSC because customers would be saddled with higher utility bills.

According to Schlissel, revenues earned from selling electricity generated by the Pleasants County plant wouldn’t be enough to cover the costs of maintaining it. The $470 million figure Schlissel reached is based on an economic analysis of energy market prices, Pleasants’ generation for the past year and generating capacity price estimates, he said in the filing.

“There is a high risk that the plant will not be profitable and will not produce a net benefit to ratepayers,” Schlissel said. “In fact, if there was not such a high risk, AE Supply and FirstEnergy would not be looking to offload the Pleasants plant to begin with.”

The groups Schlissel provided testimony for, WV SUN and West Virginia Citizen Action Group, have argued the $195 million deal would raise customer utility bills to benefit company shareholders and is similar to Mon Power’s Harrison power plant purchase, which an IEEFA report said cost customers more than $160 million.

If the purchase is approved by both the PSC and the Federal Energy Regulatory Commission, the plant would exit a competitive market and become a part of West Virginia’s regulated market, where it is guaranteed a profit.

More: WV PSC testimony: Pleasants Plant deal could cost ratepayers $470 million

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