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Report critical of proposed sale of Harrison power station

August 02, 2013


CLARKSBURG — A report from The Institute for Energy Economics and Financial Analysis contends that proposals by FirstEnergy  and American Electric Power to sell coal-fired plants to their West Virginia subsidiaries would increase both costs and risks for consumers in the state.

The energy and environmental think tank reviewed two current cases in West Virginia and concluded that the utilities recognized the financial risks of coal-fired power generation and are trying to avoid those risks by transferring them to regulated jurisdictions, such as West Virginia.

In the report, authors argue that neither company issued a request for proposals or evaluated the impact of expanding energy efficiency programs.

‘What we’re saying is that the companies’ analysis supporting the transfer of the plant to MonPower is flawed and biased,’ co-author David Schlissel said. ‘We believe there are less expensive options out there.’ A request for proposals could have resulted in a fairer price for the plant, and as a result cheaper costs for MonPower customers, Schlissel said. FirstEnergy’s economic analysis shows that the plant would lose $725 million over the first 10 years, before starting to make a profit in 2023. ‘It’s not a good deal for ratepayers,’ Schlissel said.

In denying part of Appalachian Power’s request, the Virginia State Corporation Commission also addressed diversity in power generation.

‘I think it’s a great decision coming out of Virginia today,’ Kunkel said. ‘The Virginia commission specifically noted concerns about the lack of fuel diversity.’ Approving both acquisitions would have raised the percentage of coal-fired electricity produced by Appalachian Power’s generation fleet to a projected 87 percent by 2017, according to a Virginia State Corporation Commission news release.

by Erin Beck, The Exponent Telegram

full article

IEEFA report

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