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.